Economic Growth and

Welfare Systems Jean Monnet Chair in European Integration Studies

Prof. PASQUALE TRIDICO

The Political Economy of European Welfare

Capitalism

1. European Welfare Capitalism in Good Times and

Bad

2. Varieties of European Welfare Capitalism

3. Globalisation, Europeanisation and the Welfare

State

4. Competitiveness and the Welfare State

5. European Integration and Welfare Capitalism

6. Convergence and Divergence in European Welfare

Varieties of European Welfare

Capitalism

To illustrate the point, the development of ‘Bismarckian’ and ‘Beveridgean’

welfare systems can appear as a fundamental bifurcation between European

states. Different initial institutional designs set countries on distinct

trajectories that ultimately generated quite different forms of state welfare

provision

Bismarckian : the former rooted in occupationally fractured, status-

preserving, ‘corporatist’ systems,

Beveridgean : the latter provide ‘universal’ flat-rate benefits.

Worlds of welfare capitalism

The Three Worlds of Welfare Capitalism (1990), has become the standard

approach in welfare state analysis.

The persuasive power of Esping-Andersen’s analysis derives, in large part,

from the clarity with which he proclaimed the existence of three distinct

types of welfare state

1. Liberal (different from the Beveridgian)

2. conservative-corporatist

3. social democratic (closer to the idea of Beveridge).

Each is associated with a specific exemplary form of welfare provision

(respectively means-testing, occupationally or sector-specific social insurance,

and universalism).

the ‘liberal welfare state’

the ‘liberal welfare state’, is characterised by Esping-Andersen as one in which

‘means tested assistance, modest universal transfers, or modest social insurance

plans predominate’ and the ‘progress of social reforms has been severely

circumscribed by traditional, liberal work-ethic norms’ (1990: 26).

Within such regimes, the state may actively encourage the market by subsidising

private welfare schemes – thereby aggravating the dualism between state-

welfare recipients and the majority who use ‘private’ systems.

This ‘liberal’ group is often equated with a model linked to cultural, linguistic or

economic features of Anglo-Saxon states (alabeling term used, for example, by

Sapir 2006). Esping-Andersen identified the US, Canada and Australia as

archetypical examples of

conservative-corporatist’ regime-type

the ‘conservative-corporatist’ regime-type, the state stands ‘perfectly ready

to displace the market’. Accordingly, ‘private insurance’ fringe benefits play a

truly marginal role.’ In this largely state-initiated ‘corporatist’ social

insurance system, the ‘preservation of status differentials’ is key, and hence

the ‘redistributive impact’ of social policy is ‘negligible’.

These regimes ‘are also typically shaped by the church and hence strongly

committed to the preservation of traditional family-hood’.

Non-working wives are invariably excluded from social insurance.

Esping-Andersen notes that day care and families services are ‘conspicuously

underdeveloped’ within this ‘regime-type cluster’, mentioning Austria,

France, Germany and Italy as examples (in 1990)

The social democratic ‘regime cluster

In the social democratic ‘regime’, policy does not ‘tolerate a dualism

between state and market’, or ‘working class and middle class’

the welfare state promotes ‘an equality of the highest standards’, not of

‘minimum needs as was pursued elsewhere’.

Services and benefits were ‘upgraded to levels commensurate with even the

most discriminating tastes of the new middle classes’ and workers were

guaranteed ‘full participation in the quality of rights enjoyed by the better

off’.

The Nordic countries provide the obvious model for it. Indeed other analysts

often describe it as a Scandinavian or Nordic model

Ideological def. vs cultural/linguistic

categories

Ideological def:

1. liberalism,

2. conservatism,

3. social democracy,

4. radical

geographical and/or cultural/linguistic categories:

1. continental European;

2. southern Europe or Mediterranean;

3. Anglo-Saxon or sometimes Anglo-liberal;

4. eastern European, or east–central European,

5. Baltic;

6. Nordic, Scandinavian;

WS general objectives

welfarism has a range of objectives and implicates a variety of moral

principles. These might include:

• promoting economic efficiency;

• reducing poverty;

• promoting social equality;

• promoting social integration and avoiding social exclusion;

• promoting social stability; and

• promoting autonomy

WS general definition

1 definition: expenditure perspective

WS is a set of institutions and programme that provide public services and good to decrease risk life and increase income standard

2 definition: social rights perspective

WS is identified by the degree of social rights on the basis of which welfare goods and service are allocated from universalistic to residual forms, in order to reduce inequality and to decommodify welfare provisions from market

This second def is more appropriate according to Esping-Andersen in order to identify better the welfare and social mission of a state, otherwise, if we judge WS from the expenditure perspective, you may find that public expenditure of Health system for instance in USA is larger than many EU states, but this does not contribute more to reduce inequality, and to increase general health, because the health care is not decommodified

Commodification vs de-commodification

The commodification of labor, for Marx implied worker alienation

The answer to commodification in welfare terms is decommodification

Decommodification as putting out of the market welfare goods and services

A different degree decommodification occurs among WS

Decomodification is linked to the extend of social rights among citizen, from universal (socialdemocartic WS) to residual (in liberal WS) to selective (in corporative WS)

Decommodification of WS is very HIGH in socialdemocratic WS, lower in Liberal WS, medium in Corporative WS

Esping-Andersen argues that decommodification ‘occurs when a service is rendered as a matter of right, and when a person can maintain a livelihood without reliance on the market’

The decommodification index Esping-Andersen

Esping-Andersen’s degrees of conservatism, liberalism and

socialism in welfare states

Evolution of 3 worlds of capitalism

Pontusson, 2008 (2 worlds of capitalism?)

Conservative–liberal (Y-axis) and egalitarian (X-axis)

dimensions of welfare statehood, early 1980s – Pontusson 2008

Conservative–liberal (Y-axis) and egalitarian (X-axis)

dimensions of welfare statehood, early 2000s – Pontusson 2008

Castles’ and Mitchell’s (1993) categorisation of

welfare regimes