Analysing Welfare State Emergence, Development, And Retrenchment (?) : Is A Power/resources Approach Sufficient In Determining Why Some Welfare States Are More Generous Than Others?

This essay seeks to address differences in welfare provision in advanced industrial countries, to determine the factors that affect welfare state generosity. The essay gives primacy to attitudinal factors affecting welfare distribution, political parties, institutional arrangements, social stratification and organs of collective action within a state. The differences in welfare arrangements are explained herein with reference to ideas regarding the core principles and values around which welfare states were originally formed, and how they impact on the path-dependency of policy options that will be considered by elites, and accepted by the wider citizenry of a state. It will be shown through case studies and the analysis of various approaches that government responses to exogenous economic factors associated with globalisation are best explained through recourse to analysis of their partisan politics, the relative strength of labour movements and left/right opposition, and the social mores regarding welfare within a country.

Research into welfare state generosity has been dominated by two schools of thought. The new-politics of the welfare state approach regards post-industrial changes, such as the role of a growing service sector decreasing economic growth rates, population aging and the maturation of government welfare commitments, as increasing social expenditures (Korpi, 2003: p.590) constrict budgets and government agency. It also rejects the centrality of left parties and labour organisation in the retrenchment phase (Pierson, 1996: p.151), conceiving the major actors within welfare states as the new interest groups that they create, such as pensioners and healthcare consumers, significant in opposing cuts (Korpi, 2003: p.591). The approach typically employs a linear scoring approach that looks at total welfare state spending as a percentage of GDP (Esping-Andersen, 1990: p.19), and as such tends to find little evidence of retrenchment occurring within welfare states (Pierson, 1996: p.150).

This perspective has been challenged by advocates of the power-resources (Korpi and Palme, 2003: p.425) or rights based (Scruggs, 2006: p.350) approach. Adherents of a power resources approach charge that the new-politics approach misses fundamental dynamics affecting individual entitlements and distribution of benefits and their translation into disposable income for recipients, such as the extent to which benefits are taxed (Allan & Scruggs, 2004: pp.498-499). The content, quality and coverage of benefits is important to a power-resources approach to welfare generosity (Esping-Andersen, 1990: p.20). The gross replacement rates used by Pierson as a gauge of welfare generosity, obscure the coverage of benefit provision for instance, the Thatcher government in the 1980s cut welfare entitlements to many within Britain, yet on aggregate there was an increase in social security expenditure (Allan & Scruggs, 2004: p.498). Theorists working within the power-resources approach have found significant evidence of welfare state regress within welfare states, particularly in the form of a return to levels of mass unemployment (Korpi, 2003: p.594).

The power-resources approach has led to a conceptualisation of welfare state typologies that look at the generosity of welfare states, most famously the threefold typology of Esping-Andersen (1990) focusing on de-commodification - the extent to which social rights allow a person to live independently of the market (Powell & Barrientos, 2004: p.84). The Liberal model consists predominantly of means-tested assistance, modest universal transfers and modest benefits targeted at low-income dependents (Esping-Andersen, 1990: p.26), focusing on market and employee provision of welfare alternatives that emphasises the role of the state only in making up for market failures (Powell & Barrientos, 2004: p.86). It is further characterised by de-regulation (Esping-Andersen, 1996: p.10), low de-commodification and strong individualism (Arts & Geliessen, 2002: p.141). The Conservative regime type is characterised by the minimal redistributive nature of social security which preserves traditional familial structures, with a minor role for private and occupational fringe benefits (Esping-Andersen, 1990: p.27), and a lack of emphasis on social services arrangements enabling women to access the market (Esping-Andersen, 1996: p.18). The Conservative regimes heavily subsidises early retirement and unemployment payments (Esping-Andersen, 1996: p.18), preserving the existence of a small, heavily represented, largely male workforce (Korpi & Palme, 2003: p.432). Finally, the social democratic model is characterised by a commitment to full employment and a universalism in benefit provision that confers equality of the highest standards, not of minimal needs (Esping-Andersen, 1990: pp.27-28), and emphasis on training, workfare and gender equalisation, following active labour market policies alongside social provisions such as childcare and generous parental leave and payment to ensure female market participation (Esping-Andersen, 1996: pp.11-13). Typically these states are characterised by high levels of de-commodification and a strong sense of universalism (Arts and Geliessen, 2002: p.141).

