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Drawing on recent work and data on social protection in the developing world, this essay evaluates the current state of the art and suggests several important new lines of research. We first examine the historical origin and evolution of social protection systems in developing countries, arguing that insufficient attention has been paid to the authoritarian roots of developing nations' social policy. As a preliminary effort to remedy this shortcoming in the literature, we offer a political logic for the observed variation in the character of institutions of social policy established by nondemocratic regimes. Next, we explore recent research examining linkages between models of economic development and welfare regimes in developing countries. Finally, we turn to the study of the political determinants of the social policy reforms that occurred in the final decades of the twentieth century, arguing that variation in reform across policy areas has been more complex than is generally appreciated in the literature. To explain this variation, we develop a theory that identifies the political coalitions supporting different policy outcomes.
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ANRV377-PL12-06 ARI 13 April 2009 12:43
Social Policy in Developing
Countries
Isabela Mares
1
and Matthew E. Carnes
2
1
Department of Political Science, Columbia University, New York, New York 1007;
email: im2195@columbia.edu
2
Department of Government, Georgetown University, Washington, District of Columbia
20057; email: carnes.matthew@gmail.com
Annu. Rev. Polit. Sci. 2009. 12:93–113
The Annual Review of Political Science is online at
polisci.annualreviews.org
This article’s doi:
10.1146/annurev.polisci.12.071207.093504
Copyright
c
2009 by Annual Reviews.
All rights reserved
1094-2939/09/0615-0093$20.00
Key Words
social protection, welfare state, reform
Abstract
Drawing on recent work and data on social protection in the develop-
ing world, this essay evaluates the current state of the art and suggests
several important new lines of research. We first examine the historical
origin and evolution of social protection systems in developing coun-
tries, arguing that insufficient attention has been paid to the authoritar-
ian roots of developing nations’ social policy. As a preliminary effort to
remedy this shortcoming in the literature, we offer a political logic for
the observed variation in the character of institutions of social policy es-
tablished by nondemocratic regimes. Next, we explore recent research
examining linkages between models of economic development and wel-
fare regimes in developing countries. Finally, we turn to the study of the
political determinants of the social policy reforms that occurred in the
final decades of the twentieth century, arguing that variation in reform
across policy areas has been more complex than is generally appreci-
ated in the literature. To explain this variation, we develop a theory that
identifies the political coalitions supporting different policy outcomes.
93
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INTRODUCTION
Our understanding of the development of poli-
cies of social protection is uneven across the
regions of the world. We know a great deal
about the causes and distributional implica-
tions of social policies in developed countries
(Esping-Andersen 1990, Huber & Stephens
2001). By contrast, our grasp of the variation in
the design and economic consequences of so-
cial policies in developing economies is sketchy
and preliminary. Although the study of social
policies in countries outside the OECD is a
rapidly growing area of research (Wong 2003;
Weyland 2005, 2007; Segura-Ubiergo 2007;
Brooks 2008; Haggard & Kaufman 2008), po-
litical science as a field is far from understanding
the variation in the character of social protec-
tion and the political factors that have caused
these outcomes.
A first striking indicator of the incomplete-
ness of our knowledge is the absence of ba-
sic descriptive information regarding the cross-
national and temporal variation in the level of
social protection. In many developing coun-
tries, the introduction of social policy legis-
lation occurred in the early or middle twen-
tieth century, yet we still lack reliable data
on the implementation of these policies, the
scope of coverage, or the levels of benefits. In
some cases, social policy legislation provided
genuine protection to many citizens for vari-
ous employment-related risks. In other cases,
however, such measures were no more than
promises that were not fulfilled or that were
implemented in a highly discretionary fash-
ion. For example, according to data on “offi-
cial” levels of social protection recorded by the
Social Security Administration of the United
States, 40 sub-Saharan countries had policies of
old-age and disability insurance in place, with
“promised” levels of social protection roughly
comparable to that found in economies with
much higher levels of economic development
(Social Security Administration 1999). Yet this
information on social policy commitments is
clearly contradicted by case studies of the im-
plementation of these policies. Similarly, in
Latin American countries, governments have
reneged on multiple occasions on many of the
social policy promises enshrined in their leg-
islation. In both regions, highly uneven social
protection resulted because governments either
lacked the administrative capacity to enforce
contributions to social insurance or deliberately
chose to manipulate social insurance to benefit
particular sectors.
A second shortcoming of the existing
research is the absence of systematic cross-
national and temporal data on the implementa-
tion and design of social policies. This has hin-
dered our understanding of the distributional
impact of social policies andtheir effects on eco-
nomic and labor market outcomes, such as the
level of employment, overall labor force par-
ticipation rates, and economic growth (Mares
2007a). Consider for example the relationship
between the level of social protection and the
size of the informal economy. Since the influ-
ential paper of Harris & Tadaro (1970), social
security contributions and other labor market
regulations have been argued to be the main
cause of labor market “dualism” in many devel-
oping countries, segmenting employment be-
tween secure, higher-paid jobs in the formal
sector and precarious, lower-paid informal jobs.
High social security contributions and above-
market-clearing wages were theorized to force
workers to queue for jobs in the formal sec-
tor and subsequently shunt many workers into
the informal economy. However, a growing
amount of empirical evidence raises significant
doubts about the explanatory power of this re-
ceived wisdom. For example, over the past two
decades, lack of enforcement of minimum-wage
legislation in many Latin American countries
has resulted in a tremendous downward flex-
ibility of wages in the formal sector. At the
same time, many social insurance programs
have been dismantled or have experienced se-
vere cutbacks. Yet despite these changes, we see
no decline in the size of the informal economy
across the region. By 2005, the best estimates
show that 50% of all salaried workers in Latin
America continued to work informally (Galiani
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ANRV377-PL12-06 ARI 13 April 2009 12:43
& Weinschelbaum 2006). These results call into
question the expected positive relationship be-
tween social insurance expansion and informal-
ity, leaving us with no convincing alternative
theory of the factors that cause variation in the
size of the informal sector.
Third, many developing countries have ex-
perienced tremendous social policy change
in recent decades. Countries as diverse as
Thailand and Bolivia have enacted a wide range
of social policy reforms—modifying the level of
insurance coverage, the eligibility conditions,
and the mix between private and publicly pro-
vided benefits received by their citizens. How-
ever, the direction of these changes is still in-
sufficiently understood (Mares 2007b). Have
welfare states around the world been driven
by the competitive concerns of globalization to
adopt “residualistic” models, characterized by
narrow social insurance coverage and a strong
reliance on private-type institutions of social
protection? Do we find significant differences
across policy areas in the direction and mag-
nitude of policy change? Have some particular
subsystems of the welfare state been more vul-
nerable to retrenchment than others? Although
the study of the recent politics of welfare state
adjustment in developing countries has been a
rapidly growing area of research in recent years,
many puzzles remain. We have an insufficient
understanding of the variation in the distribu-
tional implications of policy changes enacted in
recent years. Existing studies do not adequately
explain the strong divergence across policy ar-
eas (often within the same country); we need
an explanation that is grounded in a coherent
micro-logic and can account not only for the
preferences of political and bureaucratic elites
but also for the preferences of organized groups
and mass publics.
Fourth, the empirical bias that has char-
acterized the existing literature on compara-
tive systems of social protection has limited the
efforts of scholars to test competing explana-
tions against each other. Most of the explana-
tions that seek to account for cross-national dif-
ferences in the level of social protection have
only been tested in a narrow subsample of
countries that covers 14–18 OECD economies.
In this limited universe of cases, the theo-
retical variables that are considered important
determinants of the trajectory of social pol-
icy development—such as the strength of left-
wing partisanship, the organizational density of
business and labor, and the type of electoral
system—are highly correlated with each other.
As a result, many quantitative studies of the de-
terminants of social protection in advanced in-
dustrialized countries leave out important ex-
planatory variables and are unable to test all
relevant competing theories against each other.
Broadening our sample size by including de-
veloping countries allows us to overcome prob-
lems of multi-collinearity and to include a larger
number of potential explanatory variables in
our estimations. A study of policies of social
protection with a broader empirical scope can
have important theoretical externalities.
Drawing on recent work and data on so-
cial protection in the developing world, this
article evaluates the current state of the art
and suggests several important new lines of re-
search. We first examine the historical origin
and evolution of social protection systems in
developing countries, arguing that insufficient
attention has been paid to the authoritarian
roots of developing nations’ social policy. As
a preliminary effort to remedy this shortcom-
ing in the literature, we offer a political logic
for the observed variation in the character of
institutions of social policy established by non-
democratic regimes. Next, we explore recent
research examining linkages between strategies
of economic development and welfare regimes
in developing countries. This represents a novel
agenda of research, paralleling the latest re-
search on social policy in advanced industrial-
ized societies. However, it requires better speci-
fication of its micro-foundational logic. Finally,
we turn to the study of the political determi-
nants of the social policy reforms that occurred
in the final decades of the twentieth century,
arguing that variation in reform across policy
areas has been more complex than is gener-
ally appreciated in the literature. To explain this
variation, we develop a theory that identifies the
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political coalitions supporting different policy
outcomes.
