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Targeted transfers, a left-wing policy? The impact of left-wing governments and corporatism on transfers to low-income families (1982–2019)
Abstract
In the last decades, several countries introduced new income-tested child benefits and targeted in-work tax credits to boost the income of low-income families. Inspired by the power resource theory, I postulate that left-wing governments tend to increase benefits to low-income families because their ideology favours redistribution and to consolidate the vote of low-income families, but that both right- and left-wing governments increase benefits for middle-income families. The impact of left-wing governments should be stronger in countries with a weak bargaining system as social partners are unable to reduce inequalities between families. To demonstrate this argument, I use statistical analyses based on OECD data to measure the effect of government ideology and corporatism on the level of benefits received by low- and middle-income families in OECD countries from 1982 to 2019. The results indicate that left-wing parties have a significant impact on benefits received by low-income families, but not on benefits received by middle-income families. Also, even though corporatism is associated with different types of child benefits, it does not influence the relationship between left-wing governments and benefits received by low-income families.
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Social investment has recently received much attention among policy-makers and welfare state scholars, but the existing literature remains focused on policy-making on the macro level. We expand this perspective by studying public opinion towards social investment compared to other welfare policies, exploiting new public opinion data from eight European countries. We identify three latent dimensions of welfare state preferences: ‘social investment’; ‘passive transfers’; and ‘workfare’ policies. We find that social investment is far more popular compared to the other two. Furthermore, we identify distinct supporting groups: passive transfer policies are most supported by low-income, low-educated people, by individuals leaning towards traditional social values and by those subscribing to left-wing economic attitudes. Social investment policies are supported by a broad coalition of individuals with higher educational backgrounds and left-libertarian views from all economic strata. Workfare policies are most popular with high-income individuals and those subscribing to economically conservative and traditional authoritarian values.
Welfare states have been subject to a subtle and a sometimes-unrecognized transformation: the fiscalization of social benefits. This change of national policy is notable in the area of family policy, where various forms of child tax benefits have been introduced. The composition and level of child benefits varies therefore not only across countries, but also over historical time (Kamerman and Kahn, 1981; MacNicol, 1992; Wennemo, 1994; Gauthier, 1996). In the immediate Post-World War II period many countries either complemented or replaced various types of income-tested child benefits with universal ones, introducing a shift in the distributive profile of the system. However, far from all welfare states relied only on the principle of universalism in the design of child benefits. Child tax benefits and fiscal policy has often been used as an alternative or complement to social policy legislation. During the era of welfare state stagnation and decline since the mid-1970s some countries have relocated parts of the child benefit package from social policy to the income tax system. During this process of fiscalization, elements of income-testing have once again been introduced to child benefits, thus adding stronger elements of vertical redistribution between socio- economic groups. The change of scenery not only involves a shift in the relative emphasis of social and fiscal policies in the redistributive budgets of the European countries, but also a greater degree of selectivity and low-income targeting is introduced to the provision of child benefits.
In this article, it is assumed that corporatism consists of various types of institutional arrangements whereby important political-economic decisions are reached via negotiation between, or in consultation with, peak-level representatives of employees and employers (or other interest groups and the state). The article offers an overview of the forty-two prominent or useful indicators of corporatism suggested in the literature. All these indicators are compared, and the correlations among them are examined. The results produced by the various measures in a set of otherwise identical regression analyses of the relationship between corporatism and unemployment show the sensitivity of empirical findings in this field. Students of corporatism have not always paid sufficient attention to the impact of indicator choice on empirical results.