Esping-Andersen s research has been challenged, with some wanting to include more models of welfare regimes (Arts & Geliessen, 2002), though others have supported the existence of a three-fold system through empirical analysis (Powell & Barrientos, 2004: p.92). Real-world examples often exhibit hybridity, but typologies such as these allow researchers to illuminate deviations from the typology and the details of welfare regimes through comparison to an ideal-type (Arts & Geliessen, 2002: p.140). This essay will now analyse the role of class mobilisation, partisan politics, institutional arrangements and social values in the emergence of, and changes to, welfare states.

Esping-Andersen highlights the importance of looking at how worker mobilisation, political coalitions and un ion structures determined the nature of welfare regimes (1990: p.30). For example the Norwegian red-green rural farmer alliances incorporated the needs of working farmers and the expectations of middle class taste, into regime compositions, whereas in Continental Europe, middle class hostility to rural interests led to the institutionalisation of middle class interest and the preservation of occupationally segregated social-insurance programs (1990: p.32). The inability of Anglo-Saxon countries to woo the middle classes from the market to state can be seen to have led to the institutionalisation of a dualism between private and state provided welfare (1990: p.31). Alongside the differing strength of unions and working class mobilisation, Esping-Andersen emphasises the strength right-wing opposition in welfare state composition: Scandinavian countries had lower levels of unified right-wing opposition which can be seen as central to the emergence of a more socialist model of regime (1990: p.107), whereas the interests of the right greatly shaped the construction of both liberal and corporatist regimes that sought to weaken the collective power of workers and unions through amelioration (1990: p.110). Left governments have been found to be associated with larger statistically significant increases in unemployment replacement rates pre-1980s but not since 1980, whereas up to 1980 the right were associated with changes in replacement rates that cannot be differentiated from zero , and with larger cuts to unemployment rates since the 1980s (Allen & Scruggs, 2004: pp.504-507). In their findings, right parties are associated with retrenchment, and the left with expansion (2004: p.504) in most cases unemployment and loss of industrial jobs have met with higher redistributive spending the more left wing a government was (Cusack et al in Gatti & Glynn, 2006: p.302).

The discourse of globalisation s effects cannot be seen as an independent factor limiting all government s ability to maintain conditions of welfare both Allan & Scruggs and Korpi & Palme have failed to find statistically significant data regarding the impact of financial openness and trade on welfare regimes (2004: p.507 & 2003: p.436). Some parties have used the perceived pressure for a flexible labour market and open economies, and the mobility of capital (Hay, 2006: p.5) to justify cuts or restructuring, whereas the discourse of globalisation has been used as justification for maintaining existing welfare arrangements to limit these threats in Scandinavian regimes (Allan & Scruggs, 2004: pp.501-502). Hay s research on globalisation finds little evidence to support the belief that tight labour markets, high levels of welfare spending and corporate tax lead to capital flight (2006: p.5). The way in which the belief in the effects of globalisation conditions how policy makers view their political context and make decisions accordingly (2006: p.5) is centrally important. In the E.U, regional integration rather than global market openness (2006: pp.13-14) is arguably more culpable than globalisation the institutionalised logic of neoliberalism and deflationary bias of the Stability and Growth Pact within the EU and EMU (Hay 2006: pp.19-20) conditions policy makers approaches to the welfare state. In support of this conception of the role of partisan politics and globalisation discourses, Hay identifies the startling lack of convergence on a regime type among different countries that would not be the case if globalisation resulted in strict universal limitations (2006: pp.6-7, p.19). The belief that welfare states disincentivise work and developing skills, leading to productivity, has also been found to have little empirical support (Esping-Andersen, 1996: p.15).