THE HISTORICAL ORIGIN
OF SOCIAL POLICIES IN
DEVELOPING COUNTRIES:
THE UNEXPLORED POLITICAL
LOGIC OF AUTHORITARIAN
GOVERNMENTS
The first generation of research examining the
variation in social policy has explored the im-
pact of underlying structural variables—such as
the level of economic development or the level
and speed of industrialization—on the level
of social spending. For economists, the mech-
anism linking higher economic development
and higher levels of social spending goes back
to Wagner’s observation that spending on so-
cial transfers rises as incomes rise. This pos-
itive income elasticity of government trans-
fers is expected to account both for the steady
growth of social spending and for the observed
cross-national variation. Political scientists, by
contrast, emphasize the new needs and vulner-
abilities in the economy created by the pro-
cess of industrialization. Early empirical work
on OECD countries found a positive correla-
tion between the level of industrialization or
economic development and aggregate social
spending (Wilensky 1975). However, the rela-
tionship between economic development and
the size of the government or the level of gov-
ernment revenues does not prove to be ro-
bust in a broader sample that includes devel-
oping countries (Adsera & Boix 2002, Mares
2005a). Economic development does not seem
to explain much of the variation in spend-
ing among developing countries. The short-
comings of these variables point to the need
to consider political determinants of social
policy.
Among the latter, perhaps the most stud-
ied question in the literature has been the re-
lationship between regime type and the size of
the government. Typically, this work has argued
that democracies, owing to their need to cater
to a broad electoral base, will have more ex-
tensive social policy commitments. The logic
is that competition among political candidates
will lead to social policy expansion to reach new
groups of voters. Likewise, democratic free-
dom permits interest group organization and
pressure for the increase of social spending
(Haggard & Kaufman 2008). Although some
disagreement exists (Mulligan et al. 2003), the
quantitative literature seems to support this
contention that democracies spend more than
nondemocracies on particular social programs
(Przeworski et al. 2000, Lake & Baum 2001,
Avelino et al. 2005).
Within democracies, we now know a great
deal about patterns of social spending and pol-
icy, especially in developed economies. For ex-
ample, left-wing, labor-associated governments
are more likely to undertake greater social
spending (Esping-Andersen 1990, Huber &
Stephens 2001); yet, these effects are more
pronounced in the formative years of labor-
associated parties than in the later, reform
period—in which these parties have often pro-
tected their core constituencies of “insiders” at
the cost of the broader working class (Rueda
2005). On the other side of the political spec-
trum, employers and associated parties on the
right are not univocally opposed to social
policy expansion. Under certain conditions—
such as increased economic competition or
the presence of industrial risks in the produc-
tion process—firms may support government-
administered social protection schemes and
thus enter into cross-class alliances with work-
ers (Mares 2003, 2005a; Swenson 2002).
However, one significant weakness of this
literature is its binary distinction between
democracy and nondemocracy. This blunt di-
chotomy misses the important variation in so-
cial spending and social policy design within
regime types. More fundamentally, even when
variation in regime types appears to account for
differences in the growth of social policy ex-
penditures, it cannot explain the political ori-
gin of social insurance programs. As Esping-
Andersen (1990, p. 15) pointedly remarks, “the
thesis that democracy leads to larger welfare
states confronts the historical oddity that the
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·
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Table 1 Regime type at time of first adoption of social insurance policies, by region
Region Regime type Old age Disability Sickness Unemployment
Latin America authoritarian 12 16 13 0
democratic 2 3 1 3
Advanced industrialized nations authoritarian 7 8 7 2
democratic 15 14 13 19
Eastern Europe authoritarian 9 7 8 2
democratic 0 2 1 2
Africa authoritarian 3 4 3 1
democratic 0 0 0 0
Middle East authoritarian 5 8 3
democratic 1 0 0
Asia authoritarian 4 9 2
democratic 2 2 3
TOTAL authoritarian 40 52 36 5
democratic 20 21 18 24
Sources: Flora & Heidenheimer 1981; Mares 2005a; U.S. Social Security Administration, Social Security Programs
Throughout the World, various years.
first major welfare state initiatives occurred
prior to democracy and were powerfully moti-
vated to arrest its realization.” In the European
context, nondemocratic regimes—such as those
of Bismarck in Germany and von Taaffe in
Austria—pioneered social insurance legislation,
and the expansion of social programs often oc-
curred under conditions of limited suffrage.
One quantitative analysis of the evolution of so-
cial spending in Europe during the last decades
of the nineteenth century and the first two
decades of the twentieth century suggests that
variables capturing differences in the type of
democracy can account for only very small dif-
ferences in social spending (Lindert 1994).
In the case of developing countries, regime
type even more strikingly fails to account for
differences in the origin of social programs.
Here, the overwhelming number of social in-
surance programs were initially adopted by
nondemocratic governments. Table 1 presents
data on regime type at the time of the adoption
of different social policies. Several regional pat-
terns stand out. In Europe and North America,
the majority of policies were adopted by democ-
racies. Only one third of the earliest measures
(disability, old age, and sickness) were instituted
under autocracies. We find the opposite pat-
tern when we move to different regions of the
world. Disability insurance, to cover workplace
injuries that could leave workers incapacitated,
was often the first policy adopted and is the
most prevalent policy cross-nationally. How-
ever, of the 73 countries included in this sample,
>70% were autocracies at the time of adoption.
And when the advanced industrialized nations
are removed from the total, fully 88% of de-
veloping nations adopted disability insurance
under authoritarian rule. Both old-age insur-
ance and sickness insurance show similar pat-
terns, with twice as many autocratic nations in-
stituting these programs as democracies. The
only departure from the pattern of authoritar-
ian first-adoption has been unemployment in-
surance. Far more limited cross-nationally, un-
employment insurance is largely restricted to
the advanced industrialized nations, and thus
was adopted primarily under democracies.
Nondemocratic regimes have adopted so-
cial insurance programs that vary dramatically
in the scope of insurance coverage, the ag-
gregate level of benefits, and the composition
of those benefits. In some cases, authoritarian
governments have designed policies to serve
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extremely narrow political clienteles and have
been able to maintain this narrowness of cover-
age despite rapid economic change and grow-
ing affluence. For example, prior to democrati-
zation in Taiwan, the major old-age insurance
program—the Labor Insurance Act—provided
employment-related benefits to <10% of the
labor force. In contrast, other authoritarian
regimes have chosen to enact universalistic
health care and education systems. For exam-
ple, in Brazil in 1971, the military government
of Emilio Medici presided over a dramatic ex-
pansion of social insurance in the countryside
(Malloy 1979).
Theories linking regime type and social pol-
icy thus need to be grounded in an explana-
tion of the internal political dynamics of these
regimes. Unfortunately, prevailing theories of
autocracies offer very limited guidance in this
effort. Much of the theoretical work on autoc-
racies tends to be taxonomical; it has generated
a long list of possible nondemocratic regime
types (O’Donnell 1979, Linz 2000). These in-
clude “neo-sultanistic, neo-patrimonial, per-
sonal, bureaucratic authoritarian, military, in-
clusive military, exclusive military, single party,
dominant (or hegemonic) party, semiauthor-
itarian, autocratic, and totalitarian—to name
some of the most commonly used categories
of authoritarian government” (Haber 2007,
p. 694). This attention to the diverse institu-
tional shapes of autocracies has proven helpful
in understanding the specifics of particular
cases, but it provides less traction in cross-
national comparisons and cannot account for
the variation in policy output of nondemocratic
regimes. To illustrate this point, consider the
broad variation in the social policy legislation
adopted by military regimes. Some of these
regimes have adopted policies that favor ur-
ban labor, whereas others have taken a harsh
and repressive stance against industrial work-
ers. Still other military regimes have introduced
universalistic social insurance. In short, “mili-
tary regimes”—one critical category of prevail-
ing taxonomies of autocratic regimes—is not
particularly helpful in explaining variation in
social policy outcomes.
Turning our attention to the relationship
between autocratic regimes and their popula-
tions has significant predictive power regarding
the design of, and spending on, social welfare
policies. In doing so, we build on recent work
that has sought to better specify the political
economy of autocracy, noting the dilemma au-
thoritarian rulers face in remaining in power
over a population whose support can never be
completely trusted (Wintrobe 1998). In partic-
ular, the group that maintains the autocrat in
power, which can also credibly mount a chal-
lenge to her rule, has become central to “selec-
torate” theories of political survival (Bueno de
Mesquita 2003). Organizations strong enough
to put an autocrat in power must also possess
the resources to end her rule. Three distinct
political equilibria exist as solutions to the “au-
tocrat’s dilemma,” the challenge of preserving
her rule in the face of her launching organiza-
tion (Haber 2007).
In a first scenario, the leader attempts to
eradicate the power of the launching organi-
zation through a strategy premised on terror,
torture, and purges. If the dictator succeeds,
the outcome is one of unconstrained power
and discretion. Under these conditions, how-
ever, the dictator will be unable to commit her-
self not to expropriate predatorily all returns
from economic activity. The consequence is a
lack of investment in these regimes, which will
depress economic activities and tax revenues.
The implications for social policy are relatively
straightforward: One should see little or no so-
cial policy legislation enacted by these regimes.
Much like the classic “stationary bandit” with
a short time horizon, they extract rents to the
maximum extent possible and target spending
on their repressive apparatus (Olson 1993).