Revisiting Pierson’s Work on the Politics of Welfare State Reform in the Era of Retrenchment Twenty Years Later - Volume 48 Issue 2 - John D. Stephens
Measuring the power of the political left with the ‘share of social democratic cabinet seats’ is the gold standard in the literature on partisan effects. We argue that this measure of left power suffers from conceptual ambiguity and propose an alternative approach to measure the ideological orientation of governments based on their power in cabinets and data on party positions. We see several shortcomings of the traditional measure: the social democratic cabinet share neglects the fact that parties’ ideological profiles differ across countries and have significantly changed over recent decades. Also, specific policy measures of party preferences are often more appropriate to gauge the government’s position than relying on highly aggregated left/right measures. In addition, the social democratic cabinet share does not take into account the impact of coalition partners, cabinet decision making and the possibility of minority governments relying on parliamentary support outside the cabinet on the ability of parties to implement the social policies. After discussing the reasons for the conceptual ambiguity of existing indicators for the power of the left, we present alternative measures for the ideological orientation of the government based on the composition of cabinets and different information about party positions. We demonstrate how these measures can be combined to a single indicator that takes into account both the ideological position of governing parties in a particular policy domain and their power to affect cabinet decisions. We critically discuss the availability and merits of data on party positions and cabinet compositions and provide recommendations for constructing measures in welfare state research.
Countries that share a particular social protection system, of Bismarckian inspiration and based on social insurance, seem to encounter similar and particularly awkward difficulties. They also seem to be following parallel trends in reforms, with respect to both their timing and their content and process. This paper is an attempt to compare the development of Bismarckian welfare systems during the last 25 years, showing the common pattern of reform.
In most OECD countries, the gap between rich and poor has widened over the past decades. The present study analysed whether and to what extent direct taxes and social transfers contribute to this trend. The study contributes to the literature by disentangling several parts of fiscal redistribution in a comparative setting. We used micro-data from the Luxembourg Income Study to examine household market inequality and redistribution from transfers and taxes for 20 countries from the mid-1980s to the mid-2000s. The contribution of each programme was estimated using a sequential accounting budget incidence decomposition technique. We observed a sizeable increase in primary household inequality, but tax-benefit systems have offset two thirds of the average increase in primary income inequality. The public old-age pensions attributed 60 per cent to the increase in redistribution, while social assistance accounted for 20 per cent. Direct taxes slowed down redistribution by 16 per cent.
Through a pooled cross-section time-series analysis of the determinants of wage inequality in sixteen OECD countries from 1973 to 1995, we explore how political-institutional variables affect the upper and lower halves of the wage distribution. Our regression results indicate that unionization, centralization of wage bargaining and public-sector employment primarily affect the distribution of wages by boosting the relative position of unskilled workers, while the egalitarian effects of Left government operate at the upper end of the wage hierarchy, holding back the wage growth of well-paid workers. Further analysis shows that the differential effects of government partisanship are contingent on wage-bargaining centralization: in decentralized bargaining systems, Left government is associated with compression of both halves of the wage distribution.
The literature on the determinants of welfare state effort displays many inconsistencies and contradictions. This article takes important steps toward resolving these issues with the use of pooled cross-sectional and time-series analyses. The findings are that various independent variables affect different measures of welfare state effort in different and theoretically meaningful ways. Of special importance are the contrasting effects of Christian democracy and social democracy on transfer payments, social benefits expenditure, and total government revenue. There is also a strong effect of constitutional structure on welfare state effort, a finding that provides the first solid support for the state-centered perspective in a quantitative analysis.
In this article we evaluate two claims made in recent studies of the welfare states of advanced industrial societies: first, that welfare states have remained quite resilient in the face of demands for retrenchment; and second, that partisan politics have ceased to play a decisive role in their evolution. Addressing the first claim, we present analysis from a new data set on unemployment insurance and sickness benefit replacement rates for 18 countries for the years 1975-99. We find considerably more evidence of welfare retrenchment during the last two decades than do recent cross-national studies. Second, we examine the "end of partisanship" claim by estimating the effects of government partisanship on changes in income replacement rates in sickness and unemployment programs. Our results suggest that, contrary to claims that partisanship has little impact on welfare state commitments, traditional partisanship continues to have a considerable effect on welfare state entitlements in the era of retrenchment.
