Explanations for the Welfare State

September 22nd, 2016

Two types of explanations of the Welfare State
Long-term explanations of the emergence of the WS
o Says little about differences between welfare states
Explanations of differences between them
o However, says little about why welfare states come about
Classic Long-Term Explanations
Karl Polanyi, The Great Transformation
o WSsocietys self-protection against the destructive threat of
capitalism
Believed it evolved to have the economy run itself
Believe it was a disastrous dystopia, enormously
destructive to commodify everything
o Problems:
No clear causal mechanism
Assumed automatism; cant explain why these
choices were made (society as an entity cannot
make decisions)
Left-wing government protecting capitalism against itself?
Not plausible
No explanation of differences
Functionalist and Structuralist Theories
Functionalist/Modernization theory
o WS response to emerging social needs due to industrialism,
urbanization, demographic changemade possible by economic
growth
True, but why do those things lead to WS?
Structuralist Marxism
o State structurally compelled to produce exactly those reforms
that ensure cohesion of capitalist mode of production
o State repairs issues that threaten the capitalist system (i.e.
through welfare), but prevents radicalization
Problems with Functionalist and Structuralist theories
o No credible causal mechanism (who is doing the reforming and
why)
o No explanation for differences between countries
o Structuralist Marxism:
Socialist governments unwittingly serving long-term
capitalist interests?

Did capitalist state really save capitalism from selfdestruction? How would we know?

T.H. Marshall, Citizenship and Social Class (1950)

British theory
Long historical process of expanding rights for the lower orders of
society (for people considered persons in a legal sense)
o Civil rights: 18th century
Right to inviolability of person and their possessions
o Political rights: 19th century
o Social rights: 20th century
People of lower SES gaining more power; pressure
increases for welfare state programs
Problems
o No clear causal mechanism
o No explanation for differences
o Reflects British experience but not that of (Bismarck) Germany
Marxist/Elitist Instrumentalism
The state is the instrument of the capitalist class/corporate elite
o WS reform guaranteed to serve their long-term interests at the
expense of workers
Subtler version: Domhoffs corporate liberalism thesis: more
powerful, more far sighted, more liberal fraction of the corporate elite
dominates the policy-making process
WS reform is for pacifism, avoidance of working-class rising up
Problems
o What is the capitalist class?
Difficult to pin a single, coherent capitalist class
o Empirical cases of left-wing govts pushing through WS reform
strongly opposed by most corporate leaders
o If some capitalists support it, in what sense is it the interest of
the capitalist class
o No explanation of differences between countries (unless
differences in degree of control, but then state is not fully under
capitalist control)
Theories Explaining Differences Between Welfare States
Pluralism
Interest groups, voting blocks and lobbies
o Policy compromise with most powerful groups getting the most
Problems

o Usual critique: overestimates power of non-business groups and

voters
o Theory too open ended, not likely to be falsified
o No clear explanation for relative strengths of different interest
groups
Power Resource Theory
Response to pluralism
A class twist
o Most important mobilized political interest groups in modern
democratic countries are those representing capital and labor
o Where labor (unions, left wing political parties) is strongest it is
able to push through the most generous and redistributive
welfare programs
o Where labor is weak, business interests able to limit the
implementation of welfare programs to relatively minimal,
residual ones only
Problems
o Evidence somewhat mixed and period dependent
o Works best for SD-Liberal contrast, less so for others
State-Centered Theories
State institutions affect likelihood of welfare reform: the more
decentralized the harder to implement welfare programs
State personnel have an interest in expanding the role of the state
Problems:
o Decentralization slows down retrenchment as well?
Can build faster in decentralized system, but can dismantle
it faster as well
o Decentralization sometimes promotes reform
Policy experiments at the local level; may create
competition between local governments
o Bureaucrats not all-powerful: recent retrenchment
Culture/Values Theories
Anglo-Saxons vs. the Others: individualism vs. collectivism
Problems
o Values cut across these groups of countries
o Causal mechanism values policies not clear
o Values cause or consequence
Is state egalitarian, thus causing WS, or does WS make
people think in more egalitarian ways?
Welfare State Regimes Theory: different types of WS have different causes

Social Democratic: power of unions and Labor

Conservatism-corporatist: power of church, CD parties and their
respective unions
Liberal regimes: power of business, culture of individualism,
decentralized state structure
Problem: to close to anything goes pluralism?

Explaining the Persistence of Differences

Path dependency/institutional lock-in
QWERTY principle: keyboard deliberately made inconvenient because
typing too fast on typewriter causes jamming. Could change this now
that we have computer keyboards, but sunken coststoo much time
and money invested into it, now were stuck
o Same principle with WS and why certain policies are generally
implemented in certain regimes
Programs create their own constituencies
o Invested in the programs they have
New programs adopt pre-existing administrative structures
Evidence: some supposing evidence but also much cross-national
borrowing
Defining Poverty
Poverty rate: proportion of the population living below the poverty line
Two different conceptions of poverty
o Absolute poverty: income less than necessary to buy basic
necessities
o Relative poverty: income falling below a certain share of what
others in community receive
Absolute poverty
Cost of minimum basket of basic necessities poverty line
Poverty rate proportion of population below poverty line
Issues:
o Minimum/basic necessities matters of political/moral judgement
o Economic growth poverty rate?
o Does not include free or subsidized services like public health
care and education
Relative poverty
Usual measure: income below 30, 40, or 50% of the median
o Most readily used for international comparisons
Alternative: those spending above a certain percentage of income on
necessities

o Requires detailed household spending information