the good society - ablongman.com · refers to the way people who have different interests or views...

amsay

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THE GOOD SOCIETY

Alan Draper • Ansil R

© 2008

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INTRODUCTIONThe previous chapter examined the cleavages and parties foundamong affluent democracies. This chapter continues the discussionof rich democracies by looking at three types of regimes withinthem and then inquiring which of these regimes best meets thestandard of the good society. According to political scientist T. J.Pempel, different countries form a regime when they share similarpatterns of politics, institutions, and policies.1 Regimes emergebecause countries that tend to share similar policy profiles alsotend to cluster together in terms of their politics and institutions.Looking at regimes, as opposed to rich democracies in general orindividual countries in particular, adds a new dimension to ourunderstanding of comparative politics. The aerial perspective ofrich democracies artificially flattens the landscape, while a country-by-country analysis permits us to see only that part of the groundwe are standing on. Examining different types of regimes foundamong rich democracies gives us both detail and dimension.

Politics is one of the three elements that comprise a regime. Itrefers to the way people who have different interests or views behavewhen they compete for political power. But people don’t engage inpolitics alone. To do so would be ineffective. They do so in groups,either as parts of social movements or members of formalorganizations, such as interest groups and political parties. Theyorganize themselves along cleavage lines, such as those we reviewed

117

5Regimes in RichDemocracies

C H A P T E R

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SOCIAL DEMOCRATIC REGIMESPoliticsSocial democratic regimes are best examined where social democratic partieshave had the most success. But it is not enough to look at votes to determinesuccess. Similar levels of voter support do not translate into similar levels ofpolitical influence. For example, from 1920 to 1960, the Austrian, British,Danish, Norwegian, and Swedish social democratic parties each averagedabout 40 percent of the vote.1 In Austria and Britain, however, social demo-cratic parties “frequently represented a minority political influence,” while inthe three Scandinavian countries they regularly played a major role in thegovernment. Thus, what is critical in determining the relative influence ofsocial democratic parties is not only how popular they are, but how popularthey are compared to the parties they compete against. Only in Scandinavia,Francis Castles writes, have social democratic parties “maintained very con-siderable margins of advantage over their rivals.” As the dominant parties inthe Swedish, Norwegian, and Danish party systems, larger than all their rivals,they are frequently part of the ruling coalition, and often at the head of thegovernment. Thus, the social democratic regime is best exemplified in Scan-dinavian countries, where social democratic parties are the strongest and moststable in terms of government tenure and parliamentary strength, permittingthem to become the “natural” party of government.4

Social democratic parties blossomed in Scandinavia for a variety of rea-sons. First, the process of democratization was relatively gradual and smooth.The monarchy weakened, parliamentary rule was established, and the rightto vote was extended without much repression, disorder, or reversals. Partiesto the left of social democrats, such as the Communists, never gained trac-tion in Scandinavia due to the peaceful manner in which workers weregranted political rights. Social democracy enjoyed a virtual monopoly on theleft, enabling it to avoid the schism between communism and social democ-racy that afflicted many other West European countries.

Second, Scandinavian social democratic parties benefited from theabsence of linguistic, ethnic, and religious cleavages that could weaken andcompete with class as a basis of political loyalty. Scandinavian societies werethe most homogenous in all of Europe.5 As a result, social democratic par-ties did not have to contend with other complicating, crosscutting issues thatmight weaken class identification among workers. Party competition wasreduced to a form of the democratic class struggle in which groups definedby their place in production vied for power. Employers, farmers, and work-ers organized into their own political parties to the virtual exclusion of otherbases of political organization.6

Finally, social democratic parties in Scandinavia profited from a uniqueset of alliances. Elsewhere in Europe, farmers allied with capitalists to form

Social Democratic Regimes 119

in Chapter 4, which form the basis of conflict among them. Thenumber, nature, and intensity of these cleavages differ from oneregime to the next. Consequently, the kinds of groups that competefor political power differ from one regime to the next. In someregimes, for example, class cleavages are powerful and political actorsorganize around them. In other regimes, there are multiplecleavages, creating a variety of groups with different concerns.

Patterns of political conflict result from deep social fissureswhich give rise to social movements and political organizationsthat reflect them. These actors compete for political poweraccording to rules laid down by institutions, which are the secondhallmark of a regime. As we argued in Chapter 1, institutions areimportant because they encourage certain types of behavior anddiscourage others. Institutions create the rules of the game thatpolitical actors have to take into account as they develop theirstrategies. The struggle for power is structured according to therules that institutions create and enforce. Politics provides contentto conflict, while institutions give it form.

Last, regimes are set off by policies, the outcome of politicalconflict as filtered through institutions. Different politics andinstitutions yield different results. Some regimes spend more onsocial welfare than others. Some regimes are more concerned withreducing unemployment than they are with lowering inflation.Different policy choices set off one regime from the next.

The relationship between politics, institutions, and policies isoften mutually supportive. Groups that have success in one arena,either in terms of prevailing in political conflict, creatingsupportive institutions, or benefiting from favorable policies,increase their chances of success in the other arenas. The threeparts of a regime reinforce and complement each other.Consequently, they tend to fit together in predictable ways to formdistinctive regimes. This chapter reviews three types of regimesfound in advanced democratic societies: the social democratic,conservative, and Christian democratic models. It then examineshow each model or regime fares in enhancing its citizens’capability. These three regimes do not exhaust the types of regimesto be found among rich democracies. Some countries, such asFrance, are simply too distinctive to belong to any of our threemodels. Other rich democracies have been identified with otherregimes beyond the ones we examine here.1 But we believe thesethree regimes provide a good summary of the different wayspolitics is organized and practiced among advanced capitalistdemocracies.

118 CHAPTER 5 Regimes in Rich Democracies

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SOCIAL DEMOCRATIC REGIMESPoliticsSocial democratic regimes are best examined where social democratic partieshave had the most success. But it is not enough to look at votes to determinesuccess. Similar levels of voter support do not translate into similar levels ofpolitical influence. For example, from 1920 to 1960, the Austrian, British,Danish, Norwegian, and Swedish social democratic parties each averagedabout 40 percent of the vote.1 In Austria and Britain, however, social demo-cratic parties “frequently represented a minority political influence,” while inthe three Scandinavian countries they regularly played a major role in thegovernment. Thus, what is critical in determining the relative influence ofsocial democratic parties is not only how popular they are, but how popularthey are compared to the parties they compete against. Only in Scandinavia,Francis Castles writes, have social democratic parties “maintained very con-siderable margins of advantage over their rivals.” As the dominant parties inthe Swedish, Norwegian, and Danish party systems, larger than all their rivals,they are frequently part of the ruling coalition, and often at the head of thegovernment. Thus, the social democratic regime is best exemplified in Scan-dinavian countries, where social democratic parties are the strongest and moststable in terms of government tenure and parliamentary strength, permittingthem to become the “natural” party of government.4

Social democratic parties blossomed in Scandinavia for a variety of rea-sons. First, the process of democratization was relatively gradual and smooth.The monarchy weakened, parliamentary rule was established, and the rightto vote was extended without much repression, disorder, or reversals. Partiesto the left of social democrats, such as the Communists, never gained trac-tion in Scandinavia due to the peaceful manner in which workers weregranted political rights. Social democracy enjoyed a virtual monopoly on theleft, enabling it to avoid the schism between communism and social democ-racy that afflicted many other West European countries.

Second, Scandinavian social democratic parties benefited from theabsence of linguistic, ethnic, and religious cleavages that could weaken andcompete with class as a basis of political loyalty. Scandinavian societies werethe most homogenous in all of Europe.5 As a result, social democratic par-ties did not have to contend with other complicating, crosscutting issues thatmight weaken class identification among workers. Party competition wasreduced to a form of the democratic class struggle in which groups definedby their place in production vied for power. Employers, farmers, and work-ers organized into their own political parties to the virtual exclusion of otherbases of political organization.6

Finally, social democratic parties in Scandinavia profited from a uniqueset of alliances. Elsewhere in Europe, farmers allied with capitalists to form


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a potent coalition on the Right. In contrast, Scandinavian farmers adoptedan independent and powerful position separate from business interests. Scan-dinavian social democratic parties thus had the advantage of competingagainst a divided opposition. David Arter writes, “An important factor facil-itating the regular presence of social democratic parties in government inNorway and Sweden, and to a lesser extent Denmark, has been the historiclack of cohesion in [the] nonsocialist camp.”7 Not only did social democra-tic parties in Scandinavia benefit from disunity among their opponents, butthey contributed to their own success by forging alliances with groupsbeyond the working class. Scandinavian social democratic parties first becamedominant in the 1930s, when they successfully created an alliance betweenpeasants and workers. As the agricultural workforce declined, social democ-ratic parties successfully replaced them with white-collar workers as coalitionpartners.8 The dominance of Scandinavian social democratic parties today,their unique success, is attributed as much to their ability to attract middle-class voters as it is to the disunity of their opponents.

Social democratic party dominance in Scandinavia peaked in the 1950s.Since then, their fortunes have declined a bit, though they still remain dom-inant within their respective countries. They have been able to hold on topower but not hold back social change. An influx of immigrants in Scandi-navia raised new issues of multiculturalism, and a growing appreciation ofenvironmental and quality of life issues raised the profile of post-materialism.Crosscutting issues that were previously absent are now present. The impactof these changes is uneven across Scandinavia, having more effect, forinstance, on the fortunes of the Danish than the Swedish social democraticparty. Voter support declined, but their position of dominance remainedsecure, though not by the margins it had in the past. As Scandinavian socialdemocratic parties entered the twenty-first century, their dominance wasbowed but not broken.9

Disunity among their opponents, social homogeneity, strong working-class attachment, and an ability to appeal to middle-class voters beyond theirworking-class base have made social democratic parties the natural party ofgovernment in Scandinavia. It has given these parties political influence, pro-viding them an extraordinary opportunity to transform their program intopolicies.