This article challenges Fixed Effects (FE) modeling as the ‘default’ for time-series-cross-sectional and panel data. Understanding different within and between effects is crucial when choosing modeling strategies. The downside of Random Effects (RE) modeling— correlated lower-level covariates and higher-level residuals—is omitted-variable bias, solvable with Mundlak’s (1978a) formulation. Consequently, RE can provide everything that FE promises and more, as confirmed by Monte-Carlo simulations, which additionally show problems with Pluemper and Troeger’s FE Vector Decomposition method when data are unbalanced. As well as incorporating time-invariant variables, RE models are readily extendable, with random coefficients, cross-level interactions and complex variance functions. In the appendix, an empirical example shows that disregarding these extensions can produce misleading results. We argue not simply for technical solutions to endogeneity, but for the substantive importance of context/heterogeneity, modeled using RE. The implications extend beyond political science to all multilevel datasets. However, omitted variables could still bias estimated higher-level variable effects; as with any model, care is required in interpretation.
See also subsequent publication https://www.researchgate.net/publication/299604336_Fixed_and_Random_effects_models_making_an_informed_choice
English
Current socioeconomic transformations that have brought into existence postindustrial labour market and family structures are generating new social needs and demands, labelled new social risks (NSRs). These include reconciling work and family life, lone parenthood, long-term unemployment, being among the working poor, or having insufficient social security coverage. These new risks tend to be concentrated among women, the young and the low skilled. This article shows that these groups have little mobilising capacity and that if policies covering their needs are to be adopted, this is likely to happen as a result of alliances and political exchange with other political actors pursuing different policy objectives.
This essay explores the possibilities and limits of partisan influence on public policy in democratic nations. It will be pointed out, that differences in party composition of government, in general, matter in public policy in constitutional democracy. However, the extent to which parties influence public policy is to a significant extent contingent upon the type of democracy and countermajoritarian institutional constraints of central state government. Large partisan effects typify majoritarian democracies and states, in which the legislature and the executive are ‘sovereign’. More complex and more difficult to identify is the partisan influence on public policy in consensus democracies and in states, in which the political-institutional circumstances allow for co-governance of the opposition party. Narrowly circumscribed is the room to manoeuvre available to incumbent parties above all in political systems which have been marked by countermajoritarian institutional pluralism or institutional ‘semi-sovereignty’. The article suggests, that it would be valuable if direct effects and interaction effects of the party composition of government and state structures featured more prominently in future research on comparative public policy.
To comprehend how the welfare state adjusts to economic shocks it is important to get a handle on both the genesis of popular
preferences and the institutional incentives for governments to respond to these preferences. This paper attempts to do both,
using a general theoretical framework and detailed data at both the individual and national levels. In a first step, we focus
on how risk exposure and income are related to preferences for redistribution. To test our hypotheses, we extract detailed
risk-exposure measures from labour-force surveys and marry them to cross-national opinion survey data. Results from analysis
of these data attest to the great importance of risks within the labour market in shaping popular preferences for redistributive
efforts by governments. In a second step, we turn our attention to the supply side of government redistribution. Institutions,
we argue, mediate governments' reactions to redistributional demands following economic shocks. Using time-series cross-country
data, we demonstrate how national training systems, and electoral institutions, as well as partisanship, shape government
responses.
We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 financial crisis. In addition to widely used VaR and ES models, we also study the behavior of conditional and unconditional extreme value (EV) models to generate 99 percent confidence level estimates as well as developing a new loss function that relates tail losses to ES forecasts. Backtesting results show that only our proposed new hybrid and Extreme Value (EV)-based VaR models provide adequate protection in both developed and emerging markets, but that the hybrid approach does this at a significantly lower cost in capital reserves. In ES estimation the hybrid model yields the smallest error statistics surpassing even the EV models, especially in the developed markets.