The second potential strategy pursued by
authoritarian leaders in their conflict with com-
peting organizations is one of collusion. In this
equilibrium, the dictator seeks to prevent coups
by providing leaders of the launching organi-
zation with a stream of rents in selected eco-
nomic sectors, and by simultaneously restrict-
ing the level of economic competition in the
nation. Measures such as barriers to entry, the
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selective allocation of import permits, and the
requirement of licenses or concessions to enter
particular economic activities confer an ongo-
ing privileged status on members of the launch-
ing organization (Haber 2007). To be effective,
the dictator must also bind her own hands and
those of her rivals and private economic agents,
limiting them to a pattern of distribution of
rents that increases the costs of their defec-
tion from this arrangement. In other words, the
dictator sets up institutions that alleviate rivals’
fear of arbitrary expropriation and also guaran-
tee them a steady stream of rents (Haber et al.
2003).
The strategy of collusion has distinct impli-
cations for the design of social policies. Con-
sistent with a set of economic policies premised
on the creation of monopolies, we expect to see
the establishment of “restrictive” social policies,
characterized by narrow coverage and generous
benefits. Thus, the beneficiaries of social policy
largesse will be workers in the state-owned or
private-sector industries on which the regime is
also conferring trade protection and other priv-
ileges. High levels of benefits ensure the loy-
alty of these workers to their leaders and their
employers, reducing strikes and other labor ac-
tivism and encouraging wage moderation. Fi-
nancing for these generous programs is made
possible by the monopoly rents these industries
enjoy.
An example of this sort of collusive social
policy occurred under the “immigrant regime”
of the Nationalist government in Taiwan. Po-
litically, this regime relied on the support
of “mainland Chinese” who had immigrated
with Chiang Kai-shek to Taiwan during the
civil war. The institutions and policies put in
place by Chiang Kai-shek contained strong fa-
voritism toward this group and an implicit bias
against native Taiwanese, denying them partic-
ipation in the national power structure (Tsai &
Chang 1985), through a strategy often referred
to as “internal colonization” (Hechter 1975,
Grabowski 1988). Thus, even though the main-
land Chinese constituted a minority in number,
they enjoyed disproportionate power and were
able to set up the political and economic insti-
tutions to benefit their friends and buy off their
potential adversaries.
The Nationalists’ social policy legislation
was introduced by presidential decree—rather
than an act of the legislature—on March 1,
1950, the day of Chiang Kai-shek’s politi-
cal inauguration. The centerpiece of the leg-
islation was the Labor Insurance Act. Cov-
erage was limited to employees of central
and local government-owned enterprises and
blue-collar workers in private enterprises with
more than ten employees. In the same year,
the government introduced soldiers’ insurance.
In short, the government instituted a system
that benefited its most likely challengers—
fellow Nationalists (the launching organiza-
tion), workers with the potential to organize
(and the holders of private capital for whom
they worked), and the military.
A third distinct political equilibrium found
in authoritarian governments is characterized
by organizational proliferation. In this case, the
dictator encourages the creation of competing
organizations in order to raise the costs of col-
lective action by the launching organization.
We seethislogic at work in a variety of cases that
have been categorized as distinct regime types
by previous studies: military governments that
encourage the creation of political parties or
one-party Communist regimes that foster po-
litical competition among rival organizations,
such as the secret police and the military. Haber
invokes Mexico under the PRI as the paradig-
matic case of this political strategy. As Haber
(2007, p. 703) argues, “the key to the PRI’s suc-
cess was that it sat at the center of a network of
organizations which were designed to align the
incentives of a wide variety of organized cor-
porate groups, making it extremely difficult for
any of them to mount a credible challenge to
the party’s monopoly on power.”
In sharp contrast to the collusive autocracies
or to dictatorships that pursue strategies of po-
litical terror, regimes premised on this logic of
organizational multiplication confer economic
rights to broader segments of the population.
Although their resulting property rights sys-
tem is more extensive, it is also more uneven,
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as groups that have been granted some pri-
vate property rights can easily usurp the rights
of unprotected individuals. These regimes of-
ten produce a chaotic mix of economic policies
granting selective benefits to a variety ofgroups.
In the past century, authoritarian governments
that employed organizational proliferation fre-
quently pursued economic strategies involving
import substitution, targeting tariff policies and
government spending to benefit key groups of
local producers and workers, and thus buying
their political support and diffusing potential
tensions.
This characterization of the logic of orga-
nizational proliferation pursued by the PRI in
Mexico resonates with the characteristic poli-
cies pursued by “state corporatist” regimes
(Schmitter 1979). In this strategy, the state
organizes society into constituent units that
are “limited in number” by government re-
striction, “singular” because competitors have
been eradicated, “compulsory” through legal
or other institutional constraints, “noncompet-
itive” owing to state intervention, “hierarchi-
cally ordered” under state management, “func-
tionally differentiated” through organizations
such as industrial unions, recognized by the
state, with a “representational monopoly” on
members of their group, and with state “con-
trols on leadership selection and interest ar-
ticulation” (Schmitter 1979, pp. 20–21). The
organizational proliferation model seeks to co-
opt existing competitors by incorporating them
into the system of benefits as under collusive au-
thoritarianism, but it also seeks to cultivate new
organizations. These new organizations dilute
the power of elites from the launching orga-
nization, and they create overlapping responsi-
bilities and restraints on defection. Indeed, the
total pool of beneficiaries grows substantially
such that even if benefits are uneven, mounting
a credible threat against the government may
be difficult. Rents in various forms reach more
members of the population.
The social policy profile of autocracies pur-
suing a political strategy premised on organi-
zational proliferation will differ dramatically
from the social policy profile of other autocra-
cies. One expects these autocracies to enact so-
cial policies with two (seemingly contradictory)
policy characteristics. On the one hand, the so-
cial policies will be characterized by high levels
of institutional fragmentation. This is associ-
ated with pronounced inequities in the level of
social policies. They will, most likely, resemble
the “conservative welfare regimes” of advanced
industrialized democracies, where we find pol-
icy privileges granted to civil servants and a
large number of occupational groups (Esping-
Andersen 1990). On the other hand, the level
of social policy coverage found in these regimes
will be much broader than the coverage under
collusive autocracies.
The political development of social pro-
tection in many Latin American countries
provides ample examples of this logic. Under
the military junta that came to power in 1943
in Argentina, efforts were made to develop
new ties to labor through a number of state-
administered social policy measures, including
pensions, public health and social assistance,
housing finance, and unemployment insurance
(Godio 2000). Yet the mix of benefits varied
greatly. Wages were significantly lower for
government workers and health and education
workers, but these sectors were compensated
through even stronger job protections (Carnes
2008). Equally importantly, the 1945 Law of
Professional Associations assured labor union
bargaining rights and recognized monopoly
unions in each industrial sector; however, this
measure also limited the independence of labor
and restricted its right to strike (Collier &
Collier 2002). In Brazil, too, the harder-line
military regime that emerged in 1964 first
sought the most radical kind of organizational
proliferation—establishing an “official” oppo-
sition party—the Democratic Movement of
Brazil (MDB). When this proved impossible to
manage, the government sought to fragment it
into smaller parties. On the social policy front,
it extended social security entitlements to rural
workers in 1971, and in 1974 gave pensions
to older urban workers who had not made
full payments into the social security system.
Both were clear efforts to win the allegiance
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of alternative political bases. However, the
benefits to these rural and informal workers
lagged far behind those enjoyed by industrial
and civil service workers (Haggard & Kaufman
2008). Our third example of organizational
proliferation comes from Mexico (Haber
2007). Seeking to consolidate control over a
nation wracked by the regional and economic
rivalries of the 1910–1920 Mexican Revolu-
tion, Plutarco El
´
ıas Calles and his successors
designed their new party to gather the disparate
strands of the population—with sections for
the military, peasants, industrial workers, and
“popular” middle classes (Skidmore & Smith
2005). Although the Instituto Mexicano de
Seguro Social (IMSS) was not created until the
1940s and was restricted to a small number of
beneficiaries, it would be gradually expanded
to larger segments of the urban working class.
Benefits were not even, though, as state work-
ers received the far more generous assistance
of their own social security agency (ISSSTE).
The conditions under which authoritarian
governments choose a strategy based on orga-
nizational co-optation versus proliferation re-
main uncertain. It would seem that the number
of critical supporters that make up the launch-
ing organization—roughly analogous to the
“selectorate” in the terminology of Bueno de
Mesquita et al.—is central to the choice of strat-
egy. Where membership in the launching or-
ganization is more restricted, and where other
potential challengers are limited in number, it
is easier to set up institutions to favor the focal
elites. Conversely, when the autocrat is brought
to power by a broad coalition of interests, or in a
civil conflict with many disparate parties and in-
terests, then organizational proliferation will be
preferred. This allows the autocrat to cultivate
ties to each of the potential challengers, frag-
menting them and frustrating their efforts to
collectively bring down the regime. Finally, the
initial political ties and the ideological goals of
the launching organization constrain the policy
choices of the dictator, leading to policies with
distinct distributional biases.
Given the large number of cases in which so-
cial policy adoption occurred under autocracy,
and the scant attention it has received in the ex-
isting literature, we contend that future studies
must deepen our theoretical understanding of
the political (especially authoritarian) dynamics
driving social policy development. We have of-
fered a preliminary outline of such an approach,
but in-depth case studies are needed to test its
logic.