PoliciesDespite their reputation as socialist countries, Scandinavian societies are thor-oughly capitalist. Private ownership of the means of production prevails. Thestate does not dictate prices or production levels; the market does. The statedoes not own and control the commanding heights of the economy; privateowners do. In fact, more of Swedish industry came under state control when


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a potent coalition on the Right. In contrast, Scandinavian farmers adoptedan independent and powerful position separate from business interests. Scan-dinavian social democratic parties thus had the advantage of competingagainst a divided opposition. David Arter writes, “An important factor facil-itating the regular presence of social democratic parties in government inNorway and Sweden, and to a lesser extent Denmark, has been the historiclack of cohesion in [the] nonsocialist camp.”7 Not only did social democra-tic parties in Scandinavia benefit from disunity among their opponents, butthey contributed to their own success by forging alliances with groupsbeyond the working class. Scandinavian social democratic parties first becamedominant in the 1930s, when they successfully created an alliance betweenpeasants and workers. As the agricultural workforce declined, social democ-ratic parties successfully replaced them with white-collar workers as coalitionpartners.8 The dominance of Scandinavian social democratic parties today,their unique success, is attributed as much to their ability to attract middle-class voters as it is to the disunity of their opponents.

Social democratic party dominance in Scandinavia peaked in the 1950s.Since then, their fortunes have declined a bit, though they still remain dom-inant within their respective countries. They have been able to hold on topower but not hold back social change. An influx of immigrants in Scandi-navia raised new issues of multiculturalism, and a growing appreciation ofenvironmental and quality of life issues raised the profile of post-materialism.Crosscutting issues that were previously absent are now present. The impactof these changes is uneven across Scandinavia, having more effect, forinstance, on the fortunes of the Danish than the Swedish social democraticparty. Voter support declined, but their position of dominance remainedsecure, though not by the margins it had in the past. As Scandinavian socialdemocratic parties entered the twenty-first century, their dominance wasbowed but not broken.9

Disunity among their opponents, social homogeneity, strong working-class attachment, and an ability to appeal to middle-class voters beyond theirworking-class base have made social democratic parties the natural party ofgovernment in Scandinavia. It has given these parties political influence, pro-viding them an extraordinary opportunity to transform their program intopolicies.

PoliciesDespite their reputation as socialist countries, Scandinavian societies are thor-oughly capitalist. Private ownership of the means of production prevails. Thestate does not dictate prices or production levels; the market does. The statedoes not own and control the commanding heights of the economy; privateowners do. In fact, more of Swedish industry came under state control when


y,tes,

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health care, day care, pensions, and more are provided to the rich and pooralike. Universal coverage was essential in binding the middle-class to the wel-fare state because they drew benefits from it. It gave middle-class voters astake in the welfare state and became the glue holding together the middle-class and working-class coalition that was the basis of social democratic partydominance. Resources and risks were pooled in the welfare state, creating aconvergence of interest between the different classes.

Second, the social democratic welfare state is comprehensive, providingcradle-to-grave protection, from day care to home help for the elderly. It isalso generous: Replacement rates for income lost due to pregnancy, sick-ness, injury, and unemployment are high, at around 75 percent of formerearnings.11 The universal, comprehensive, and generous nature of the wel-fare state detaches citizens’ quality of life from how they perform in the labormarket, on the wages and benefits they receive from their job. Their stan-dard of living does not depend on their paycheck. Certain goods and ser-vices, such as health care or day care, are taken off the market; they are nolonger for sale only to those fortunate enough to afford them, but are pro-vided by the state to all as a right of citizenship.

Third, social democratic welfare states do not hand out checks to clients.Instead, they are service intensive. Other countries may spend as much asScandinavian countries do on social services, but they don’t deliver them.Scandinavian governments are virtually alone, Evelyne Huber and JohnStephens noted, in “providing a wide range of services outside of education,and together with the United Kingdom, New Zealand, and Italy, healthcare.”12 They also run day-care centers, elderly care, job training, and after-school programs. Public sector employment is so large proportionally inScandinavia because the range of services delivered by the state is soextensive.

Lastly, social democratic welfare states are redistributive. Korpi and Palmefound that countries that target benefits to the poor actually have less


nonsocialist parties took power in 1976 than during the previous fourdecades of uninterrupted social democratic rule!10 Far from wanting toundermine capitalism, social democrats want to see business thrive becauseit generates the tax revenue upon which social democratic policies depend.

Although Scandinavian countries are not socialist, their reputation forbig government is well deserved. Table 5.1 replicates Table 3.1 and presentsgovernment spending and taxes as a proportion of GDP. According to thesefigures, Sweden ranked first, Norway second, and Denmark fourth amongall rich democracies in the proportion of their gross domestic productdevoted to state spending. In all three countries, state expendituresaccounted for more than 50 percent of GDP. Taxes also consumed a rela-tively large proportion of what the economy produces to pay for all thatspending. Total tax revenue is more than 50 percent of GDP in both Swe-den and Denmark. Big government is also reflected in the number of peo-ple the state employs. Here, too, social democratic parties have left theirmark. Public sector employees in Scandinavia are a larger proportion of thetotal workforce than is found in other rich democracies, with almost one-quarter of all workers in the public sector. Most of these workers areemployed in delivering an array of welfare state programs that the stateprovides.

The social democratic welfare state is distinctive in many respects. First,eligibility for welfare state programs is universal, that is, available to all citi-zens. Unlike some welfare states, where only those who fall below some acertain income level are eligible for benefits, in many Scandinavian countries


Table 5.1 Government Expenditures and Revenues as a Percent of GDP

Total general Total general government government

revenue expenditure of GDP % of GDP

Australia 36.4a 37.2a

Austria 52.2 32.1Belgium 49.9 49.4Canada 44.1 42.3Denmark 58.0 55.3Finland 54.2 49.0France 50.9 52.5Germany 45.5 48.3Ireland 35.2 34.1Italy 45.8 48.5

Total general Total general government government

revenue expenditure of GDP % of GDP

Japan 31.9 38.0Netherlands 46.5 46.4New Zealand 43.4b 41.8b

Norway 58.3 44.6Portugal 42.1 46.4Spain 39.2 39.3Sweden 61.7 52.7United Kingdom 41.1 40.2United States 34.7 34.9

a2000; b1997Source: OECD in Figures: Statistics in Member Countries, 2003 edition, p. 37.

Table 5.2 Public Sector Employment

Public employment Country as % of workforce

Austria 13.38 (1994)Belgium 9.74 (1999)Canada 13.92 (1999)Denmark 22.07 (1999)Germany 7.47 (1999)

Source: Evelyne Huber, Charles Ragin, John D. Stephens, David Brady, and Jason Beckfield, Comparative Wel-fare States Data Set, Northwestern University (University of North Carolina, Duke University, and Indiana Univer-sity, 2004).

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health care, day care, pensions, and more are provided to the rich and pooralike. Universal coverage was essential in binding the middle-class to the wel-fare state because they drew benefits from it. It gave middle-class voters astake in the welfare state and became the glue holding together the middle-class and working-class coalition that was the basis of social democratic partydominance. Resources and risks were pooled in the welfare state, creating aconvergence of interest between the different classes.

Second, the social democratic welfare state is comprehensive, providingcradle-to-grave protection, from day care to home help for the elderly. It isalso generous: Replacement rates for income lost due to pregnancy, sick-ness, injury, and unemployment are high, at around 75 percent of formerearnings.11 The universal, comprehensive, and generous nature of the wel-fare state detaches citizens’ quality of life from how they perform in the labormarket, on the wages and benefits they receive from their job. Their stan-dard of living does not depend on their paycheck. Certain goods and ser-vices, such as health care or day care, are taken off the market; they are nolonger for sale only to those fortunate enough to afford them, but are pro-vided by the state to all as a right of citizenship.

Third, social democratic welfare states do not hand out checks to clients.Instead, they are service intensive. Other countries may spend as much asScandinavian countries do on social services, but they don’t deliver them.Scandinavian governments are virtually alone, Evelyne Huber and JohnStephens noted, in “providing a wide range of services outside of education,and together with the United Kingdom, New Zealand, and Italy, healthcare.”12 They also run day-care centers, elderly care, job training, and after-school programs. Public sector employment is so large proportionally inScandinavia because the range of services delivered by the state is soextensive.

Lastly, social democratic welfare states are redistributive. Korpi and Palmefound that countries that target benefits to the poor actually have less


us fournting tobecauseepend.tion forpresentsto these amongproductndituresd a rela- all thatth Swe- of peo-eft theirn of theost one-kers arehe state

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Table 5.2 Public Sector Employment


Austria 13.38 (1994)Belgium 9.74 (1999)Canada 13.92 (1999)Denmark 22.07 (1999)Germany 7.47 (1999)


Ireland 6.71 (1999)Netherlands 6.07 (1997)Norway 23.29 (1999)Sweden 21.35 (1999)United States 10.44 (1999)

Source: Evelyne Huber, Charles Ragin, John D. Stephens, David Brady, and Jason Beckfield, Comparative Wel-fare States Data Set, Northwestern University (University of North Carolina, Duke University, and Indiana Univer-sity, 2004).

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Once the welfare state shouldered many of the caring functions that moth-ers performed, women could enter the paid labor force, and the expansionof jobs in the public sector created room for them to do so. Many womenbecame public sector employees who delivered the services that made theirentry into the labor market possible.