Applying the new economics of organization and relational theories of the firm to the problem of understanding cross‐national variation in the political economy, this volume elaborates a new understanding of the institutional differences that characterize the ‘varieties of capitalism’ found among the developed economies. Building on a distinction between ‘liberal market economies’ and ‘coordinated market economies’, it explores the impact of these variations on economic performance and many spheres of policy‐making, including macroeconomic policy, social policy, vocational training, legal decision‐making, and international economic negotiations. The volume examines the institutional complementarities across spheres of the political economy, including labour markets, markets for corporate finance, the system of skill formation, and inter‐firm collaboration on research and development that reinforce national equilibria and give rise to comparative institutional advantages, notably in the sphere of innovation where LMEs are better placed to sponsor radical innovation and CMEs to sponsor incremental innovation. By linking managerial strategy to national institutions, the volume builds a firm‐centred comparative political economy that can be used to assess the response of firms and governments to the pressures associated with globalization. Its new perspectives on the welfare state emphasize the role of business interests and of economic systems built on general or specific skills in the development of social policy. It explores the relationship between national legal systems, as well as systems of standards setting, and the political economy. The analysis has many implications for economic policy‐making, at national and international levels, in the global age.
Does government partisanship still matter in the era of welfare retrenchment? The comprehensive quantitative research on this question offers contradicting answers. Our meta-analysis demonstrates that the results of published empirical studies depend on a number of the studies’ characteristics. Focusing on studies on retrenchment-prone ‘old social policies’, we show that the single most important factor affecting the results on partisanship is the choice of the dependent variable. In general, studies using entitlements are four times more likely to find partisan effects than studies based on social spending. Furthermore, partisan effects are more pronounced in class-related programmes like unemployment benefits and sick pay than in lifecourse-related welfare programmes such as pensions. Finally, we show a clear decline of partisanship over time. Some recent studies, however, indicate that innovations in terms of operationalisation and measurement of the independent variable may bring new life to the debate on the persistence of partisanship.
Résumé
L'enjeu politique de la fixation du salaire minimum a été relativement peu étudié en science politique. Dans cet article, nous examinons le rôle des partis politiques de gauche sur la fixation du salaire minimum. Comme prédit par la théorie des ressources du pouvoir, les partis de gauche devraient encourager l'augmentation du salaire minimum. Nous postulons toutefois que cet effet diffère selon le niveau de corporatisme. Plus particulièrement, nous pensons que l'effet des partis politiques de gauche devrait être plus faible sous des niveaux de corporatisme élevés puisque les partenaires sociaux sont davantage consultés et que les gouvernements ont tendance à leur déléguer la régulation des salaires. Nos résultats confirment ces hypothèses. Ils indiquent que le salaire minimum tend à augmenter lorsque les gouvernements sont davantage à gauche idéologiquement et que cette relation est plus forte lorsque le degré de corporatisme est faible.
Quantitative analysis of the question whether ‘parties still matter’ has largely focused on the dynamics of aggregated expenditure-based dependent variables or protective welfare policies such as unemployment, sickness and family benefits. This article develops a series of pooled time-series cross-section regression specifications predicting changes in disaggregated protective welfare policies alongside productive welfare policies, namely family services, active labour market programmes and public education, across 17 Western democracies (1971–2010). In so doing, it employs the latest Comparative Manifesto Project [Volkens, A., P. Lehmann, N. Merz, S. Regel, and A. Werner. 2014. The Manifesto Data Collection. Manifesto Project (MRG/CMP/MARPOR). Version 2014b. Berlin: Wissenschaftszentrum Berlin für Sozialforschung (WZB). Accessed January 2015. https://manifestoproject.wzb.eu/information/information] and Veto Player [Jahn, D., T. Behm, N. Düpont, and C. Oberst. 2012. Parties, Institutions & Preferences: Veto Player (Annual), Version 2012–02. Accessed January 2015. http://comparativepolitics.uni-greifswald.de/data.html] data to explore the effect of the ideological position of prime ministers’ parties, veto players and their combined effect on these welfare policy areas. The article confirms that Left and Right governments ceased to make any substantive difference for protective welfare policies from the early 1980s onwards. Yet, it also finds that positive Left partisan effects have largely persisted for productive welfare policies. In the era of global competition, Left party ideology has continued to be an important factor in realising a social investment perspective in practice; in terms of the expansion of family services, its effects have been contingent on the veto power Left prime ministers faced.