VARIETIES OF DEVELOPMENTAL
CAPITALISM AND VARIETIES OF
WELFARE REGIMES
The explanation outlined above attributes di-
vergence in social policy outcomes to differ-
ent levels of political competition within auto-
cratic regimes. However, a number of scholars
argue either that regime type is epiphenome-
nal or that its causal effect is strongly medi-
ated by other variables (Haggard & Kaufman
2008). In this related line of research, a number
of studies are seeking to relate cross-national
differences in social insurance programs to dif-
ferences in the economic strategies pursued by
various countries (Wibbels & Ahlquist 2007,
Haggard & Kaufman 2008). This promising
line of research is characterized by an intense
search for the “first-order” causal variables that
explain the initial adoption of a developmental
model of capitalism.
The theoretical antecedent of these studies
is the scholarship stressing the causal linkages
between “production regimes” and “welfare
regimes” in advanced industrialized economies
(Kitschelt et al. 1999, Hall & Soskice 2001,
Ebbinghaus & Manow 2001). These studies
have identified systematic cross-national diver-
gence in the organization of financial and in-
dustrial relations systems among advanced in-
dustrialized countries, distinguishing between
coordinated and liberal market economies. In
coordinated market economies, a dense net-
work of business organizations as well as the
provision of patient capital by firms facilitates
high levels of investment in firm- or industry-
specific skills. The presence of these institutions
of nonmarket coordination affects the social
policy preferences of employers and workers in
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ANRV377-PL12-06 ARI 13 April 2009 12:43
these economies and the formation of cross-
class alliances in support of social policies that
protect investment in skills (Estevez Abe et al.
2001; Mares 2001, 2003). These include insur-
ance policies with earnings-related benefits that
raise the reservation wage of high-skilled work-
ers and lower their willingness to take up jobs
that do not correspond to their qualifications.
By contrast, in liberal market economies, firms’
incentives to undertake long-term investments
in the skills of their workers are lower because
of weak employers’ associations and fluid capi-
tal markets. In this context, cross-class alliances
among employers and employees are less likely
to form, and business is more likely to press for
the deregulation of labor markets and for re-
ductions in social policy benefits (Wood 2001).
More recently, attention has turned to the
ways that nations use social policies to shape or
create a labor force adequate to their “particu-
lar development projects” (Wibbels & Ahlquist
2007). According to this logic, the choice of so-
cial policies is not driven by partisan politics or
by the level of democracy or even by regime
type, but by four structural conditions: domes-
tic market size, relative abundance or scarcity of
labor, asset inequality, and the openness of the
international economy. The resulting policies
tend to cluster on three main “regimes” that
emphasize redistributive social security insur-
ance, human capital development, or a mix of
the two.
In countries marked by large domestic
markets, scarce labor, and high inequality,
inward-oriented “import-substitution industri-
alization” (ISI) development strategies predom-
inated as a response to the Great Depression.
Capitalists sought to create a labor force capa-
ble of domestic industrial production, as well as
a consumer base capable of absorbing their out-
put. To do so, they needed to invest in skill de-
velopment among workers, and they looked to
social policy as a way to retain workers by insur-
ing them against the risks of injury or sickness.
Urban industrial workers came to possess a high
level of bargaining power in these labor-scarce
economies and were able to effectively organize
to lobby for “insurance-based social regimes”
(Wibbels & Ahlquist 2007). Capitalists were
supportive of this redistribution through social
security programs because it ensured continued
demand for their domestically produced goods.
In contrast, in large, labor-abundant, and
low-inequality economies, ISI policies were
staved off through the efforts of relatively
stronger rural sectors who would not tolerate
the urban bias of ISI. In these cases, “export-led
industrialization” (ELI) was chosen. Capitalists
required two features in the labor market—a
skilled workforce and low labor costs—in or-
der to remain internationally competitive. They
favored a “human capital” social policy regime
emphasizing education and health care and with
little or no redistributive social policy (Wibbels
& Ahlquist 2007). In these cases, workers have
not felt the need to call for more redistribu-
tion, and collective action has been complicated
by the relatively large and homogenous labor
force.
Finally, a “mixed” social spending regime
combines “modest levels of insurance and hu-
man capital spending” (Wibbels & Ahlquist
2007). These regimes have occurred in coun-
tries with large domestic markets and abun-
dant labor, but in which ISI developed ow-
ing to high levels of inequality. Nevertheless,
the abundance of labor made it impossible for
workers to collectively demand high insurance
spending, leading to only moderate redistribu-
tion and the adoption of some human capital
spending. Similar mixed outcomes may also oc-
cur in smaller countries with mineral wealth.
This elegant and parsimonious theory
presents a novel explanation of the determi-
nants of social spending in developing coun-
tries. Several aspects of this theory, however,
require further analysis. A critical assumption
is that all leaders facing similar structural con-
ditions will happen upon similar development
strategies with similar implications for social
policy spending. However, we have suggested
above that authoritarian regimes may have po-
litical motives, unrelated to structural economic
conditions, that determine their patterns of so-
cial spending. A political answer based on the
electoral needs of the government in power
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underwriting the ISI policies with subsidies and
trade protections needs to be developed.
In addition, the causal connection between
some of the underlying structural variables and
a developmental regime is often unclear in this
theory. On the one hand, many of the struc-
tural factors that are taken as given and exoge-
nous might be in fact endogenous to the politi-
cal process and social policy regime adopted. In
particular, levels of inequality and labor mar-
ket stratification would seem to be both causes
and consequences of the educational system
and of social policy more generally. In addi-
tion, many countries show significant variation
over time in their levels of labor scarcity. Fi-
nally, several countries experienced significant
changes in their developmental model. Korea
shifted from an ISI model to ELI in the mid-
1950s (Chibber 2003). Many Latin American
countries pursued the ISI strategies for only
brief periods of time. Models relying on time-
invariant structural variables cannot account for
this contingency in the choice of developmental
models.
The preferences and incentives of politi-
cal actors over different policy choices also
are inadequately specified. Consider the choice
whether or not to invest in educational poli-
cies. It is unclear why both workers and em-
ployers under ISI do not prefer spending on
education, recognizing the advantages of such
a choice in the long term. Why do workers not
call for more broad-based educational efforts?
Why would employers prefer to bear the cost
of educating workers in basic skills when they
could outsource education to the government?
Further, recognizing the gains that could be
made if efficiency were achieved and markets
opened, why would capitalists “vote” against
universalistic education that would make work-
ers interchangeable and lower the wage rate?
A political answer, based on the concentration
of rents for industrial workers and the electoral
needs of the government in power underwriting
the ISI policies with subsidies and trade protec-
tions, needs to be developed.
A final difficulty with this approach is that
it emphasizes policy continuity and tends to
downplay the variation in social spending that
occurred over time, especially in the most re-
cent decades. The examples of South Korea,
Tunisia, and Mexico, which are cited as pre-
senting stable social security spending, actually
show increases of 100% or more (and decreases
of 50% or more) in particular policy areas in
the period of 1970–1982. Thus, although de-
scribing spending regimes is helpful, this anal-
ysis may miss some of the most important and
politically contentious modifications that have
happened over time.
An alternative structural approach empha-
sizes the importance of “critical alignments”
that occurred in the mid-twentieth century in
different regions of the world, and contends
that distinct logics are needed to explain the dif-
ferent processes of social policy adoption and
reform in developing countries (Haggard &
Kaufman 2008).
Analyzing spending levels in each of the
three principal social policy areas—pensions,
health, and education—the critical-alignments
approach proposes three regional social welfare
types for Latin America, Asia, and Eastern
Europe (Haggard & Kaufman 2008). Com-
paring social programs in 1980, Haggard &
Kaufman describe how “social security spend-
ing in Latin America dwarfs that of East Asia’s
minimalist welfare states,” whereas Eastern
European nations consistently outspend (often
by a factor of two) the Latin American states. In
health care, Latin America tends to emphasize
curative health care while Asia spends propor-
tionally more on basic health care. In education,
although spending levels are not radically dif-
ferent between the two regions, Latin America
devoted more spending to secondary educa-
tion, and Asia showed superior performance in
student retention through fifth grade.
Critical realignments are argued to have
provided the genesis of the distinct social wel-
fare policy regimes in the mid-twentieth cen-
tury in each region, through which the chang-
ing composition of the ruling elite led to new
“incentives to co-opt, control or repress urban
labor unions and political movements repre-
senting the working class and the peasantry”
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(Haggard & Kaufman 2008, p. 20). At this time,
the Cold War produced very different results
in Eastern Europe, where Communist dictator-
ships took control and made workers central to
their political strategy, and Asia, where viru-
lently anti-Communist leaders severely limited
the emergence of left parties and weakened la-
bor. In Latin America, reformist leaders came
from the military and middle classes and sought
to win electoral support from the urban work-
ing class by extending employment-related so-
cial insurance. Each of these ruling coalitions
played a crucial role in setting up each nation’s
development strategy—whether ISI or export-
led growth—which reinforced and supported
the coalitions. Where large urban labor forces
were co-opted or integrated into the state in
Latin America and Eastern Europe, ISI policies
were chosen, further cementing the industrial
workforce’s privileged place in the economy. In
Asia, as many of the nations emerged from colo-
nial rule in the postwar period, Cold War con-
cerns and U.S. support encouraged export-led
development strategies.