The welfare state also contributes to the dynamism and competitivenessof their economies. In 2003, the World Economic Forum, a group of worldbusiness and political leaders, ranked the United States the second most com-petitive economy in the world, followed next by Sweden and Denmark, withNorway occupying the 22nd spot.16 Scandinavian economies have to beextremely competitive, because their home markets are so small and they haveto export most of what they produce. They need to adjust continually, adoptnew technologies, and move resources from declining sectors to rising newindustries in response to shifts in international markets. This process of cre-ative destruction poses a threat to workers who risk losing their livelihoodswhen plants close and whole industries become uncompetitive or new tech-nology threatens their job. The welfare state, however, alleviates these threatsby socializing the costs of economic change so that those costs do not falldirectly on the workers themselves.17 The security provided by the welfarestate reduces opposition to new, labor-saving technologies as well as demandsfrom workers to maintain uncompetitive firms and industries by insulatingthem from the costs of a rapidly shifting labor market.

The welfare state also contributes to the competitiveness of the economyby moderating workers’ wage demands. Wage restraint is necessary becauseScandinavian firms must compete in world markets: They risk being pricedout if wage costs are too high. Workers in export industries have accommo-dated this requirement by giving up wages they might have been able toobtain in exchange for compensating welfare state benefits.18

Finally, the welfare state supports the economy through active labormarket policies. In contrast to passive labor market policies that are contentsimply to offer income-support to the unemployed, active labor market poli-cies are designed to reintegrate the unemployed into the labor force. Theyoffer retraining, job placement, and relocation assistance to unemployedworkers in order to assist their transition back into the workforce. Activelabor market policies help make the workforce more productive by increas-ing skill levels within it. They match skills to what employers need, and easethe movement of workers from declining to rising new sectors. Denmark, forexample, spends nearly 4 percent of its GDP on active labor market politics,more than twenty times what the U.S. spends on worker training as a per-centage of its GDP.

The result has been the emergence of highly competitive capitalisteconomies alongside large and redistributive welfare states. Far from acting


redistributive effect than those countries with more universalistic welfarestates.13 Social democratic regimes generally provide benefits to most of thepopulation, and those benefits tend to be equal. Awarding every householdan equal amount—for example, giving $10,000 to people earning $30,000and the same amount to someone earning $60,000—reduces inequality.Whereas previously the latter earned twice as much as the former ($60,000/$30,000), the latter now earns only 1.75 percent as much ($70,000/$40,000) after both receive the same income transfer.14 In other regimeswhere benefits are targeted to the needy, the level of transfers is so low thatcomparatively little redistribution takes place.15 The poor may receive a largerproportion of income transfers when benefits are targeted to them, but thebenefit is so low that it does not marginally improve their position. Low-income groups do better in terms of catching up with those above themwhen they receive less of more, as is the case in social democratic regimes,than when they receive more of less.

Critics frequently charge that Scandinavian style welfare states reduce cit-izens’ incentives to work. But far from creating work disincentives, the wel-fare state in Scandinavia has actually contributed to economic efficiency andproductivity. As Table 5.3 indicates, Scandinavian countries have high adultlabor force participation rates; the largest percentage of adults working andcontributing to the economy. The labor force participation rate in all threeof our social democratic countries was higher than those recorded for anycountry in our other two models. The high rate of labor force participationin Scandinavia is due almost entirely to the number of women who work.The welfare state made this possible by providing a range of services thatrelieved the burden of care that previously required women to stay at home.


Table 5.3 Adult and Female Employment Rates

All adults Women (2003) (2003)

Denmark 75.1 70.5Norway 75.9 72.9Sweden 74.3 72.8Average 75.1 72.1

Austria 68.2 61.2Belgium 59.3 51.4Netherlands 73.6 65.8Germany 64.6 58.7Average 66.4 59.3

All adults Women(2003) (2003)

Canada 72.1 67.7Ireland 65.0 55.4United States 71.2 65.7Average 69.4 62.9

Source: Jonas Pontusson, Inequality and Prosperity: Social Europe vs. Liberal America (Ithaca: Cornell UniversityPress, 2004), p. 77.

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Once the welfare state shouldered many of the caring functions that moth-ers performed, women could enter the paid labor force, and the expansionof jobs in the public sector created room for them to do so. Many womenbecame public sector employees who delivered the services that made theirentry into the labor market possible.

The welfare state also contributes to the dynamism and competitivenessof their economies. In 2003, the World Economic Forum, a group of worldbusiness and political leaders, ranked the United States the second most com-petitive economy in the world, followed next by Sweden and Denmark, withNorway occupying the 22nd spot.16 Scandinavian economies have to beextremely competitive, because their home markets are so small and they haveto export most of what they produce. They need to adjust continually, adoptnew technologies, and move resources from declining sectors to rising newindustries in response to shifts in international markets. This process of cre-ative destruction poses a threat to workers who risk losing their livelihoodswhen plants close and whole industries become uncompetitive or new tech-nology threatens their job. The welfare state, however, alleviates these threatsby socializing the costs of economic change so that those costs do not falldirectly on the workers themselves.17 The security provided by the welfarestate reduces opposition to new, labor-saving technologies as well as demandsfrom workers to maintain uncompetitive firms and industries by insulatingthem from the costs of a rapidly shifting labor market.

The welfare state also contributes to the competitiveness of the economyby moderating workers’ wage demands. Wage restraint is necessary becauseScandinavian firms must compete in world markets: They risk being pricedout if wage costs are too high. Workers in export industries have accommo-dated this requirement by giving up wages they might have been able toobtain in exchange for compensating welfare state benefits.18

Finally, the welfare state supports the economy through active labormarket policies. In contrast to passive labor market policies that are contentsimply to offer income-support to the unemployed, active labor market poli-cies are designed to reintegrate the unemployed into the labor force. Theyoffer retraining, job placement, and relocation assistance to unemployedworkers in order to assist their transition back into the workforce. Activelabor market policies help make the workforce more productive by increas-ing skill levels within it. They match skills to what employers need, and easethe movement of workers from declining to rising new sectors. Denmark, forexample, spends nearly 4 percent of its GDP on active labor market politics,more than twenty times what the U.S. spends on worker training as a per-centage of its GDP.

The result has been the emergence of highly competitive capitalisteconomies alongside large and redistributive welfare states. Far from acting


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DRAP.2177.CH05.117-148 2/22/07 4:55 PM Page 125

respectively. Not only is there a high percentage of the workforce organizedinto unions, the so-called union density rate, but the proportion of union-ized workers has grown or held steady in Scandinavia, in contrast to itsdecline in many other developed countries.

The largest trade union organization in each country is the Landsorga-nisationen (LO), a confederation of affiliated unions. The LO is closely alliedto the social democratic parties in each country. Union and party leadership,and rank-and-file union and party membership overlap. The LO offers finan-cial support to the party, educates its members on behalf of social democra-tic candidates and policies, and tries to align its bargaining strategy with theparty’s economic program. The unions are part of the institutional backdropthat supports social democratic party dominance and the welfare state poli-cies that flow from it.

Until recently, strong, powerful unions were at the forefront of corporatistinterest group systems in Scandinavia. Unions and employers participated incentralized, economy-wide wage bargaining with the encouragement of thestate. But corporatist policy-making is not as prevalent as it once was. JohannesLindvall and Joakim Sebring report that in Sweden there has “been a declinein corporatist institutions and practices.” Swedish employers withdrew fromthe governing boards of almost all state agencies in the 1990s. Union repre-sentatives were no longer invited to participate once their counterparts hadleft.23 While corporatist styles of policy-making declined in Sweden, theyremain vigorous in Norway, where wage bargaining between employers andunions is still centralized and the state is actively engaged in supporting andmaintaining the process.24 Danish corporatism lies between these twoextremes.

Political scientist Sheri Berman describes social democracy as the “mostsuccessful ideology and movement of the twentieth century,” but many of hercolleagues believe that social democratic regimes are now living on borrowedtime.25 High taxes punish entrepreneurial risk-taking by confiscating wealth.Large welfare states undermine the work ethic and are a drag on productiv-ity. Unionized workers scare away potential investors who desire compliantemployees, and new issues as a result of growing immigrant populations andquality-of-life concerns threaten to crosscut and weaken class identificationand patterns of class voting that favor the social democrats. These are real chal-lenges facing social democratic regimes. But social democratic regimes alsodemonstrate remarkable resiliency in the face of them. Far from underminingeconomic growth, there is evidence that welfare states promote it by enhanc-ing workers’ skills. Far from scaring away investors, the quality of Scandinavia’sworkforce, its cooperative labor relations, and the public investments madeby the social democrats continue to attract outside investment. Far fromreducing social democratic party dominance, new issues may strengthen it by


as a drag on the economy, the welfare state has helped it grow. It has per-mitted the economy to take advantage of women’s talents, moderated wagedemands, improved workers’ skills and productivity, and aligned the inter-ests of workers with technological change and shifting patterns of investmentby removing the threats these posed to their standard of living. As SwedishPrime Minister Göran Persson explained, the size of the welfare state is pre-sumed to prevent an economy from growing just as the bumblebee “with itsheavy body and frail wings shouldn’t fly. Yet it does. . . . We have high taxesand a big public sector—and yet Sweden flies. And we fly in a way that manylook upon with envy.”19

InstitutionsScandinavian countries have centralized political systems. They are all parlia-mentary democracies, which encourages party discipline. Members of par-liament vote with their party. Parliamentary democracies also tend to becentralized, with the legislative and executive branches fused together, andthe former empowering the latter. In contrast to presidential systems, wherechecks and balances often lead to deadlock, the government can actually gov-ern, confident that it has the support of disciplined majorities in the legisla-ture. The division of authority between the legislative and executivebranches—and the potential conflict and stalemate it may lead to—is avoided.