Cluster-robust standard errors (as implemented by the eponymous cluster option in Stata) can produce misleading inferences when the number of clusters G is small, even if the model is consistent and there are many observations in each cluster. Nevertheless, political scientists commonly employ this method in data sets with few clusters. The contributions of this paper are: (a) developing new and easy-to-use Stata and R packages that implement alternative uncertainty measures robust to small G , and (b) explaining and providing evidence for the advantages of these alternatives, especially cluster-adjusted t -statistics based on Ibragimov and Müller. To illustrate these advantages, we reanalyze recent work where results are based on cluster-robust standard errors.
The paper attempts to determine whether parties of the left, when in government, spend more than parties of the right. It first reviews the theoretical literature and concludes that parties are likely to make a difference, but only a modest one. It then reviews previous empirical studies, which come out with conflicting results. It finally proposes a study that covers 15 liberal democracies over a period of 28 years, from 1960 to 1987. and combines longitudinal, cross-sectional, and pooled designs. The analysis shows that parties ot the left do spend a little more than parties of the right. The difference, however, emerges only for majority governments whose party composition remains unchanged over a number of years, an indication that it takes time for parties to affect total spending.
It is an indisputable reality that the English-speaking welfare states have retreated from their distinct postwar welfare state compromises in ways that prompt many to wonder what is still liberal about the liberal welfare states. Considering developments in minimum wage institutions and politics in five liberal welfare states, this article argues that the apparent renewed politicization of the minimum wage – driven by legislative action and activist campaigns from below – is an inevitable consequence of the twin policies of labour market deregulation and workfare-centred social policies. A larger electorate of low-paid workers, including those in full-time work, combined with rising concerns from the public about the extent and injustice of poverty wages are important factors drawing renewed attention to the politics and policy of minimum wages. However, I also show that policymakers have additional incentives to embrace higher minimum wages: the economic orthodoxy in favour of low minimum wages has steadily lost credibility, and legislating for wage increases enables a predistributive strategy with the potential to shift the burden of addressing inequalities from fiscally-strained governments to employers. Drawing on policy and political developments from across Australia, Canada, New Zealand, the UK and the USA, I make the claim that the politicization of minimum wages offers genuine insight into the future battles over what is ‘liberal’ about the liberal welfare states.
The long-voiced claim of a family wage became a reality in the form of generalized family support after the end of the Second World War. This support has two components: child benefits and support for a dependent spouse, and the marriage subsidy. From a gender-theoretical perspective the marriage subsidy is one of the political means to influence the balance of paid versus unpaid work. The development of the marriage subsidy in 18 OECD countries is here followed from 1950 to 1990 and is compared to the development of child benefits. Since the 1970s there has been a growing divergence among our countries with respect to the marriage subsidy. Reinforcement or gradual decrease of this policy is here taken to indicate a general political support for the single breadwinner family model or its opposite, the dual-earner family model. Empirical analyses indicate that partisan politics have been of relevance to the development of the different forms of family support. Since marriage subsidies predominantly take the form of tax allowances which are always regressive in character, the class dimension is here intermingled with the gender dimension, which may account for some of the unexpected results.