A separate logic is proposed to explain
the reform process of social welfare policy in
the three regions during the post-1980 “third
wave” of democracy. Here the causal impor-
tance of two main independent variables is
stressed. First, economic conditions in the
1980s set up a path of either expansion or con-
traction. Where economic growth and struc-
tural conditions were positive (East Asia), social
policy programs tended to expand in size and
coverage. Where these conditions were nega-
tive (Latin America and Eastern Europe), the
return to democracy was marked by a contrac-
tion of social policy commitments. Second, the
reforms of the 1980s and 1990s are argued to
build on the earlier political legacy that so-
cial policy had created in each region. Thus, in
East Asia, where social policy had been limited,
the expansion of coverage was politically pop-
ular, drawing in new supporters to democratic
governments increasingly interested in cultivat-
ing an electoral base. Conversely, in Eastern
Europe, where social policy commitments were
broad, efforts at reduction met widespread op-
position. Similarly, in Latin America, unions
that had been privileged under earlier poli-
cies opposed both expansion of coverage (which
would dilute their benefits) and retrenchment
in the programs that targeted them.
Although this complex structural analysis is
a significant advance over much of the existing
literature, the causal explanation it ultimately
presents is nearly as complex as the reality it
describes. The line between theory and history
is blurred to the point where it is unclear which
variables are more important than others.
Further, the emphasis on regional clusters
may obscure more than it reveals. On the one
hand, the “cross-regional” differences are not
as stark as they are portrayed. Consider the
differences in the relative emphasis on educa-
tional spending, which, according to this expla-
nation, differs dramatically between East Asia
and Latin America. There is no difference in
the average spending on education as a percent-
age of GDP between Latin America and East
Asia—both are 3.2%—and the difference in av-
erage education spending as a percentage of to-
tal government spending is only 2.3% (17.5%
of total spending in Asia versus 15.2% in Latin
America). Neither difference is statistically sig-
nificant ( p-values of 0.6 and 0.55, respectively).
Indeed, very few of the regional differences in
welfare state spending are statistically signifi-
cant. Morever, the “regional dummies” invoked
by this analysis conceal too much within-region
variation. This within-region difference is per-
haps starker in East Asia than in Latin America
(Ramesh 2005). Explanations for cross-national
variation within regional clusters at these crit-
ical moments invoke a long list of potential
explanatory variables, which includes regime
type, strength of the labor movement, eco-
nomic structure, strength of populist parties,
and so on. The analysis does not specify their
relative importance nor the levels and critical
values at which changes in these variables ac-
count for cross-national variation within a re-
gional cluster.
A final shortcoming of the structural
“production regime” approach, shared with
their theoretical counterpart in the literature
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focusing on advanced industrialized societies,
is their assumption of strong policy coherence
within countries. In the following section, we
show that evolution of social policies in recent
decades is characterized by tremendous varia-
tion across policy areas even within the same
country.
THE POLITICS OF SOCIAL
POLICY REFORMS
During recent decades, social policies through-
out the world have undergone significant
modification. Change and transformation
are common to both developed and devel-
oping countries. However, the magnitude of
change experienced by advanced industrialized
economies is dwarfed by the thorough-going
policy changes that occurred in Latin America,
Asia, and Eastern Europe in the 1990s.
Two kinds of policy changes have received
significant attention. The first is the wave of
pension privatization that has swept the world.
By 2005, 24 countries had adopted a private pil-
lar. The speed of privatization and the magni-
tude of policy change have varied dramatically
across countries. Some countries, such as Chile
and Mexico, have entirely abolished the pre-
existing public pillar. Others, such as Uruguay,
have adopted a mixed system, where workers’
pensions are financed by a combination of the
public and private systems. Still other coun-
tries have enacted a parallel privatization, giv-
ing their citizens a choice between the public
and the private pillar. In explaining the adop-
tion of these policies, some studies have empha-
sized the impact of the competitive and fiscal
pressures of globalization—most notably that
of capital market liberalization (Madrid 2003,
Brooks 2008). Other studies have focused on
policy diffusion through the imitation of for-
eign models, noting how cognitive biases and
heuristic shortcuts lead policy makers to fol-
low the example set by their neighbors’ reform
(Weyland 2005, 2007).
The second set of changes that has received
attention in the literature is the expansion of
social protection in East Asian economies. The
most dramatic examples are the introduction of
universalistic health insurance by Taiwan and
Korea in 1994 and 1997, respectively (Wong
2003). Explanations of these changes focus on
two consequences of democratization. First,
the incentives of politicians changed follow-
ing transitions to democracy (Wong 2004). In
the new context of heightened electoral com-
petition, these studies argue, politicians have
appealed to voters by offering social policy
promises, but they failedto internalize the long-
term fiscal implications of programmatic ex-
pansion. Because politicians from all political
parties have found this strategy attractive, par-
tisan differences carry little explanatory weight
in accounting for variation in outcomes. An-
other consequence of democratization was the
mobilization of new social groups, such as non-
governmental organizations (NGOs), which
heightened political awareness of the strong in-
equities in policy coverage and swayed political
opinion in favor of the introduction of univer-
salistic programs (H.J. Kwon 2002, S. Kwon
2002).
Current research investigating these
changes—the privatization of pensions and the
introduction of universalistic social policies—
has generated insights that complement or
challenge the findings regarding the politics of
social policy reforms in advanced industrialized
economies. One important set of theoretical
implications concerns the role of partisanship
in affecting the direction of social policy
reforms. The introduction of universalistic
social policies in Korea and Taiwan challenges
the proposition advanced by power-resource
scholars that strong and encompassing trade
unions and social democratic parties are a
necessary institutional precondition of uni-
versalism (Esping-Andersen & Korpi 1984).
Studies of pension privatization in Latin
America also reveal that left-wing parties are
not less likely than right-wing parties to adopt
pension privatization, although some studies
find a small partisan effect on the magnitude
of the reforms (Brooks 2008). Reformulating
the “Nixon goes to China hypothesis,” other
scholars have suggested that left-wing parties
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are more likely to adopt radical reforms,
owing to their superior ability to communi-
cate to their constituents the advantages of
these reforms and the absence of alternatives
(Cukierman & Tommasi 1998, Tommasi 2002).
Nevertheless, the importance of partisanship
as an explanatory variable continues to remain
contested. In recent research, Huber and
others argue that—conditional on the age
of democracies—the political strength of
left-wing parties contributes to differences in
patterns of spending across Latin America,
leading to lower levels of inequality (Huber
et al. 2006).
Recent social policy reforms in developing
countries also present challenges to explana-
tions that have stressed the constraining effects
of previous policies and institutions (Pierson
1994, 2001). Scholars of policy reforms in ad-
vanced industrialized societies have emphasized
that existing policies “exhibit increasing returns
and self-reinforcement: each step along a path
produces consequences which make that path
more attractive in the next round and raises the
cost of shifting to an alternative path” (Myles
& Pierson 2001, p. 312). An important impli-
cation of this argument is that the “stickiness”
of existing policies is higher for larger pro-
grams and for programs with a longer politi-
cal history. As Pierson argues, a policy of long
duration and large scope will have a large polit-
ical constituency supporting it, which will con-
strain efforts of politicians to change the status
quo. The wave of pension privatization that has
swept the world casts some doubt on the ex-
planatory power of this theory. The prediction
3
Targeting
4
Universalism
Redistribution
Low High
2
Privatization
1
Contributory insurance
Low
High
Socialization of risks
Figure 1
Socialization of risks.
that larger programs are stickier is not borne out
by the data: Pension programs, the largest social
policy program in most developing countries,
have been the most vulnerable to retrench-
ment. These developments point to the need to
identify the conditions under which dramatic,
“path-departing” policy change is possible even
in the presence of programs with large polit-
ical constituencies (Ebbinghaus 2005, Brooks
2008).
The emphasis on these two broad changes—
the privatization of pensions and the intro-
duction of universalistic health insurance—has
obscured other important transformations in
social policies that have taken place in many de-
veloping countries. Figure 1 maps examples of
policy changes in developing countries in a two-
dimensional policy space. The horizontal axis
captures variation in the “socialization of risks”
across different social policies. Policies taking
low values along this axis are characterized by
low levels of risk pooling. These are private-
type policies where the level of benefits is linked
either to the actuarial risk facing the individual
or to the returns made by investments in per-
sonal, private accounts. The common feature of
both policies is the individualization of risk, or
in Baldwin’s definition, the “fact that individuals
face risk alone and not as part of a broader com-
munity of risks” (Baldwin 1990, p. 3). Policies
taking high values on this axis are characterized
by a high diffusion of risks across covered oc-
cupational groups. The vertical axis measures
the redistribution undertaken by the particular
social policy, in other words, the “propoor bias”
of the particular policy. Policies taking high val-
ues along this axis involve higher redistribution
from high-income to low-income groups. By
contrast, in policies taking low values along this
axis, little or no redistribution from the rich to
the poor is attempted.
Existing research has predominantly fo-
cused on two cells of the policy space. Private
old-age insurance policies occupy the lower
left-hand corner of the policy space. Although
these policies shift a significant part of the risk
to individuals, the benefit structure also favors
higher-income earners. The other policies that
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have been studied are situated in the upper
right-hand corner of the policy space. Univer-
salistic social policies in Asia are characterized
not only by high levels of coverage but also
by high levels of redistribution across income
groups. According to estimates of the Korean
Health Ministry, the ratio between health ben-
efits and contributions for individuals in the
lower 10% of the income distribution was 6.45.
By contrast, it was 0.27 for the highest 10% of
the population (Chun 2006). Studies of the dis-
tributional implications of the Taiwanese health
care sector reveal a similar pattern (Cheng
2004, 2005).