Scandinavian political systems are also unitary political systems, in whichpower is concentrated at the national level. There is little devolution of powerto lower, subnational parts of the state. In Sweden, for instance, provincialgovernors are appointed by and responsible to the ruling government. Polit-ical centralization is also evident in Denmark and Sweden where each has aunicameral legislature. Norway has two legislative chambers, but the sameparty majority rules in both, making the second chamber politically trivial.20

Finally, judicial review, the ability of the courts to nullify laws as unconstitu-tional, is weak in Scandinavia. Gallagher, Laver, and Mair write, “Judicialreview is not a strong feature of political life in the Scandinavian countries;only in Norway does it have strong roots, and even there it never assumedgreat significance.”21 One group of researchers that considered all of thesedifferent constitutional elements together—unicameralism, weak federalism,absence of judicial review, and parliamentary government—found Scandina-vian political systems to be highly centralized, providing minorities with fewopportunities to block legislation that the majority prefers.22

Aside from adjusting their strategies to accommodate a centralized polit-ical system, political actors in Scandinavia also must take into account a largeand powerful labor movement. A large proportion of the labor force in thesecountries is organized into unions. In Norway, 55 percent of labor force isunionized. For Sweden and Denmark, the figure is 80 and 85 percent,


DRAP.2177.CH05.117-148 2/22/07 4:55 PM Page 126

respectively. Not only is there a high percentage of the workforce organizedinto unions, the so-called union density rate, but the proportion of union-ized workers has grown or held steady in Scandinavia, in contrast to itsdecline in many other developed countries.

The largest trade union organization in each country is the Landsorga-nisationen (LO), a confederation of affiliated unions. The LO is closely alliedto the social democratic parties in each country. Union and party leadership,and rank-and-file union and party membership overlap. The LO offers finan-cial support to the party, educates its members on behalf of social democra-tic candidates and policies, and tries to align its bargaining strategy with theparty’s economic program. The unions are part of the institutional backdropthat supports social democratic party dominance and the welfare state poli-cies that flow from it.

Until recently, strong, powerful unions were at the forefront of corporatistinterest group systems in Scandinavia. Unions and employers participated incentralized, economy-wide wage bargaining with the encouragement of thestate. But corporatist policy-making is not as prevalent as it once was. JohannesLindvall and Joakim Sebring report that in Sweden there has “been a declinein corporatist institutions and practices.” Swedish employers withdrew fromthe governing boards of almost all state agencies in the 1990s. Union repre-sentatives were no longer invited to participate once their counterparts hadleft.23 While corporatist styles of policy-making declined in Sweden, theyremain vigorous in Norway, where wage bargaining between employers andunions is still centralized and the state is actively engaged in supporting andmaintaining the process.24 Danish corporatism lies between these twoextremes.

Political scientist Sheri Berman describes social democracy as the “mostsuccessful ideology and movement of the twentieth century,” but many of hercolleagues believe that social democratic regimes are now living on borrowedtime.25 High taxes punish entrepreneurial risk-taking by confiscating wealth.Large welfare states undermine the work ethic and are a drag on productiv-ity. Unionized workers scare away potential investors who desire compliantemployees, and new issues as a result of growing immigrant populations andquality-of-life concerns threaten to crosscut and weaken class identificationand patterns of class voting that favor the social democrats. These are real chal-lenges facing social democratic regimes. But social democratic regimes alsodemonstrate remarkable resiliency in the face of them. Far from underminingeconomic growth, there is evidence that welfare states promote it by enhanc-ing workers’ skills. Far from scaring away investors, the quality of Scandinavia’sworkforce, its cooperative labor relations, and the public investments madeby the social democrats continue to attract outside investment. Far fromreducing social democratic party dominance, new issues may strengthen it by


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DRAP.2177.CH05.117-148 2/22/07 4:55 PM 7

are less intense in conservative regimes because they have to contend withother sources of conflict. In the United States, for example, race, gender, andreligion crosscut and weaken class identification. The heterogeneity of Amer-ican society makes it hard to build bridges among workers who are differentfrom and suspicious of one another. In Ireland, the party system has pivotedon center-periphery issues that arose with Irish independence from Britain.Contending narratives of Irish nationalism have drowned out class appealsby the Irish Labour Party and contributed to the “absence of ties to a par-ticular class base in the parties.”27 As a result, according to one scholar, Ire-land “has had, by far, the lowest left-wing vote in Western Europe.”28 InCanada, like Ireland, the party system “is an anomaly in that it has neverpassed through a stage of class-divided electoral politics.”29 Religion, lan-guage, and especially region influence Canadian support for political partiesmore than class does. Parties that have their base in particular provinces over-shadow national divisions based on class.30

In the absence of left-wing parties to aggregate and articulate working-class demands, business has been politically dominant in conservative regimes.Business enjoys an interest group advantage in that it is well organized, employsthe most lobbyists, and contributes the most to political campaigns. Mostpoliticians themselves are from the upper classes. In addition, the electoral sys-tem in these regimes is afflicted with low voter turnout, which is due to work-ing-class voters dropping out because the class divide is so subdued.31 As aresult, politicians deliver policies that appeal to core wealthy voters who arelikely to vote and ignore the demands of peripheral, working-class voters whoare less likely to do so. The impact of these advantages is cumulative for busi-ness, permitting them to identify their interests with the interests of society asa whole. When Collins describes the existence of a “nationalist solidarity thatfinds expression in the assumption that what is good for business is beneficialto Ireland as whole,” he could also be describing Canada and the U.S.32

The politics of conservative regimes distinguishes them from otherAnglo-American democracies, such as Britain, Australia, and New Zealand,with which they otherwise share many features.33 For example, the balancebetween state and market in the group of Anglo-American countries we didnot include among our group of conservative regimes is very similar to thosewe did. In the Fraser Institute’s league standings of market-orientedeconomies, New Zealand ranked second, Britain ranked fourth, and Australiatied for sixth with Ireland, putting all of them ahead of Canada, which rankedthirteenth. But Britain, Australia, and New Zealand all have Labour Partiesthat are viable contenders for power. Such parties are absent in conservativeregimes. And class is a much more significant cleavage and basis of economicand political organization in this group of countries than in those we desig-nated as conservative regimes.

Conservative Regimes 129

producing even more disunity among its already divided opponents than itcreates within the party itself. Finally, instead of losing their competitive edge,their economies continue to be dynamic leaders in world markets.

The main issue for us, however, is to what degree social democraticregimes contribute to their citizens’ capability, and creating the good soci-ety. We will address this question following an examination of two other typesof regimes among rich democracies: the conservative and Christian democ-ratic models.

CONSERVATIVE REGIMESPoliticsCanada, Ireland, and the United States are examples of conservative regimes.Politics, policies, and institutions are roughly similar among these countries,although not as similar as countries that are part of the social democratic fam-ily of nations. Canada, Ireland, and the United States share a common cul-tural heritage as former British colonies and a common language (althoughCanada is officially bilingual). In addition, they strike a similar balancebetween markets and states. The production and allocation of goods and ser-vices is left almost wholly to the market, with the state relegated to influ-encing them marginally from the sidelines. For instance, in the FraserInstitute’s rankings, which provide a rough indicator of how market-orientedcountries are, the United States ranked fifth, Ireland sixth, and Canadathirteenth.

The tilt to the market is a result of the weakness of left-wing parties inconservative regimes. Left-wing parties are either completely absent, as is thecase in the United States, or have been outsiders in the political process.Canada’s social democratic party, the New Democratic Party, has enjoyedsome success at the provincial level, but has not been competitive nationally,relegated to just a few seats in parliament. In Ireland, the Labour Party hasenjoyed only minority representation in government. The political fortunesof these parties have been much grimmer in conservative than in either socialdemocratic or Christian democratic regimes.

Part of the reason these parties have not fared well in conservativeregimes is because class voting is so low within them. Canada, Ireland, andthe United States recorded the lowest, second-lowest, and third-lowest classvoting scores, respectively, of 20 countries examined in a recent study.26 Thatis, class position does not determine how citizens vote in conservative regimesto the extent it does elsewhere. A higher percentage of workers in these coun-tries vote for parties other than those their class interest might predict thanin either social democratic or Christian democratic countries. Class cleavages


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are less intense in conservative regimes because they have to contend withother sources of conflict. In the United States, for example, race, gender, andreligion crosscut and weaken class identification. The heterogeneity of Amer-ican society makes it hard to build bridges among workers who are differentfrom and suspicious of one another. In Ireland, the party system has pivotedon center-periphery issues that arose with Irish independence from Britain.Contending narratives of Irish nationalism have drowned out class appealsby the Irish Labour Party and contributed to the “absence of ties to a par-ticular class base in the parties.”27 As a result, according to one scholar, Ire-land “has had, by far, the lowest left-wing vote in Western Europe.”28 InCanada, like Ireland, the party system “is an anomaly in that it has neverpassed through a stage of class-divided electoral politics.”29 Religion, lan-guage, and especially region influence Canadian support for political partiesmore than class does. Parties that have their base in particular provinces over-shadow national divisions based on class.30

In the absence of left-wing parties to aggregate and articulate working-class demands, business has been politically dominant in conservative regimes.Business enjoys an interest group advantage in that it is well organized, employsthe most lobbyists, and contributes the most to political campaigns. Mostpoliticians themselves are from the upper classes. In addition, the electoral sys-tem in these regimes is afflicted with low voter turnout, which is due to work-ing-class voters dropping out because the class divide is so subdued.31 As aresult, politicians deliver policies that appeal to core wealthy voters who arelikely to vote and ignore the demands of peripheral, working-class voters whoare less likely to do so. The impact of these advantages is cumulative for busi-ness, permitting them to identify their interests with the interests of society asa whole. When Collins describes the existence of a “nationalist solidarity thatfinds expression in the assumption that what is good for business is beneficialto Ireland as whole,” he could also be describing Canada and the U.S.32

The politics of conservative regimes distinguishes them from otherAnglo-American democracies, such as Britain, Australia, and New Zealand,with which they otherwise share many features.33 For example, the balancebetween state and market in the group of Anglo-American countries we didnot include among our group of conservative regimes is very similar to thosewe did. In the Fraser Institute’s league standings of market-orientedeconomies, New Zealand ranked second, Britain ranked fourth, and Australiatied for sixth with Ireland, putting all of them ahead of Canada, which rankedthirteenth. But Britain, Australia, and New Zealand all have Labour Partiesthat are viable contenders for power. Such parties are absent in conservativeregimes. And class is a much more significant cleavage and basis of economicand political organization in this group of countries than in those we desig-nated as conservative regimes.