In longitudinal panels and other regression models with unobserved effects,
fixed effects estimation is often paired with cluster-robust variance
estimation (CRVE) in order to account for heteroskedasticity and un-modeled
dependence among the errors. CRVE is asymptotically consistent as the number of
independent clusters increases, but can be biased downward for sample sizes
often found in applied work, leading to hypothesis tests with overly liberal
rejection rates. One solution is to use bias-reduced linearization (BRL), which
corrects the CRVE so that it is unbiased under a working model, and t-tests
with Satterthwaite degrees of freedom. We propose a generalization of BRL that
can be applied in models with arbitrary sets of fixed effects, where the
original BRL method is undefined, and describe how to apply the method when the
regression is estimated after absorbing the fixed effects. We also propose a
small-sample test for multiple-parameter hypotheses, which generalizes the
Satterthwaite approximation for t-tests. In simulations covering a variety of
study designs, we find that conventional cluster-robust Wald tests can severely
under-reject while the proposed small-sample test maintains Type I error very
close to nominal levels.
In a recent survey of the welfare state impacts of political parties, Manfred Schmidt concludes (2010: 223): “…partisan theory remains a valuable tool in the comparative study of the welfare state in economically advanced democratic states…” Schmidt cites, among other evidence, clear programmatic differences in the early 2000s between social democratic and secular center-right parties on the issue of raising taxes to support enhanced social protection, the mode of welfare state finance, and the overall balance between state and market in the production of welfare.
One central result of macro-quantitative studies in comparative public policy is that the importance of partisan politics on policy outputs has strongly decreased in recent decades. This finding may well be a methodological artefact. I argue that ad hoc standards in panel data analysis, especially using country-years as periodization, create estimation problems which potentially influence results against partisan variables. Therefore, I propose a simple and straightforward, as well as theoretically suitable, alternative to test the influence of partisan politics on policies and use cabinets instead of country-years. Using comparative welfare state research as an example, I show that partisan effects are strong and stable when using a cabinet-based periodization and fragile and weak within the standard procedure based on annual data. This article aims at suggesting that annual periods do not need to be the best simplification of time in empirical analyses.
From 1987 to 2009, Irish social partnership operated as a national framework for industrial relations. The contribution of the article is twofold. We seek to link the institutional dynamics of social partnership with the Régulation School's notions of modes of accumulation and regimes of régulation. This framework is used to explain the rise and fall of social partnership in Ireland. We argue that the regime of social partnership in Ireland can be divided into two distinct periods. In the first, social partnership contributed positively to a benign productivity-led mode of accumulation. In the second, it lost its economic functionality due mostly to financialisation taking a grip in the Irish economy. The conclusion is that social partnership had both positive and negative features, but it is unlikely to be repeated in the foreseeable future, at least not in Ireland.
The central political claim of Three Worlds of Welfare Capitalism is that class actors, through the instruments of the democratic process, can modify capitalism. Where working-class mobilization is strong, left parties have sufficient electoral support in the political arena to alter markets politically in ways that decommodify and thereby empower workers. The decline of traditional class voting, however, has profoundly changed this dynamic of welfare politics. We show that the political support coalition for welfare states has been reconfigured through two processes. On the one hand, the Left may have lost support among the traditional working class, but it has substituted this decline by attracting substantial electoral support among specific parts of the expanding middle class. On the other hand, the welfare support coalition has been stabilized through increasing support for the welfare state among right-wing political parties. We discuss the possible consequences of this ‘middle-class shift’ in the welfare support coalition in terms of policy consequences.
In this chapter the focus is on the child benefit package for working families and its contribution to tackling in-work child poverty. Tackling child poverty is high on the European Union’s political agenda. It was a priority in the March 2006 European Council, a focus of many of the National Reports on Social Protection and Social Inclusion 2006–8, and the main work of the EU experts on the National Action Plans in 2007. An influential report by the Social Protection Committee (2008) reflected much of this effort and contained detailed comparative analysis of child poverty using the new European Union Statistics on Income and Living Conditions (EU-SILC) 2005. The report drew attention to the fact that in the majority of the EU member states, children are at a higher risk of poverty than the population as a whole. More recent analyses of the EU-SILC (Atkinson and Marlier, 2010; Tarki, 2010, 2011) confirmed this finding. As a part of its ten-year economic plan, the June 2010 European Council set the target to reduce poverty and social exclusion in the EU by 20 million (European Council, 2010). If this objective is to be achieved, parents and their children will need to be a key focus of anti-poverty policies.
