Reform of the welfare state

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Reform of the welfare state

• POLI 352A

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Hard times for the welfare state

• Since the 1970s, several pressures on welfare
  states
• Economic
• Demographic
• Maturation
• Ideological

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Varieties of welfare states

• Social democratic
• Citizens welfare state
• Conservative
• Insurance welfare state
• Liberal
• Safety-net welfare state

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To each welfare state, its own woes

• Social democratic Fiscal
• High budget deficits
• High taxation
• Conservative Employment
• High non-wage labour costs
• Low public-sector employment
• Barriers to female employment
• Liberal Ideology and poverty
• Strongest neo-liberal movements
• Highest levels of inequality

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Reform outcomes

• Remarkably modest cutbacks
• Exceptions U.K. and N.Z.
• Spending levels continue to rise

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Reform outcomes

• Common strategies of reform
• Reducing benefit rates
• Tightening eligibility requirements
• Increasing contribution rates

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Reform outcomes

• Common strategies of reform
• Market mechanisms
• Enhancements for working poor
• Expansion of some services

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Explanation?Economy

• High correlation between unemployment and
  cutbacks.

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Explanation?Institutions

• A paradox
• Logic of power
• Few veto points makes it possible to impose
  losses
• BUT
• Logic of blame-avoidance
• Few veto veto makes it riskier to do so.

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Explanation?Organization of Interests

• Complex effects
• Neo-corporatism as venue for consensual bargains
• BUT
• Neo-corporatism as veto point for labor

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Explanation?Public opinion

• Key fact
• Reform of the welfare state is almost never
  popular.
• Widespread strategies of blame avoidance
• Delay
• Low-visibility
• Passing the buck

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Policy feedback

• Powerful feedback effects
• Past choices shape current welfare-state woes
• Legacy of entitlement / obligation
• Policy structure shapes blame-avoidance
  opportunities

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Conclusion

• Welfare states are under pressure
• BUT
• Welfare state reform has usually been modest at
  least in the short term
• The imperative of blame-avoidance dominates
  politicians choices
• Current options sharply constrained by past
  choices