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helped the economies of conservative regimes prosper, while the economiesof some social democratic and Christian democratic regimes stagnated. Ire-land’s economy experienced higher growth in output and employment thanany industrialized democracy over the course of the 1990s. “The ‘joblessgrowth’ of earlier decades,” Sean O’Riain boasts, was “replaced by the high-est rate of employment growth and the highest proportion of the populationemployed in the history of the state.”35 The United States also experiencedboom times. It experienced the longest economic expansion in its history,with the stock market reaching record heights. In 1996, the misery index—a combination of unemployment and inflation—was the lowest it had beenin 40 years. Canada was not to be outdone. While its economy stagnated inthe first half of the 1990s, it prospered in the second half and beyond. From1997 to 2002, Canada had the highest growth rate among the G-7 coun-tries, as well as the highest rate of job creation.36

Another benefit of a cheap cup of coffee is a small public sector that doesnot require high taxes to keep it afloat. While social democratic regimes arecharacterized by “big government,” in which the state spends a lot, taxes alot, and employs a lot of people who deliver a wide array of services, thereverse is true in conservative regimes. Referring to Tables 5.1 on page •••,these countries cluster at the bottom of rich democracies in terms of statespending and revenues as a proportion of GDP. Finally, the regulatory handof the state is constrained when it comes to business activity in conservativeregimes. The principle of managerial authority, according to which managersshould not be hamstrung by state regulations or union work rules, is an arti-cle of faith in these countries. We can compare how thick or thin regulationis by examining the amount of legal protection employees enjoy before theycan be dismissed from their job. As Table 5.5 makes clear, where a higher


PoliciesThe price of a cup of coffee reveals policy differences between social demo-cratic and conservative regimes. Coffee costs $3 in a café in Stockholm, Swe-den, while it is half that price in a Dunkin’ Donuts shop in Stockholm,Maine. One reason for this price difference is that low-wage café workers inSweden are paid more than their counterparts in the U.S. In addition,Swedish café owners have to pay more in payroll taxes on employees’ wagesthan American employers do, and Swedish coffee drinkers have to pay a 25percent sales tax as compared to a 7 percent tax in Maine. Higher taxes andwages that make a simple cup of coffee cost twice the price in Sweden insurethat Swedish café workers earn adequate incomes and have access to goodpublic services, including health care. What benefits do café workers in Stock-holm, Maine get for serving coffee that is more affordable but leaves themwith lower wages and fewer public services?34

One answer, as indicated in Table 5.4, is that conservative regimes enjoyenviable records of creating new jobs and increasing economic growth. Jobgrowth and GDP growth have been much higher in conservative regimesthan in the other two models. Lower payroll taxes and wages reduce laborcosts for employers, permitting them to hire more workers. Employers cannow afford to hire less productive workers that they would not have beenable to employ profitably if their labor costs were higher. Lower labor costs


Table 5.4 Annual Average Employment Growth, 1990–2002; andAnnual Average GDP Growth, 1990–2003

Average employment Average GDP growth per year, growth per year,

Country 1990–2003 1990–2003

Denmark 0.2 2.3Norway 1.1 3.5Sweden –0.5 2.3Social Democratic Average 0.27 2.7

Austria 0.9 2.1Belgium 0.5 2.1Germany –0.2 1.5Netherlands 2.0 2.7Christian Democratic Average 0.90 2.1

Canada 1.4 3.3Ireland 3.5 7.7United States 1.2 3.3Conservative Average 2.0 4.8

Source: For “Annual Average Employment Growth” see Jonas Pontusson, Inequality and Prosperity: SocialEurope vs. Liberal America (Ithaca: Cornell University Press, 2004), p. 77. For “Annual Average GDP Growth”see “Growth of Output,” devdata.worldbank.org/wdipdfs/table4-1.pdf.

Table 5.5 Employment Protection Index Scores

Employment Country protection score

Denmark 1.8Norway 2.6Sweden 2.6Social Democratic Average 2.3

Austria 2.2Belgium 2.5Germany 2.5Netherlands 2.3Christian Democratic Average 2.4


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helped the economies of conservative regimes prosper, while the economiesof some social democratic and Christian democratic regimes stagnated. Ire-land’s economy experienced higher growth in output and employment thanany industrialized democracy over the course of the 1990s. “The ‘joblessgrowth’ of earlier decades,” Sean O’Riain boasts, was “replaced by the high-est rate of employment growth and the highest proportion of the populationemployed in the history of the state.”35 The United States also experiencedboom times. It experienced the longest economic expansion in its history,with the stock market reaching record heights. In 1996, the misery index—a combination of unemployment and inflation—was the lowest it had beenin 40 years. Canada was not to be outdone. While its economy stagnated inthe first half of the 1990s, it prospered in the second half and beyond. From1997 to 2002, Canada had the highest growth rate among the G-7 coun-tries, as well as the highest rate of job creation.36

Another benefit of a cheap cup of coffee is a small public sector that doesnot require high taxes to keep it afloat. While social democratic regimes arecharacterized by “big government,” in which the state spends a lot, taxes alot, and employs a lot of people who deliver a wide array of services, thereverse is true in conservative regimes. Referring to Tables 5.1 on page •••,these countries cluster at the bottom of rich democracies in terms of statespending and revenues as a proportion of GDP. Finally, the regulatory handof the state is constrained when it comes to business activity in conservativeregimes. The principle of managerial authority, according to which managersshould not be hamstrung by state regulations or union work rules, is an arti-cle of faith in these countries. We can compare how thick or thin regulationis by examining the amount of legal protection employees enjoy before theycan be dismissed from their job. As Table 5.5 makes clear, where a higher


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Table 5.5 Employment Protection Index Scores





Canada 1.1Ireland 1.3United States 0.7Conservative Average 1.0


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regimes (9.3 percent). The conservative score would have been even higherif it had included the United States, because the U.S. spent more than twicethe average share of spending devoted to private benefits (33.9 percent) thanits other conservative counterparts.38

Thus, we find our three countries clustering around a set of welfare poli-cies that include low levels of public spending on welfare in which meagerbenefits are distributed predominantly to the poor. The circumstances ofthose who are not poor are determined more through the private than thepublic sector; by their different fortunes on the labor market than by theirshared fates as citizens. The wealthy find such policies amenable because thesmall fiscal costs of the welfare state limit their taxes, and they can afford topurchase privately a level of services that fits the size of their wallets.

InstitutionsWhile countries regarded as social democratic regimes all had similar insti-tutional structures, the state displays a great variety of forms among the con-servative family of nations. For example, both Canada and the U.S. arefederal systems, with their power divided between national and subnationalunits. The provinces in Canada and the states in the U.S. have the authorityto make policy in areas reserved for them. Ireland, on the other hand, is aunitary state. Decentralization in Ireland does not take the form of movingpower down from the national to the local level, but of moving state officesout of Dublin, the capital, and into the provinces.

At the national level, both Canada and Ireland are parliamentary regimes,while the U.S. has a presidential system.39 Legislatures are not an effectivecheck on the executive in either Canada or Ireland due to strong party dis-cipline and weak internal committee structures. This contrasts with the situ-ation in the U.S., where Congress can be an effective counterweight to theexecutive. All three conservative regimes are bicameral, with a Senate as thesecond legislative chamber. But that is where the resemblance ends. In bothCanada and Ireland the Senate is weak, with power only to delay legislation.In the U.S., by contrast, the Senate is a powerful second chamber. Differ-ences are also apparent in electoral rules. Ireland has a form of proportionalrepresentation, while candidates who receive the most votes in Canada andthe U.S. are declared the winner.40 Finally, while judicial review is commonto all three conservative regimes, it is much stronger in Canada and the U.S.than it is in Ireland.41 In sum, then, the constitutional structures of conser-vative regimes display a great deal of variety. This is reflected in differencesof political centralization among them. Researchers coded the Irish consti-tutional structure at the bottom, indicating that it was highly centralized,including few veto points; Canada was coded in the middle of the pack; whilethe U.S. received the highest value of any of our countries, indicating that it


number indicates more regulatory protection, employees have more to fearfrom some imperious Donald Trump-like character in conservative regimessaying, “You’re fired,” than in the other two models.