Many economic and social surveys are designed as panel studies, which provide important data for describing social changes and testing causal relations between social phenomena. This textbook shows how to manage, describe, and model these kinds of data. It presents models for continuous and categorical dependent variables, focusing either on the level of these variables at different points in time or on their change over time. It covers fixed and random effects models, models for change scores and event history models. All statistical methods are explained in an application-centered style using research examples from scholarly journals, which can be replicated by the reader through data provided on the accompanying website. As all models are compared to each other, it provides valuable assistance with choosing the right model in applied research. The textbook is directed at master and doctoral students as well as applied researchers in the social sciences, psychology, business administration and economics. Readers should be familiar with linear regression and have a good understanding of ordinary least squares estimation.
The relevance of socioeconomic class and of class-related parties for policymaking is a recurring issue in the social sciences. The perspective holds that in the present era of austerity, class-based parties once driving welfare state expansion have been superseded by powerful new interest groups of welfare-state clients capable of largely resisting retrenchment pressures emanating from postindustrial forces. We argue that retrenchment can fruitfully be analyzed as distributive conflict involving a remaking of the early postwar social contract based on the full employment welfare state, a conflict in which partisan politics and welfare-state institutions are likely to matter. Pointing to problems of conceptualization and measurement of the dependent variable in previous research, we bring in new data on the extent of retrenchment in social citizenship rights and show that the long increase in social rights has been turned into a decline and that significant retrenchment has taken place in several countries. Our analyses demonstrate that partisan politics remains significant for retrenchment also when we take account of contextual indictors, such as constitutional veto points, economic factors, and globalization.
In the course of the postwar period, universal family support has been introduced in most industrialized nations. Governments may introduce such support in order to attain two policy objectives, raising fertility and increasing the economic well-being of families There have been two major types of universal support to families: different types of family tax reductions on the one hand and cash benefits on the other. In this paper, predictors of the growth of family benefit levels in these systems will be examined.
The results indicate that benefit levels are influenced by national political trends. Left party strength has a significant impact on the level of cash benefits, but a weak negative one on tax reductions, the latter type of benefit being more advantageous for earners of high incomes. Religious party strength also has a rather strong influence on family support. In contrast, measures linked to modernization and industrialization do not exercise any strong effect on the extension of family support. Neither measures of economic development nor fertility demonstrate any consistent impact on benefit levels.
The distribution of pay differs significantly across countries and over time among advanced industrial societies. In this paper, institutional and political determinants of pay inequality an studied in sixteen countries from 1980 to 1992. The most important factor in explaining pay dispersion is the level of wage-setting, i.e., whether wages are set at the level of the individual, the plant, the industry, or the entire private sector. The impact of centralization is the same whether centralization occurs via collective bargaining or via government involvement in private-sector wage-setting. The concentration of unions and the share of the labor force covered by collective bargaining agreements also matter. After controlling for wage-setting institutions, other variables such as the governing coalition, the size of government, international openness, and the supply of highly educated workers have little impact. Economic, political, and norm-based explanations for the association of centralization with egalitarian outcomes are discussed.
We examine the roles of democratic politics and political institutions in shaping social welfare spending in 18 contemporary capitalist democracies. We explore the social spending consequences of government partisanship, electoral competition and turnout, and the self-interested behaviors of politicians and bureaucrats, as well as such relatively durable facets of political institutions as neocorporatism, state centralization, and traditionalist policy legacies. Pooled time series analyses of welfare effort in 18 nations during the 1960–82 period show that electoral turnout, as well as left and center governments increase welfare effort; that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional (and junior coalitional) parties; and that relatively neocorporatist, centralized, and traditionalistic polities are high on welfare effort. Overall, our findings suggest that contrary to many claims, both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort.
