Public Sector Growth & Rise of the Welfare State

Question 1

Empirical evidence to support PRT of early welfare state development

Answer 1

Korpi (1989)

Across 18 OECD countries from 1930 onwards, left participation in government = important factor in development of sickness insurance

Question 2

Example (contrary to PRT) of welfare state shaped by middle-class interests

Answer 2

Baldwin (1990)

Unique features of Nordic welfare states shaped by interests of agrarian middle class

Question 3

3 broad phases in welfare state expansion

Answer 3

1. 19th century: early cover of ‘risks at work’
2. Early 20th century: pensions and old age security, w/healthcare slightly later on
3. Post-war: large expansion in welfare spending

Question 4

Baldwin (1990)

Answer 4

1. PRT narrowly focuses on working-class mobilisation, but middle-class often part of cross-class alliance supporting welfare state development
2. Welfare state not just a tool for redistribution, but provides social insurance
3. Unique features of Nordic welfare states shaped by interests of agrarian middle class

Question 5

Korpi (1989)

Answer 5

Across 18 OECD countries, left participation in government = important factor in development of sickness insurance

Question 6

Explain theory of logic of industrialisation argument

Answer 6

1. Welfare state emerged to meet society’s needs during industrialisation
2. Previously – family acted as informal welfare provider
3. Industrialisation + urbanisation – caused wider family ties to weaken + new vulnerabilities, necessitating greater role for state social security
4. Industrial societies developed social protection for these new risks:

Question 7

Problem with logic of industrialisation argument?

Answer 7

Unable to explain cross-national variation in timing, speed and nature of welfare state development

Question 8

‘Weak’ version of logic of industrialisation argument

Answer 8

Industrialisation + its correlates necessary to account for welfare state expansion, but further factors needed to explain cross-national variation

Question 9

Evidence that partisanship explains welfare state generosity

Answer 9

Huber and Stephens (2001)

Cumulative left control of government strongly positively associated w/welfare generosity

Question 10

Bismarck counter-example to PRT

Answer 10

1. If social policy development largely due to political strength of left, then why did large welfare states emerge from actions of the right in some cases?
2. Bismarck a conservative state builder, not social reformer concerned about lives of poor

Question 11

Response to Bismarck counter-example to PRT?

Answer 11

Kersbergen and Vis (2014)

Socialist movement pushed for reforms and welfare state development was a reaction to threat of working-class revolution

Question 12

Marxist view of welfare state development

Answer 12

Welfare state development = ‘riot insurance’ in capitalism

Question 13

Kersbergen and Vis (2014)

Answer 13

1. In Germany, socialist movement pushed for reforms and welfare state development was a reaction to threat of working-class revolution
2. Reconciliation of Bismarck example and PRT

Question 14

Swenson (2002)

Answer 14

1. Major, enduring social policy developments supported by cross-class coalitions of capitalists and workers
2. Social democratic PRT approach can’t explain development of New Deal in USA (must consider role of employers)

Question 15

Problematic assumption of PRT

Answer 15

1. Employers everywhere oppose extension of social policy

2. Presupposes a kind of zero-sum political conflict of workers vs capitalists

Question 16

Problem with role of employers as explanation of welfare state development

Answer 16

Leaves important questions unanswered:

1. When do self-interested, profit-maximising firms support social policies that impose costs on them and provide benefits to employers?
2. What factors affect variation in social policy preferences of firms?

Question 17

How does VoC explain employer preferences for welfare state development?

Answer 17

1. Institutional variables of political economies shape social policy preferences of firms
2. Welfare state = insurance systems that accompany different nature of skill formation in different VoC (CMEs/LMEs)
3. CME institutions:
   (i) Encourage investment in co-specific skills
   (ii) To incentivise such investment, workers and employers interests in supporting welfare state aligned
4. LME institutions:
   (i) Encourage investment in general skills
   (ii) Workers and employers more antagonistic; firms less likely to join coalition in support of generous welfare benefits

Question 18

Lindert (2004)

Answer 18

Main forces driving post-war social spending:

(i) Elections (higher turnover of government leaders associated with higher social spending)
(ii) Ageing population
(iii) Ethnic fractionalisation (esp. important reason why average social transfers much lower in USA)

Question 19

Main forces driving post-war social spending:

(i) Elections (higher turnover of government leaders associated with higher social spending)
(ii) Ageing population
(iii) Ethnic fractionalisation (esp. important reason why average social transfers much lower in USA)

Answer 19

Lindert (2004)

Question 20

Mares (2009)

Answer 20

FUNDAMENTAL PROBLEM WITH COMPARATIVE EMPIRICAL WELFARE STATE ANALYSIS

1. Fundamental problem w/comparative empirical work of welfare state development = focus on narrow universe of advanced industrialised economies (c. 14-18 countries)
2. Reason - high multi-collinearity among explanatory variables limits testing of theoretical explanations
3. Implication - studies unable to prove impact of 1 explanation over another

Question 21

FUNDAMENTAL PROBLEM WITH COMPARATIVE EMPIRICAL WELFARE STATE ANALYSIS

1. Fundamental problem w/comparative empirical work of welfare state development = focus on narrow universe of advanced industrialised economies (c. 14-18 countries)
2. Reason - high multi-collinearity among explanatory variables limits testing of theoretical explanations
3. Implication - studies unable to prove impact of 1 explanation over another

Answer 21

Mares (2009)

Question 22

Huber and Stephens (2001)

Answer 22

INFLUENCES ON WELFARE STATE DEVELOPMENT

1. Cumulative left control of government strongly positively associated w/welfare generosity (most important factor)

2a. Constitutions w/many ‘veto points’ in policy process (e.g. strong bi-cameralism, federalism etc) slowed change (e.g. USA, Switzerland)
2b. Constitutions w/few or none saw more rapidly policy change (e.g. UK, Denmark)

Question 23

1. Major, enduring social policy developments supported by cross-class coalitions of capitalists and workers
2. Social democratic PRT approach can’t explain development of New Deal in USA (must consider role of employers)

Answer 23

Swenson (2002)

Question 24

Social democratic PRT approach can’t explain development of New Deal in USA (must consider role of employers)

Answer 24

Swenson (2002)