A consequence of a small state sector is that conservative regimes ranklow in terms of welfare effort, the proportion of GDP devoted to socialspending. According to Table 5.6, Canada devoted more of its GDP to socialspending than any conservative country but it still trailed all of the countriesin the other models. Social democratic regimes devoted about a third of theirspending to welfare; Christian democratic regimes spend about 30 percent;while conservative regimes averaged less than 20 percent. Denmark, at thetop, made more than twice as much of a welfare effort as the U.S., whichbrought up the rear.37

Like the welfare state in social democratic regimes, its counterpart in con-servative regimes has certain properties. It is not designed to bring about abroad equality among the population by including everyone; instead it isintended to create a floor under which the poor cannot fall. As a result, cit-izens who do not meet the eligibility requirements for state services and ben-efits must pay for their equivalent out of pocket, if they can afford to—likeAnna does, our fictional mother from Minneapolis we introduced at thebeginning of Chapter 4. Citizens must pay a larger proportion of the cost forday care, health care, or retirement out of their current income. The ratio ofprivate to public spending devoted to welfare is thus greater in conservativeregimes. Political scientist Jacob Hacker found that citizens in conservativeregimes (excluding the U.S. and including Australia and the United King-dom) spend more on welfare (13.4 percent of GDP) through the private sec-tor than either social democratic (4.1 percent) or Christian democratic


Table 5.6 Welfare Spending as a percent of GDP in Rich Democracies

Public social expenditure as percent

Country of GDP



Public social expenditure as percent

Country of GDP


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regimes (9.3 percent). The conservative score would have been even higherif it had included the United States, because the U.S. spent more than twicethe average share of spending devoted to private benefits (33.9 percent) thanits other conservative counterparts.38

Thus, we find our three countries clustering around a set of welfare poli-cies that include low levels of public spending on welfare in which meagerbenefits are distributed predominantly to the poor. The circumstances ofthose who are not poor are determined more through the private than thepublic sector; by their different fortunes on the labor market than by theirshared fates as citizens. The wealthy find such policies amenable because thesmall fiscal costs of the welfare state limit their taxes, and they can afford topurchase privately a level of services that fits the size of their wallets.

InstitutionsWhile countries regarded as social democratic regimes all had similar insti-tutional structures, the state displays a great variety of forms among the con-servative family of nations. For example, both Canada and the U.S. arefederal systems, with their power divided between national and subnationalunits. The provinces in Canada and the states in the U.S. have the authorityto make policy in areas reserved for them. Ireland, on the other hand, is aunitary state. Decentralization in Ireland does not take the form of movingpower down from the national to the local level, but of moving state officesout of Dublin, the capital, and into the provinces.

At the national level, both Canada and Ireland are parliamentary regimes,while the U.S. has a presidential system.39 Legislatures are not an effectivecheck on the executive in either Canada or Ireland due to strong party dis-cipline and weak internal committee structures. This contrasts with the situ-ation in the U.S., where Congress can be an effective counterweight to theexecutive. All three conservative regimes are bicameral, with a Senate as thesecond legislative chamber. But that is where the resemblance ends. In bothCanada and Ireland the Senate is weak, with power only to delay legislation.In the U.S., by contrast, the Senate is a powerful second chamber. Differ-ences are also apparent in electoral rules. Ireland has a form of proportionalrepresentation, while candidates who receive the most votes in Canada andthe U.S. are declared the winner.40 Finally, while judicial review is commonto all three conservative regimes, it is much stronger in Canada and the U.S.than it is in Ireland.41 In sum, then, the constitutional structures of conser-vative regimes display a great deal of variety. This is reflected in differencesof political centralization among them. Researchers coded the Irish consti-tutional structure at the bottom, indicating that it was highly centralized,including few veto points; Canada was coded in the middle of the pack; whilethe U.S. received the highest value of any of our countries, indicating that it


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Whether conservative regimes have succeeded in finding the formula forthe good society cannot be gleaned simply from either GDP figures, as theirproponents would offer, or inequality levels, as their detractors might assert.The answer, as we argued in Chapter 1, lies in the degree to which theseregimes enhance the capability of their citizens. We compare their perfor-mance according to this standard following our review of the third model,Christian democratic regimes.

CHRISTIAN DEMOCRATIC REGIMESPoliticsWe described the politics of social democratic regimes as based upon the pre-ponderant power of the labor movement. Social democratic parties weredominant and unions were encompassing and centralized. We then showedthat the opposite was the case in conservative regimes. Business, not labor,typically enjoyed preponderant power in these regimes, which are marked byweak class identification, low levels of class voting, low union density, anddecentralized unions. In some ways, the Christian democratic model is inbetween these two extremes; in other ways, it is outside this polarityaltogether.

Christian democratic regimes exist where political conflict is organizedaround both class and church-state cleavages. Consequently, the competitionbetween Christian democratic and social democratic parties is very close insuch countries. Countries with this particular blend of political conflict andorganization include Austria, Belgium, Germany, and the Netherlands.

While Christian democratic parties are often the largest in these coun-tries and are frequently in the governing coalition, they are not dominant inany of them. They do not vastly outpoll all other parties the way social demo-cratic parties do in Scandinavia. In Belgium, for example, the Parti SocialChretién (PSC) in Francophone Wallonia and the Flemish Christian Democ-rats (CVP) in Flanders usually receive about 20 percent of the vote, as doesthe Christian Democratic Appeal (CDA) in the Netherlands. With the votesometimes split among as many as 10 parties in these countries, such returnsare sometimes enough to give the Christian Democrats a plurality withinthem. But the influence of these parties in Belgium and the Netherlands isnot so much due to their popularity as it is to their frequency in government.Christian democratic parties in the Netherlands, for example, have been inevery ruling coalition from 1918 to 2005, with just one short interruption,often holding the most important ministerial posts. In Belgium, they haveheld a near monopoly on the prime minister’s office, serving as part of theruling coalition for 40 years until they were ousted finally in 1999. Christian

Christian Democratic Regimes 135

was the least centralized of all. Strong federalism, bicameralism, an indepen-dent Congress, weak parties, and judicial review make it comparatively easyfor minorities in the U.S. to capture one part of the state and use it to thwartthe will of the majority.42

While conservative regimes exhibit a diversity of state structures, theirinterest group structures display a remarkable similarity. They all have plu-ralist systems in which a variety of interest groups compete for members;membership is voluntary and highly fluid; power is decentralized within orga-nizations so that they cannot sanction their members; and many potentialmembers are unrepresented. For example, while labor unions loom large inthe institutional landscape of social democracy, they are peripheral in con-servative regimes. The proportion of the workforce organized into unions islower than in all social democratic countries and most Christian democraticones. Not only is the union movement smaller, but also it is less centralized.43

The central trade union federation in conservative regimes lacks leverage overits affiliates, making coordination among different unions difficult.44 Thesame is true of employer organizations. There are a variety of employergroups that compete for members, they lack sanctions over those who join,and many businesses remain outside their sphere. One group of researchersgave the lowest values, indicating the least centralized employer organiza-tions, to all three of our conservative regimes, while none of the othersreceived such low scores.45 Given the pluralist structure of employer andunion organizations, it is not surprising to find that conservative regimesaveraged appreciably lower scores (1.4) on the Corporatism Index given inTable 4.5 on page ••• than either Christian democratic (3.8) or social demo-cratic regimes (4.1). Ireland, which received the highest score of any con-servative regime, was still lower on the Corporatism Index than all the othersocial democratic and Christian democratic regimes.

Just as we saw that despair over the future of social democratic regimesis unwarranted, so is the celebration over the record of conservative regimes.Their economic success has not been without costs, most painfully seen inrising levels of inequality. In Ireland, the fruits of the “Celtic Tiger,” of theeconomy’s strong performance, were mostly captured by capitalists in theform of rising profits and not by workers in the form of rising wages. “As theclass distribution of incomes shifted in favor of capital, individual incomesbecame more unequal,” according to Denis O’Hearn.46 Ireland’s wageinequality, which was already the highest in what was then the 16 countriesin the European Union, became even more unequal in the 1990s. Inequal-ity also grew in Canada and the United States. In a comparative study of wageinequality in 15 advanced industrialized democracies, two political scientistsfound that Canada and the United States “clearly constituted a group untothemselves, distinguished by very high levels of wage inequality.”47


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Whether conservative regimes have succeeded in finding the formula forthe good society cannot be gleaned simply from either GDP figures, as theirproponents would offer, or inequality levels, as their detractors might assert.The answer, as we argued in Chapter 1, lies in the degree to which theseregimes enhance the capability of their citizens. We compare their perfor-mance according to this standard following our review of the third model,Christian democratic regimes.

CHRISTIAN DEMOCRATIC REGIMESPoliticsWe described the politics of social democratic regimes as based upon the pre-ponderant power of the labor movement. Social democratic parties weredominant and unions were encompassing and centralized. We then showedthat the opposite was the case in conservative regimes. Business, not labor,typically enjoyed preponderant power in these regimes, which are marked byweak class identification, low levels of class voting, low union density, anddecentralized unions. In some ways, the Christian democratic model is inbetween these two extremes; in other ways, it is outside this polarityaltogether.

Christian democratic regimes exist where political conflict is organizedaround both class and church-state cleavages. Consequently, the competitionbetween Christian democratic and social democratic parties is very close insuch countries. Countries with this particular blend of political conflict andorganization include Austria, Belgium, Germany, and the Netherlands.