But, as Figure 1 illustrates, the other two
cells of this policy space are not empty in the
way that the literature might suggest. The vast
majority of health care reforms introduced by
Latin American countries occupy the upper
left-hand corner of this policy space. Many of
these countries have introduced reforms that
attempt to increase the access of low-income
groups to health services (Mesa-Lago 2007).
Although means-testing limits the scope of
beneficiaries of these policies (resulting in
low values on the coverage dimension), these
policies take high values on the redistributive
dimension of the social policy space. Consider
the following examples. Beginning in the
mid-1990s, the Brazilian health ministry in-
troduced policies that guarantee basic services
for lower-income groups (Weyland 2005, p.
231). In 1993, El Salvador introduced similar
policies subsidizing health benefits for the
poor. Peru introduced the Programa de Salud
Basica para Todos in 1994, which increased
basic health care in rural areas. A related policy,
the Programa de Fortalecimiento de Servicios
de Salud provided subsidies for the poor. In
Colombia, the introduction of health insurance
subsidies for poorer sectors led to an increase
in the access to health benefits of the poor
from 4% in 1993 to 40% in 1997 (Weyland
2005). In Mexico, President Zedillo introduced
Progresa, a program providing health subsidies
to low-income groups, in 1995 (Gertler 2007).
Contributory social insurance policies, lo-
cated in the lower right-hand quadrant of the
social policy space in Figure 1, are also distinct
from the other social policy alternatives dis-
cussed above. In these policies, insurance con-
tributions are not tied to the incidence of risk
faced by the individual. As a result, risk is so-
cialized, and the redistribution of risks is higher
than in private social policies. The structure
of benefits is regressive, preserving (and some-
times amplifying) market-based inequalities of
income. Korean pension reforms are an exam-
ple of a policy situated in this quadrant of the
policy space (Moon 2001).
The literature’s exclusive exploration of
quadrants 2 and 4 of the policy space has had
important consequences. Significant variation
in the design and distributive implications of
social policies has not been adequately ex-
plored. While many countries in Latin America
have privatized their old-age insurance policies,
they have also introduced health care policies
that explicitly provide benefits to the poor.
Studies of social policy reform in Asia also fail
to account for variation across policy areas. We
see the introduction of universalistic policies in
one subsystem of the welfare state, health care,
whereas the development of old-age insurance
policies has followed a dramatically different
trajectory. While Korea has introduced Bis-
marckian policies, Taiwan has recently priva-
tized its pension system. Existing explanations
focusing on regional dummies or even country-
specific attributes cannot adequately account
for this variation.
Mares (2007b) proposes a political expla-
nation of these policy outcomes that explores
the sources of variation in individual prefer-
ences over these policy alternatives and the
strategic alliances formed in support of, or op-
position to, various programs. In this model,
wage earners in the formal sector are the piv-
otal political group. These employees can ei-
ther choose to form a political coalition with
lower-income groups (and thus support poli-
cies with a propoor bias) or they can ally with
higher-income groups (supporting programs
with no effort to redistribute income). The
model also seeks to account for conditions un-
der which these coalitions support policies that
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take different values along the dimension mea-
suring the socialization of risks and favor either
“private-type” social policies that involve no re-
distribution of risks across occupations or poli-
cies characterized by broad coverage and a high
interoccupational redistribution of risks.
The preferences for social policies of the piv-
otal group are affected by several underlying
economic characteristics. These include the rel-
ative level of income and the relative risk profile
with respect to the risk insured by the program
(old age, sickness, disability, or unemployment).
The relative salience of risk versus income de-
pends on the overall level of inequality and the
distribution of risks in the economy. All things
equal, if the level of inequality is high, the bene-
fits from risk redistribution for high-risk groups
might be outweighed by their disutility in terms
of lower income. By contrast, if the level of
inequality is low, one expects the distribution
of risks to be a stronger predictor of the dis-
tributional conflicts over a new policy. This
analysis thus reconciles two competing theo-
retical claims regarding the politics of redistri-
bution, which have emphasized either income-
based (Melzer-Richard) or risk-based conflict,
showing that the relative importance of each
(income and risk) depends on the underlying
distribution of these variables in the economy.
In addition to these variables, an impor-
tant individual-level determinant of social pol-
icy preferences is the economic security of the
pivotal group—in other words, its expectation
of steady, uninterrupted employment. This as-
sumption is the basis of the complex redistribu-
tional mechanisms worked out in contributory
insurance policies. An increase in the economic
insecurity of the pivotal group—due to exoge-
nous changes such as tertiarization, an increase
in labor market flexibility, or informalization—
has important implications for its social pol-
icy preferences. On the one hand, the expected
utility derived from all forms of contributory
insurance declines. On the other hand, their
willingness to support policies with a higher
propoor bias increases because they expect
to rely on residual policies more frequently.
In other words, an increase in the economic
insecurity of wage earners in the formal sec-
tor contributes to the formation of coalitions
between this group and the poor in many de-
veloping countries.
Differences in the extractive capacity of the
state explain variation in the location of the
preferences of pivotal voters along the horizon-
tal axis of the social policy space and the choice
between private-type social policies and poli-
cies involving greater redistribution of risks. In
this model, workers in the pivotal sector choose
among different policies by comparing the costs
of these programs (their post-tax wages) against
the expected future stream of benefits. In the
case of a private program, those benefits are the
result of returns from private funds. Bycontrast,
in the case of a policy administered by the state,
future streams of benefits are a function of the
capacity of the state to enforce social insurance
legislation. If workers in the formal sector assess
that the ability of the state to enforce existing
social insurance legislation is low, they will sup-
port private-type social policies. Weaknesses in
state capacity erode the potential gains these
workers can reap from a broad redistribution
of risks. The importance of this variable differs
across policy areas: Its impact is larger for poli-
cies with a longer lag time between the payment
of the contributions and the receipt of social in-
surance benefits (such as pensions) and smaller
in policies where this lag is shorter. The impli-
cation of this argument is that the fiscal capacity
of the state affects the size of the political coali-
tions favoring different levels of redistribution.
Finally, rules pertaining to the design of dif-
ferent programs also affect the strategies pur-
sued by the pivotal sector and, hence, the com-
position of the political coalitions supporting
different policies. Consider the consequences of
the “policy externalities” of different programs
(Roemer 2006). (Policies such as immunization
programs have large externalities—they affect
the health status of all citizens.) An increase in
the magnitude of positive policy externalities
is likely to affect the probability of a coalition
between middle classes and the poor. A sec-
ond relevant feature of policy design is the lag
time between the payment of contributions and
108 Mares
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ANRV377-PL12-06 ARI 13 April 2009 12:43
the receipt of social policy benefits. We expect
pivotal groups to discount more strongly the
promised social policy benefits in policies with
a high lag time and favor more limited social-
ization of risks and income redistribution.
To summarize the above discussion, the
four outcomes identified in the policy space
in Figure 1 are distinct political equilib-
ria supported by different political coalitions.
Figure 2 presents these coalitions, showing
how their interaction with the level of state ca-
pacity produces each of the distinct outcomes.
They are “self-sustaining” in the sense that ac-
tors supporting them have no incentives to de-
fect. Contributory insurance policies (quadrant
1) are supported by a coalitionof middle and up-
per classes in conditions of high state extractive
capacity. These Bismarckian policies—once the
modal social policy adopted by developed and
developing countries alike—are rare in recent
decades. Changes in economic conditions, such
as the decline in the importance of full-time
employment, make these policies less attractive
to urban workers than alternatives where ac-
cess to benefits is not contingent on an unin-
terrupted stream of contributions. In contrast
to contributory insurance programs, universal-
istic policies (quadrant 4) rely on a coalition of
the middle classes and the poor in economies
with high extractive capacity. In these environ-
ments, middle-class workers are likely to accept
a policy outcome that redistributes to the poor
if their economic prospects are secure and if the
poor have a better risk profile, which thus cre-
ates gains from redistribution of risks (Mares
2003). In countries with weak extractive capac-
ity, we find either coalitions between the middle
class and the poor in support of means-tested
programs (quadrant 3) or coalitions between
the middle class and the rich in favor of pri-
vate social policies (quadrant 2). The difference
between these two outcomes can be attributed
to differences in either (a) the risk profile or
economic insecurity of the pivotal group or
(b) policy feedbacks, such as lag times or pol-
icy externalities, between programs.
By modeling individual preferences for dif-
ferent policies and the conditions leading to
3
Targeting
M+L
4
Universalism
M+
L
Policy feedbacks
&
Distribution of risks and income
Low High
2
Privatization
M+U
1
Contributory Insurance
M+
U
High
Low
Extractive capacity of the state
Figure 2
Extractive capacity of the state.
the formation of different political coalitions,
the theory sketched here provides more explicit
micro-foundations for macro-level outcomes.
As such, it complements earlier studies exam-
ining social policy reforms in developing coun-
tries, which have focused primarily on the po-
litical incentives or ideational beliefs of elites. It
also highlights the effect of seemingly small dif-
ferences in institutional design on the political
incentives of actors. The observation that “pol-
icy feedbacks” have different consequences for
policy outcomes was initially developed by his-
torical institutionalist scholars (Skocpol 1992,
Pierson 1994). This research shows that policy
feedbacks have lasting political consequences.
On the one hand, they create incentives for
pivotal groups to defect from the policy sta-
tus quo. On the other hand, they generate self-
enforcing political equilibria around new poli-
cies and contribute to the formation of different
political alliances. This suggests that the study
of the recent dynamics of social policy reform
in developing countries is an area of research
where insights of historical and rational choice
institutionalism can be fruitfully integrated.