Welfare state retrenchment is widely seen as a highly unpopular endeavour and, therefore, as politically difficult to pursue. This assumption has underpinned most of the political science research on this issue, notably Paul Pierson's seminal contributions about the 'new politics of the welfare state'. Yet, the question remains why and under what circumstances cutbacks take place in highly developed welfare states despite these formidable political obstacles. This article reviews the literature on the politics of retrenchment, namely on the impact of socio- economic problem pressure, political parties, political institutions, welfare state structures and ideas. Most authors agree that socio-economic problems - particularly domestic problems - contribute to an atmosphere of 'permanent austerity' which inspires cutbacks. Moreover, according to most scholars, the extent of retrenchment possible depends on the specific institutional configuration of a political system and the path dependence of existing welfare state structures. The debate on the relevance of political parties and ideas, by contrast, is still far from settled. Further unresolved issues include the nature of the dependent variable in retrenchment studies. Also, the exact motives for cutbacks are theoretically still little understood, as are the political mechanisms through which they are realized. I argue that, because of the nature of these persisting issues, the pluralistic dialogue between different methods and approaches - as well as their combination - remains the most promising way forward in the study of welfare state politics.
English
Social policy communities now often focus on ‘new social risks’. Despite a clear preference for controlling state spending, they also consider that these risks call for ‘social investments’. Concentration on investments, activation and the future is considered an optimal anchor for redesigning their welfare systems. Convergence around three ideas prompt us to speak of a shift towards a LEGO TM paradigm: learning over the life-course; a future orientation; and the collective benefits of an active society. Just as when Keynesianism was paradigmatic, however, we recognise that divergences exist in the ways that the paradigm is implemented.
The article introduces the distinction between labour market- and life course-related social programmes and discusses why it matters politically. Life course risks are by and large uncorrelated with the income distribution, so the median voter will be comparably favourable towards generous provision. Left- and right-wing governments will therefore enact similar policies, and constitutional veto points will play no role for provision because no political actors will use them to block change. The median voter is less favourable towards labour market-related programmes that protect against risks that first and foremost adversely affect low-income individuals. Right-wing governments therefore have greater leeway to implement retrenchment on labour market-related programmes. Yet, in the event of external shocks to the labour market like rising unemployment and globalization, the median voter becomes gradually more exposed to labour market risks, which in turn reduces the room for right-wing retrenchment.
A novel theory of the healthcare policy of right-wing governments is presented in this article. It posits that the politics of health care is inherently different from the politics of a social policy related to the labour market. Health care protects against risks that are in the main uncorrelated with the income distribution. This implies that median voters will favour public provision, while high-income voters will not. This generates a unique challenge to right-wing governments that have to balance the interests of the two. The solution is marketization via compensation, where public spending is expanded but where public support of private market solutions is given special priority.
The shape and aggregate output of welfare states within many developed democracies have been fairly resilient in the face of profound shifts in their national settings, and with respect to the global environment of the past 20 years. This contrasts with once-widespread predictions of universal retrenchment, and it has broadened debates over trends in social policymaking to focus on the phenomenon of welfare state persistence. Research on persistence has not, to date, directly considered the possibility that welfare states survive because of enduring popular support. Building from recent welfare state theory and the emerging literature on policy responsiveness, we consider the possibility that mass public opinion—citizens’ aggregate policy preferences—are a factor behind welfare state persistence. We analyze a new country-level data set, controlling for established sources of welfare state development, and buttressing estimates by testing for endogeneity with respect to policy preferences. We find evidence that the temporal distribution of policy preferences has contributed to persistence tendencies in a number of welfare states. We discuss results in conclusion, suggesting the utility of further consideration of linkages between mass opinion and social policy in cross-national perspective.
- OECD