While Christian democratic parties are often the largest in these coun-tries and are frequently in the governing coalition, they are not dominant inany of them. They do not vastly outpoll all other parties the way social demo-cratic parties do in Scandinavia. In Belgium, for example, the Parti SocialChretién (PSC) in Francophone Wallonia and the Flemish Christian Democ-rats (CVP) in Flanders usually receive about 20 percent of the vote, as doesthe Christian Democratic Appeal (CDA) in the Netherlands. With the votesometimes split among as many as 10 parties in these countries, such returnsare sometimes enough to give the Christian Democrats a plurality withinthem. But the influence of these parties in Belgium and the Netherlands isnot so much due to their popularity as it is to their frequency in government.Christian democratic parties in the Netherlands, for example, have been inevery ruling coalition from 1918 to 2005, with just one short interruption,often holding the most important ministerial posts. In Belgium, they haveheld a near monopoly on the prime minister’s office, serving as part of theruling coalition for 40 years until they were ousted finally in 1999. Christian


ndepen-ely easy

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regimesegimes. seen in” of thes in the “As thencomes’s wageountriesnequal-of wagecientistsup unto

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socialist party losses have been less spectacular. In Austria, the People’s Partyand the Social Democrats used to command 80 to 90 percent of the totalvote between them. Today, they poll about 60 to 70 percent, with the restof the vote now split among other parties. In Germany, the dominance ofthe Christian Democrats and Social Democrats also shows signs of erosion.Their share of the vote has declined from a high of 91 percent in 1976 toabout 70 percent in 2005. The decline of religious and class parties has ledto a profusion of new parties in the Netherlands and Belgium. New partieshave also emerged in Germany and Austria, despite the relative high barriersto winning parliamentary representation. In Germany, for example, theGreens introduced new issues of ecology and post-materialism that the twomajor parties previously dismissed. Similarly, in Austria, the emergence of theFreedom Party raised new issues of immigration and multiculturalism.51

Christian democratic regimes are found where political conflict is orga-nized around class and church-state cleavages, the latter give rise to Christ-ian democratic parties, which attract a broad cross-section of voters. But theprominence of these cleavages is waning as political conflict in these regimeshas become more fractured and volatile with the emergence of new partiesand issues.52 Church-state and class cleavages no longer structure the vote asefficiently as they once did in the past.

PoliciesBig government prevails in Christian democratic regimes, though not as bigas one finds in the social democratic model. While government expendituresas a proportion of GDP averaged 52.4 percent in the Scandinavian countries,and 37.1 percent in our conservative regimes, it was 48.1 percent in ourChristian democratic countries. Austria ranked fourth, Belgium fifth, Ger-many sixth, and the Netherlands ninth in terms of government spendingamong the 19 rich democracies. Christian democratic regimes also rankedcloser to social democratic countries than to conservative regimes when itcame to tax burdens. Total tax revenue as a percentage of GDP averaged 59.3percent in social democratic countries, 48.5 percent in Christian democraticregimes, and 38 percent in conservative societies.53 In summary, then, Chris-tian democratic regimes tend to be high tax-and-spend states; not as high asin Scandinavia, but they are certainly more comfortable with a large state sec-tor consuming and spending resources than conservative regimes.

Welfare expenditures consume a large proportion of the money thatChristian democratic regimes collect and spend. The extent of their welfareeffort—the proportion of GDP devoted to public social expenditures—againplaced them closer to the social democratic than the conservative model. Wel-fare expenditures averaged 29 percent of GDP in Christian democraticregimes, while they averaged 33.9 percent for social democratic regimes and


democratic party frequency in government in Belgium and the Netherlandsis due to two factors. First, these parties have been able to attract a cross-sec-tion of workers, farmers, shopkeepers, and business executives to createcatch-all parties that are centrist in their orientation.48 The broad nature oftheir electorate makes it easier for them to move either left or right whenseeking coalition partners to form a government,49 and their size and loca-tion in the middle of the political spectrum make them likely partners in anyruling coalition.50 Consequently, Christian Democrats are the natural partyof government in Belgium and the Netherlands due to their broad electorateand strategic position as centrist pasrties.

While Christian democratic parties are frequently in government in Bel-gium and the Netherlands, the paradigmatic cases of Christian democraticregimes are in Germany and Austria. Church-state and class cleavages struc-ture the electorate more in these countries than in Belgium and the Nether-lands. Similar to their fraternal parties in Belgium and the Netherlands, theGerman Christian Democratic Union (CDU) and its Bavarian sister party theChristian Social Union (CSU) often receive a plurality of the vote, generallyaround 30 to 40 percent. The same is true for the People’s Party in Austria(ÖVP). Like their brethren in Belgium and the Netherlands, these partiesproject a nonideological, pragmatic, Christian image that attracts votes froma variety of social groups. The reason why Christian democratic and socialdemocratic parties poll better in Austria and Germany than in Belgium andthe Netherlands has to do with the prominence of other sorts of cleavages inthe latter, but also differences in electoral rules. All of our Christian democ-ratic regimes award legislative seats based upon proportional representationformulas. But parties in Austria must win at least 4 percent of the vote, andin Germany 5 percent, before they qualify for legislative seats, before theywill be awarded seats according to their proportion of the total vote. In con-trast, the Netherlands and Belgium have minimal barriers for smaller partiesto overcome before being given seats according to proportional representa-tion. As a result, both the Netherlands and Belgium have many more partiescompeting and winning seats, drawing off more voters from Christian demo-cratic and social democratic parties than in Austria and Germany. Ironically,then, even though Christian democratic parties poll better in Germany andAustria they are less frequently in government than in Belgium and theNetherlands.

Today, the religious and class cleavages that previously defined partycompetition in Christian democratic regimes are not as prominent as theyonce were. The rise of new parties and issues has reduced the grip that theChristian democrats and social democrats together had on voters. Christiandemocratic parties in Belgium and the Netherlands that once received 40percent of the vote in the 1960s now routinely receive half that, while


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socialist party losses have been less spectacular. In Austria, the People’s Partyand the Social Democrats used to command 80 to 90 percent of the totalvote between them. Today, they poll about 60 to 70 percent, with the restof the vote now split among other parties. In Germany, the dominance ofthe Christian Democrats and Social Democrats also shows signs of erosion.Their share of the vote has declined from a high of 91 percent in 1976 toabout 70 percent in 2005. The decline of religious and class parties has ledto a profusion of new parties in the Netherlands and Belgium. New partieshave also emerged in Germany and Austria, despite the relative high barriersto winning parliamentary representation. In Germany, for example, theGreens introduced new issues of ecology and post-materialism that the twomajor parties previously dismissed. Similarly, in Austria, the emergence of theFreedom Party raised new issues of immigration and multiculturalism.51

Christian democratic regimes are found where political conflict is orga-nized around class and church-state cleavages, the latter give rise to Christ-ian democratic parties, which attract a broad cross-section of voters. But theprominence of these cleavages is waning as political conflict in these regimeshas become more fractured and volatile with the emergence of new partiesand issues.52 Church-state and class cleavages no longer structure the vote asefficiently as they once did in the past.

PoliciesBig government prevails in Christian democratic regimes, though not as bigas one finds in the social democratic model. While government expendituresas a proportion of GDP averaged 52.4 percent in the Scandinavian countries,and 37.1 percent in our conservative regimes, it was 48.1 percent in ourChristian democratic countries. Austria ranked fourth, Belgium fifth, Ger-many sixth, and the Netherlands ninth in terms of government spendingamong the 19 rich democracies. Christian democratic regimes also rankedcloser to social democratic countries than to conservative regimes when itcame to tax burdens. Total tax revenue as a percentage of GDP averaged 59.3percent in social democratic countries, 48.5 percent in Christian democraticregimes, and 38 percent in conservative societies.53 In summary, then, Chris-tian democratic regimes tend to be high tax-and-spend states; not as high asin Scandinavia, but they are certainly more comfortable with a large state sec-tor consuming and spending resources than conservative regimes.

Welfare expenditures consume a large proportion of the money thatChristian democratic regimes collect and spend. The extent of their welfareeffort—the proportion of GDP devoted to public social expenditures—againplaced them closer to the social democratic than the conservative model. Wel-fare expenditures averaged 29 percent of GDP in Christian democraticregimes, while they averaged 33.9 percent for social democratic regimes and


herlandsoss-sec-o createature ofht whennd loca-rs in anyal partyectorate

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reinforce class differences. On the other hand, in contrast to conservativewelfare states, citizens in Christian democratic regimes do not have tofinance their pension privately. The state provides a framework for gener-ous pensions, which replaces a large percentage of the former incomes ofretired persons.56

InstitutionsThe constitutional structures of Christian democratic regimes are not as dif-ferent from one another as conservative regimes, nor are they as similar toeach other as those found in social democratic regimes. All of them are par-liamentary democracies in which legislative majorities empower the execu-tive and select the ruling government.57 But there are still notable differencesamong them. For example, although all Christian democratic regimes havebicameral legislatures, only Germany invests its second chamber, theBundesrat, with real power, just like the Senate in the American Congress.58

While the Netherlands has no judicial review, and Belgium and Austria haveonly a mild form of it, Germany approaches the American standard in thedegree to which courts can nullify duly passed laws as unconstitutional.59

Finally, Germany most reflects the federal structure of the U.S. The länderin Germany, like the states in the U.S., have reserved powers, elect their ownofficials, and raise their own revenue. Belgium also was rated highly on a scaleof federalism, followed closely by Austria and then the Netherlands. All ofthe social democratic regimes were ranked below them, indicating a clear dif-ference between these two regimes in this regard.60

Christian democratic regimes have corporatist interest group systems,like social democratic regimes and unlike the pluralist systems found in theconservative model. According to political scientists Arend Lijphart andMarkus L. Crepaz, “Austria is widely regarded as the ‘paradigm’ case of cor-poratism.”61 Organizations representing workers, farmers, and employersenjoy a monopoly of representation in their sectors, which the Austrian statereinforces by making membership in them obligatory. They are all deeplyengaged in economic policy-making through their participation in the JointCommission for Wages and Prices.