CONCLUSION
We have written elsewhere of the need for
“research on social policy to become more
unequivocally comparative in its orientation”
(Carnes & Mares 2007, p. 882), and here we
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have pointed out some of the insights gained
from studying the social insurance programs
of developing countries. This has allowed us
to observe greater variation in social policy
outcomes—both across countries and regions,
and across policy areas within individual coun-
try cases—as well as a wider range of values on
the independent variables that are most studied
in the literature.
In this article, we have explored three
ongoing areas of research on the social policies
of developing countries. The first concerns
the political origin of social programs. In
many developing countries, social policies
have originated under authoritarian regimes.
The large variation in the scope of these
programs and the level of benefits is, so far,
unaccounted for by existing studies. We have
proposed a political explanation for these
policies that is based on the strategies pursued
by authoritarian leaders in their struggle with
the political organizations that brought them
to power. A second exciting area of research
explores the linkages between developmental
strategies pursued by various countries and
their social policy regimes. In examining this
recent literature, we have argued that a better
specification of the social policy preferences of
relevant political actors is needed to provide
a stronger micro-foundation for the observed
macro-level regularities. A third direction is
the study of recent developments in social
policies. We have demonstrated the existence
of significant variation across policy areas in
the trajectories and distributional implications
of social policies in many developing countries,
and we have proposed an explanation for these
outcomes that identifies the different political
coalitions supporting these policies. Their size
and their political composition are, in turn,
affected by broader institutional factors and by
the underlying distribution of income and risk.
The study of social policy in develop-
ing countries presents one of the most excit-
ing research agendas in comparative political
economy. Better data and more sophisticated
research methods now allow us to untangle as-
pects of policy design and distributional con-
sequences that could not have been detected
earlier. Yet many very basic questions are still
in need of systematic analysis and explanation.
This growing line of study promises not only
to give insights regarding a new class of cases—
developing countries—but also to enrich our
understanding of important aspects of social
policy around the world. In the current world
context, the ability to adapt economically is
crucial. Policies of risk reduction and allevia-
tion have never been more central to political
life.
DISCLOSURE STATEMENT
The authors are not aware of any affiliations, memberships, funding, or financial holdings that
might be perceived as affecting the objectivity of this review.
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Annual Review of
Political Science
Volume 12, 2009
Contents
A Conversation with Robert A. Dahl
Robert A. Dahl and Margaret Levi ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp1
Neorepublicanism: A Normative and Institutional Research Program
Frank Lovett and Philip Pettit ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp11
Domestic Terrorism: The Hidden Side of Political Violence
Ignacio Sánchez-Cuenca and Luis de la Calle pppppppppppppppppppppppppppppppppppppppppppppppp31
Women in Parliaments: Descriptive and Substantive Representation
Lena Wängnerud pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp51
Self-Government in Our Times
Adam Przeworski pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp71
Social Policy in Developing Countries
Isabela Mares and Matthew E. Carnes ppppppppppppppppppppppppppppppppppppppppppppppppppppppp93
Variation in Institutional Strength
Steven Levitsky and María Victoria Murillo pppppppppppppppppppppppppppppppppppppppppppppp115
Quality of Government: What You Get
Sören Holmberg, Bo Rothstein, and Naghmeh Nasiritousi pppppppppppppppppppppppppppppppp135
Democratization and Economic Globalization
Helen V. Milner and Bumba Mukherjee ppppppppppppppppppppppppppppppppppppppppppppppppppp163
Has the Study of Global Politics Found Religion?
Daniel Philpott pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp183
Redistricting: Reading Between the Lines
Raymond La Raja ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp203
Does Efficiency Shape the Territorial Structure of Government?
Liesbet Hooghe and Gary Marks ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp225
Bargaining Failures and Civil War
Barbara F. Walter ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp243
Hobbesian Hierarchy: The Political Economy of Political
Organization
David A. Lake ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp263
v
Annu. Rev. Polit. Sci. 2009.12:93-113. Downloaded from arjournals.annualreviews.org
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AR377-FM ARI 7 April 2009 11:25
Negative Campaigning
Richard R. Lau and Ivy Brown Rovner pppppppppppppppppppppppppppppppppppppppppppppppppppp285
The Institutional Origins of Inequality in Sub-Saharan Africa
Nicolas van de Walle ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp307
Riots
Steven I. Wilkinson pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp329
Regimes and the Rule of Law: Judicial Independence in Comparative
Perspective
Gretchen Helmke and Frances Rosenbluth ppppppppppppppppppppppppppppppppppppppppppppppppp345
Field Experiments and the Political Economy of Development
Macartan Humphreys and Jeremy M. Weinstein ppppppppppppppppppppppppppppppppppppppppp367
Laboratory Experiments in Political Economy
Thomas R. Palfrey ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp379
Field Experiments on Political Behavior and Collective Action
Eline A. de Rooij, Donald P. Green, and Alan S. Gerber ppppppppppppppppppppppppppppppppp389
Experiments on Racial Priming in Political Campaigns
Vincent L. Hutchings and Ashley E. Jardina pppppppppppppppppppppppppppppppppppppppppppppp397
Elections Under Authoritarianism
Jennifer Gandhi and Ellen Lust-Okar ppppppppppppppppppppppppppppppppppppppppppppppppppppp403
On Assessing the Political Effects of Racial Prejudice
Leonie Huddy and Stanley Feldman pppppppppppppppppppppppppppppppppppppppppppppppppppppppp423
A “Second Coming”? The Return of German Political Theory
Dana Villa ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp449
Group Membership, Group Identity, and Group Consciousness:
Measures of Racial Identity in American Politics?
Paula D. McClain, Jessica D. Johnson Carew, Eugene Walton, Jr.,
and Candis S. Watts ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp471
Opiates for the Matches: Matching Methods for Causal Inference
Jasjeet Sekhon pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp487
Indexes
Cumulative Index of Contributing Authors, Volumes 8–12 ppppppppppppppppppppppppppppp509
Cumulative Index of Chapter Titles, Volumes 8–12 ppppppppppppppppppppppppppppppppppppp511
Errata
An online log of corrections to Annual Review of Political Science articles may be found
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Annu. Rev. Polit. Sci. 2009.12:93-113. Downloaded from arjournals.annualreviews.org
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... Rothstein and Teorell (2008) have argued that an impartial and noncorrupt government administration is a precondition for citizens' willingness to support public efforts in the social realm. Moreover, as argued by Mares and Carnes (2009), initiatives in this area may be a function of the extractive capacity of the state, as it increases the state's ability to ensure the funding of social programmes. ...
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This is an article about the foundations of human well-being. It makes two integrated contributions. We first examine well-being around the contemporary world, finding a remarkable correlation between subjective and objective measures and a considerable variation in overall well-being among countries. We then argue that certain institutional conditions have laid the basis for these differences. Integrating insights from several research strands, we outline a new explanatory model of popular well-being that considers the interactions between three institutional provisions: a well-functioning democracy, advanced state capacity, and an encompassing social protection system. To test the relationships implied, we used a new dataset involving more than 100 countries in the contemporary world that extends six decades back in time. Our investigations indicated that all three factors play a role in promoting popular well-being. However, to understand how, we need to consider the ways in which they can complement, substitute and mutually reinforce each other.
... 17 This is not to dismiss the role of self-interest, especially among elites, in welfare provision. Mares' and Carnes' (2009) review concluded that social insurance schemes in developing countries have been mainly introduced by authoritarian regimes facing the need to sustain their rule. Clientelistic social assistance in low and middle income countries is longstanding (Stokes, 2004). ...
... Also, developing countries may have fewer social welfare programs to assist the poor in accessing health care. 66 In our systematic review and analysis, twice as many studies were from developed countries compared to developing studies (20 vs 9). ...
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Purpose: The purpose of this systematic review and quantitative analysis of pooled data was to assess the global incidence of pressure injury (PI), across time frames and countries, in individuals with spinal cord injury (SCI). Design: Systematic review and meta-analysis. Search strategy: PubMed, Web of Science, and EMBASE databases were systematically searched for studies published from database inception to January 2019, with only English language studies that reported the incidence of PIs in individuals with SCI were included. Study quality was assessed by a 14-item standardized checklist. We calculated the incidence of PIs as the number of new PIs in individuals with SCI and the total number of individuals with SCI during the study period. Findings are presented as incidence rate with 95% confidence intervals (CIs). Results: The search yielded 1652 studies; after studies were reviewed for inclusion criteria, 29 studies representing N = 82,722 patients were retained for data extraction. The global incidence of PIs was 0.23 (95% CI, 0.20-0.26). Data for regional distribution by country showed a pooled incidence of 0.43 (95% CI, 0.28-0.57) in individuals with SCI in South American countries, 0.36 (95% CI, 0.16-0.56) in African countries, 0.25 (95% CI, 0.14-0.37) in European countries, 0.23 (95% CI, 0.19-0.27) in North American countries, and 0.16 (95% CI, 0.06-0.25) in Asian countries. The incidence was 0.22 (95% CI, 0.19-0.26) in developing countries versus 0.27 (95% CI, 0.17-0.37) in developed countries. From 2000 to 2009, the incidence of PIs in individuals with SCI was 0.28 (95% CI, 0.09-0.47). The incidence rate of PIs before 2000 and after 2009 was 0.23. The hospital- and community-acquired PI incidence was 0.22 (95% CI, 0.19-0.26) and 0.26 (95% CI, 0.20-0.32), respectively. Conclusions: Study findings indicate that more than 1 in 5 individuals with SCI will develop a PI. Individuals with SCI are at high risk of developing PI, especially in community settings or low- and middle-income developing countries. The findings highlight the importance of further investigation of risk factors and prevention and management strategies for PIs in individuals with SCI.