The final part of this essay looks at the effects of institutionalised social values and attitudes to welfare on social security policies. Within the rights-based approach, welfare arrangements are differentiated by their objectives which condition the individual expectations regarding appropriate levels of social spending among members of the society (Scruggs, 2006: p.351). The institutional arrangements of a particular state can create varying levels of stratification and condition attitudes towards welfare recipients by emphasizing social cleavages (Korpi, 2003: p.598 and Korpi & Palme, 2003: p.431) the targeted nature of benefit provision in liberal regimes such as Australia and the U.S is seen to promote the stigmatisation of recipients, leading to a lack of support for their funding among the populace (Cox, 2004: p.212). The institutionalisation of principles of self-reliance and market efficiency within liberal regimes impacts heavily on expectations regarding welfare provisions, and the extent to which policies such as expanding the welfare state or increasing its generosity will be accepted, contrasting heavily with the institutionalised values of universalism and state-provided welfare within social democratic regimes (Arts & Geliessen, 2002: pp.141-142).

The institutionalisation of fundamental values within a welfare state leads to the idea of a welfare culture , an arrangement of values and ideals that govern and order the welfare state and associated policies (Pfau-Effinger, 2005: p.4). A welfare-culture approach does not limit the interests and values to particular groups that benefit from social security, but to the wider values attached to welfare provision (Pfau-Effinger, 2005: pp.11-12). Attitudes regarding the individual s role in income distribution as a reflection of an individual s effort, not luck, have been found within the U.S to be strongly linked to negative attitudes regarding redistributive social policy (Alesina et al in Gatti & Glynn, 2006: p.309), which contrasts to attitudinal studies in Europe that found favourable attitudes towards maintaining and even expanding the welfare state (Boeri et al in Gatti & Glynn, 2006: p.310). The values that institutional arrangements proscribe place limitations on the way in which citizens are likely to mobilize and form coalitions based upon the attitudes promoted by certain arrangements, and as such have repercussions for the resources available to certain groups in representing their interests (Korpi, 2003: p.598).

Social attitudes also place limitations on the policies that can be pursued by governments unless they can be framed in such a way as to appear to support prevalent values. The existing institutional arrangements and the stratification they create shape class coalitions which tend to reproduce the original matrix and welfare outcomes (Arts & Geliessen, 2002: p.140), what Cox terms the path dependency of an idea (2004: p.206). Transformation can occur within the foundations of the welfare arrangement, as actors are engaged in conflictual negotiation regarding dominant values, in which new values challenge old (Pfau-Effinger, 2005: p.11) though actors still behave under the influence of the structures and models that they challenge (Pfau-Effinger, 2005: p.14). The welfare arrangements of Scandinavian states act as strong points of identity for policy makers and the general public (Cox, 2004: p.206). Due to the looseness of concepts such as universalism and solidarity , differing policy options can be framed as promoting these values by emphasising particular dimensions of them (Cox, 2004: p.207). Means-tested benefits can be incorporated within a concept of universalism by emphasising that, in making those that can afford to contribute do so, benefits can be targeted at those most in need (Cox, 2004: p.212). Changing the dimension of a value can change the extent to which it can be called generous , as it changes the level of benefits, the duration for which one can receive them, or the conditions necessary to qualify for them (Allan & Scruggs, 2004: p.350-351).

To conclude, through an exploration of the emergence of regime types and the entrenchment and institutionalisation of values historically associated with the relative power of both left and right political parties and working class mobilisation, the essay has shown the extent to which institutions result in the formation of values and attitudes that condition expectations of welfare generosity within a country, alongside the framing of particular discourses regarding the impact of globalisation and the antagonism and renegotiation of certain values integral to welfare states. This in turn has been shown to exert significant impact on the realm of possibilities for policy makers, implying a degree of path dependency based on the dominant values within a welfare regime. The differences in welfare state generosity are thus conceived as the result of interplay between the historical institutionalisation of values based upon the differing conditions of welfare state emergence within a country, alongside the extent to which policy makers can challenge these values discursively by appealing to exogenous factors or challenging dominant definitions of values related to welfare provision.

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