... For instance, the private pillar in the pension system was adopted in the 2000s in countries such as Chile, Mexico and Uruguay, with varied proportions of public to private (Mares & Carnes, 2009). In East Asia, countries such as Korea and Malaysia also expect a fast-expanding private market in social services (Gough, 2001). ...
Thesis
Far from acting defensively to preserve the social relations and red ideologies that originally gave it power, the Chinese Communist Party is leading a social and economic transformation that could be expected to lead to direct challenges to its authority. The surprising degree of change in the Chinese socio-economic transformation and the fact that this transformation has been going on for forty years now and has not yet resulted in fundamental challenges subverting its rule have inspired my study. The overarching theoretical enquiry in my dissertation resonates with one of the most important theoretical questions in political sociology: how does the state maintain compliance from the governed in periods of rapid social and economic transformation, and how does the logic of its governmentality change along with its priorities? My work is built on the Weberian and Gramscian tradition of understanding state rule and highlights the individual’s rationale of “believing” and “consent”, but also takes account of the Foucaudian “governmentality” the state uses to maintain its rule and investigates the underlined rationality. Empirically, I take advantage of the pension changes among China’s social welfare reforms, decipher a two-way story of statecraft in authoritarian regimes and explore whether there may be room for cognitional counter-conduct from the public. My work demonstrates that the Chinese state works through benefit allocation, propaganda, experimentation with policy and many other approaches, in order to shape public expectations and justify its rule. However, the state’s well-designed statecraft needs to enable individuals to make sense of their experience and must resonate with their “common sense”. Individuals can update their knowledge from personal interest, information from government policies, signals from current society (their peers) to decide whether to stay loyal or choose non-compliance. In a situation when active counter-conduct such as resistance is not possible, individuals may choose cognitional rebellion and falsify their public compliance.
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This article reviews the literature on the causes of welfare state expansion in democratic middle-income countries across the Global South since the 2000s. After discussing challenges to measuring welfare state change, the article reviews research in political science and sociology and discusses nine potential causes of recent welfare state expansion , namely (a) economic development, (b) fiscal capacity, (c) democracy, (d) partisan ideology, (e) labour unions, (f) social mobilization, (g) cultural homogeneity, (h) institutional architecture, as well as (i) welfare rights and norms. The review thus reveals that recent welfare state expansion in democratic middle-income countries has been driven by a similar set of causes as postwar welfare state expansion in the Global North. The pronounced expansion of non-contributory social policies has, in some contrast, also been characterized by more bipartisan and transnational political dynamics. The article concludes by outlining avenues for future research and by calling for more scholarly attention to the consolidation and testing of existing theories.
Article
Autocratic elections occur on uneven playing fields, yet their regular contestation compels ruling parties to pay attention to citizens’ demands. This claim is at the heart of research linking multiparty elections in autocracies to improvements in human development. Recent work, however, casts doubt on the theoretical and empirical basis of such claims. This paper addresses this debate by focusing specifically on the adoption of social assistance programs, an often theorized but seldom examined link in the chain connecting electoral autocracy with improvements in human development. I demonstrate that electoral autocracies are more likely to adopt these programs than closed autocracies and that the impact largely works through within-country changes in the presence of electoral authoritarianism. The results are consistent with the argument that such regimes are more responsive to citizens’ demands. However, they also remind researchers that the goal of such regimes is to win elections; there is little preventing them from crafting targeted social policies that secure the loyalty of the voting public but without the attendant improvements in broad measures of human development. I conclude with suggestions for how future research can better understand how authoritarian governance shapes development outcomes.
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This study analyzes how political leaders’ material backgrounds affect redistributive policies in democracies. Building on political socialization theory, we argue that politicians with personal experience of economic hardship are more likely to have sympathetic attitudes toward redistribution than those without such experience, particularly where political constraints are weak. We posit that firsthand knowledge of economic hardship helps political leaders understand why the poor need government redistribution, and leads them to support more generous social welfare policies. Analyzing an original dataset of leaders’ material background in 74 democratic countries between 1980 and 2011, we find that leaders who experienced economic hardship in their youth increase social welfare spending during their tenure, particularly when political constraints are weak. Following prior studies on leaders’ personal experiences and policy outcomes, this study provides a new approach to redistribution and welfare policy.
Article
The evolution of public social expenditures displays divergent patterns across non‐western countries. This exploratory article argues that in order to understand the domestic sources of this divergence, institutional and structural explanations should be complemented with an actor‐oriented perspective. Analyses of the role of party politics in non‐OECD democracies, through multivariate fixed‐effect regressions using data from 46 countries between 1995 and 2015, reveals a robust positive association between shifts towards Left party government and increases in total public social expenditures, also when controlling for structural and institutional factors. This association however seems potentially conditional on sufficient levels of economic growth. While indicating an impact of partisanship, further research is arguably needed regarding the origins, organization and policy outputs of parties in more recently democratized countries, as well as regarding the conditions under which the ideological orientation of parties in government are actually consequential.
Conference Paper
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This paper studies how partisan politics influences the distribution of social expenditures—particularly in social security and welfare (SSW) and education—in regional governments of South Korea from 2002 to 2015. Since democratization in 1987, South Korea has decentralized its political and financial system to promote equal and efficient distribution of national resources across regions. In this paper we argue that partisan interests of the central and regional governments strongly influence social expenditures in regional governments and thus result in an unequal distribution of social services across regions. Our empirical analysis first shows that the central government transfers larger subsides to regional governments whose chief executives (governors or mayors) have the same partisan affiliation as that of the incumbent national government party. The regional governments with larger subsidy transfers have greater fiscal room and thus spend more on social programs for their local residents. Second, the partisan preferences of the heads of regional governments are significantly associated with the allocation of social expenditures in regions. Governors or majors affiliated with the centrist (liberal) party (Saejeongchi minju yeonhap or The New Politics Alliance for Democracy: NPAD), which supports universal social welfare, tend to spend significantly more on social security, welfare and education than those affiliated with the conservative party (Saenuri-dang or The New Frontier Party: NFP), which endorses selective social welfare.
Article
This book is one of the first attempts to analyze how developing countries through the early twenty-first century have established systems of social protection (i.e. pension and poverty programs, and public health and education systems) and how these systems have been affected by the recent processes of globalization (i.e. greater exposure to international trade and capital markets) and democratization. The book focuses on Latin American - a pioneer in social policies in the developing world - to identify factors associated with the evolution of welfare state policies during the pre-globalization period (1920-1979), and studies how globalization and democratization in the last 25 years have affected governments' fiscal commitment to social spending. © Alex Segura-Ubiergo 2007 and Cambridge University Press, 2009.
Book
Social security institutions have been among the most stable post-war social programs around the world. Increasingly, however, these institutions have undergone profound transformation from public risk-pooling systems to individual market-based designs. Why has this ‘privatization’ occurred? Why do some governments enact more radical pension privatizations than others? This book provides a theoretical and empirical account of when and to what degree governments privatize national old-age pension systems. Quantitative cross-national analysis simulates the degree of pension privatization around the world and tests competing hypotheses to explain reform outcomes. In addition, comparative analysis of pension reforms in Argentina, Brazil, Mexico and Uruguay evaluate a causal theory of institutional change. The central argument is that pension privatization emerges from political conflict, rather than from exogenous pressures. The argument is developed around three dimensions: the double bind of globalization, contingent path-dependent processes, and the legislative politics of loss imposition.
Article
This article develops and tests a political model specifying the conditions under which external risk leads to the introduction of redistributive social policies and argues that external risk sharpens a domestic political cleavage over the design of institutions of social insurance. Workers in sectors facing high volatility of income will support the introduction of social policies characterized by broad levels of insurance coverage and high redistribution of costs across occupations, whereas workers in low-risk sectors will oppose redistributive social policies. The strength of preexisting state institutions also affects policy preferences of various sectors. In the presence of weak, ineffective states that are unable to collect social insurance contributions from sectors that are net contributors to the system, high-risk sectors will find redistributive social policies unattractive. The article tests predictions of the model using new measures of the level of social insurance coverage in more than 100 countries.
Article
Acknowledgments Abbreviations Introduction 1. The origins of the solidaristic welfare state: Scandinavia 2. The triumph of the solidaristic welfare state: Britain and Scandinavia 3. The failure of the solidaristic welfare state: France and Germany 4. From Beveridge back to Bismarck: the superannuation issue 5. Solidarity by the back door Conclusion Bibliography Index.
Article
Despite considerable normative support, analysts have failed to identify any systematic effects of democracy on domestic policy outputs. Building on a theory of the state as a monopoly producer of public services and establishing a common foundation for studying variations in regimes and their policy consequences, the authors hypothesize that democratic states will earn fewer monopoly rents and produce a higher level of services than autocracies. They test this hypothesis both cross-sectionally and over time for a variety of public health and education indicators. The statistical results strongly support their hypotheses. The authors conclude that democracy has real, substantively important effects on the daily lives and well-being of individuals around the globe.