Corporatism prevails in Germany and the Netherlands as well. Groupsare organized into a limited number of hierarchically structured associations,and these organizations are recognized by the state and invited to participatein the policy-making process affecting their interests. The state, for its part,plays an unobtrusive role, content to provide a broad legal framework inwhich the two groups could find mutually agreeable settlements. Only Bel-gium among our Christian democratic regimes does not project a strongbrand of corporatism. But it still ranks higher on the scale of corporatism inTable 4.5 than any of the conservative regimes.62


just 18.7 percent in conservative countries.54 Christian democratic regimesdo not occupy a top position nor do they lag notably behind in any particu-lar social program. They are above the average of rich democracies in regardto spending on health and pensions, while their expenditures on poverty andsocial services are a bit below average. Replacement rates for income lost dueto retirement or unemployment are lower than in social democratic regimesbut higher than those provided in conservative countries.

Christian democratic welfare states do not offer the kinds of collectiveservices found in social democratic regimes. For example, the state does notprovide medical care, day care, or other services directly to citizens. Instead,Christian democratic welfare states provide generous transfer payments orcash benefits to citizens. Consequently, even though a big spender, publicsector employment as a proportion of the total labor force in Christian demo-cratic regimes (9.16 percent) is even lower than the average for conservativeregimes (10.40 percent) and much less than in social democratic regimes,where public employment makes up 22.35 percent of the labor force on aver-age.55 Thus, the state sector in Christian democratic regimes has an ambigu-ous quality to it. It has a large presence fiscally, collecting a lot in taxes andspending a lot of money, but a small presence socially. Little effort is madeby Christian democratic regimes to use the vast fiscal resources at their dis-posal to provide services that would act as an alternative to the market, asoccurs in social democratic regimes. Instead, the goals of social policy inChristian democratic countries are twofold. First, they seek to reinforce tra-ditional family values by providing enough income security for a family sothat women can perform their traditional domestic role within it. Second,they seek to mitigate the effects of inequality.

Welfare programs are not unified and run by the state, but are man-aged jointly by union and employer representatives for each sector of theeconomy. Participation is compulsory, and because programs are adminis-tered on an occupational basis, the benefits they distribute tend to preservedifferentials among them. In Austria, for example, pension programs forpublic employees, manual workers, salaried employees, miners, farmers, andthe self-employed are administered separately, with the state providing onlygeneral supervision of the self-governing agencies in charge of these pro-grams. Civil servants receive larger pensions than salaried employees who,in turn, receive larger pensions than manual workers. In contrast to socialdemocratic welfare states, Christian democratic social programs, such aspensions, do not bind citizens together. Instead, Christian democratic pen-sion systems segment citizens according to occupation. The separation ofpension programs along occupational lines subverts solidarity because allcitizens do not participate in one public pension program and it under-mines equality because different pension programs based on occupation


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reinforce class differences. On the other hand, in contrast to conservativewelfare states, citizens in Christian democratic regimes do not have tofinance their pension privately. The state provides a framework for gener-ous pensions, which replaces a large percentage of the former incomes ofretired persons.56

InstitutionsThe constitutional structures of Christian democratic regimes are not as dif-ferent from one another as conservative regimes, nor are they as similar toeach other as those found in social democratic regimes. All of them are par-liamentary democracies in which legislative majorities empower the execu-tive and select the ruling government.57 But there are still notable differencesamong them. For example, although all Christian democratic regimes havebicameral legislatures, only Germany invests its second chamber, theBundesrat, with real power, just like the Senate in the American Congress.58

While the Netherlands has no judicial review, and Belgium and Austria haveonly a mild form of it, Germany approaches the American standard in thedegree to which courts can nullify duly passed laws as unconstitutional.59

Finally, Germany most reflects the federal structure of the U.S. The länderin Germany, like the states in the U.S., have reserved powers, elect their ownofficials, and raise their own revenue. Belgium also was rated highly on a scaleof federalism, followed closely by Austria and then the Netherlands. All ofthe social democratic regimes were ranked below them, indicating a clear dif-ference between these two regimes in this regard.60

Christian democratic regimes have corporatist interest group systems,like social democratic regimes and unlike the pluralist systems found in theconservative model. According to political scientists Arend Lijphart andMarkus L. Crepaz, “Austria is widely regarded as the ‘paradigm’ case of cor-poratism.”61 Organizations representing workers, farmers, and employersenjoy a monopoly of representation in their sectors, which the Austrian statereinforces by making membership in them obligatory. They are all deeplyengaged in economic policy-making through their participation in the JointCommission for Wages and Prices.

Corporatism prevails in Germany and the Netherlands as well. Groupsare organized into a limited number of hierarchically structured associations,and these organizations are recognized by the state and invited to participatein the policy-making process affecting their interests. The state, for its part,plays an unobtrusive role, content to provide a broad legal framework inwhich the two groups could find mutually agreeable settlements. Only Bel-gium among our Christian democratic regimes does not project a strongbrand of corporatism. But it still ranks higher on the scale of corporatism inTable 4.5 than any of the conservative regimes.62


regimesparticu-n regarderty andlost dueregimes

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more subtle and discerning measures than those commonly used to comparedeveloped and less developed societies.

Physical Well-beingThe poor exist even in rich democracies. The basic needs of some citizens inthese countries often go unmet, despite the wealth that these societies gen-erate. But measuring who is poor and how many are poor is quite tricky. TheWorld Bank and United Nations define the poor as those who live on lessthan one or two dollars a day. By this standard, hardly anyone in rich democ-racies would qualify as poor. In order to compute the poverty rate, the pro-portion of their citizens who are poor, some rich democracies create a povertyline, a level of income required to afford the bare necessities. Those who fallbelow that line are then defined as poor. For example, the poverty line for asingle member household in the U.S. was $8,350 in 2000; for a family offour it was about $17,850. The problem is that the U.S. is the only countryin our comparison group that calculates a poverty rate based upon the num-ber of households who fall below an “official” income threshold.63 But LyleScruggs and James P. Allen have taken the income limit used to definepoverty in the U.S. and estimated what the poverty rate would be in othercountries if they adopted the same threshold. They next equalized purchas-ing power among countries, so that the income threshold used to define whois poor in Sweden or Austria would be comparable to that of the U.S. Table5.7 gives the absolute poverty rates for countries that compose our threeregime types.

According to Table 5.7, Social democratic regimes performed best interms of providing for the physical needs of their citizens, but this was due

Comparing Capability 141

Like the other regimes we have discussed, the Christian democraticmodel is under pressure today as a result of their unique combination of pol-itics, policy, and institutions. Politically, Christian democratic and socialdemocratic parties together no longer dominate the vote as they once did.New parties articulating new issues now pose challenges to them, wideningthe possibilities for building coalitions. In 1999, the People’s Party in Aus-tria looked to its right for the first time to form a coalition with the FreedomParty, while the Social Democrats in Germany looked to their left for the firsttime in 1998 to form a coalition with the Greens. While corporatism remainsvibrant in the Netherlands and Austria, it is unraveling in Germany. Declin-ing union density has weakened unions, while business associations have alsosuffered defections. Slow economic growth has made it harder for represen-tatives of labor and capital to make compromises within their organizationsas well as between them. Finally, the Christian democratic welfare state is ill-suited to address the problems it now faces. The welfare state was designedto alleviate the risks of people in the labor force. But the problem in Christ-ian democratic regimes is that many people, such as single parents, youngpeople, and immigrants, are outside the workforce and cannot get in. Laborforce participation rates among adults are lower in Christian democraticregimes than in both the social democratic and conservative models, with theexception of Ireland. A generous welfare system organized on occupationallines and premised on inclusion in the workforce is unresponsive to thosewho need it most.

COMPARING CAPABILITYComparing capabilities among developed countries is more difficult thancomparing capabilities between developed and less developed countries. Thegap between developed and developing countries in protecting citizens fromharm and meeting their basic physical needs for food, shelter, and health careis often glaring. While virtually all advanced industrialized countries aredemocracies, many less developed societies are not. Furthermore, developedand developing countries differ greatly in the extent to which they equip theircitizens with the ability to make informed decisions about their lives. Thesecontrasts are familiar to us as are the measures used to capture these differ-ences. But these measures are not very revealing when used to compare capa-bilities among rich democracies. Life expectancy averages more or less 77years in all three types of regimes; adult literacy hovers around 99 percent inall three; and all of the postindustrial societies we examined so far have demo-cratic politics systems with free, open, and competitive elections. In order tocompare capabilities meaningfully among our three types of regimes we need


Table 5.7 Absolute Poverty Rates of Selected Countries

Poverty Country rate

Denmark (2000) 7.3Norway (2000) 2.6Sweden (2000) 7.9Social Democratic Average 5.9

Austria (1997) 6.3Belgium (1997) 7.2Germany (2000) 7.0Netherlands (1999) 7.4Christian Democratic Average 7.0

Source: Lyle Scruggs and James P. Allen, “The Material Consequences of Welfare States: Benefit Generosity andAbsolute Poverty in 16 OECD Countries,” Comparative Politics Studies Vol. 39, No. 7 (September 2006), p. 884.

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more subtle and discerning measures than those commonly used to comparedeveloped and less developed societies.

Physical Well-beingThe poor exist even in rich democracies. The basic needs of some citizens inthese countries often go unmet, despite the wealth that these societies gen-erate. But measuring who is poor and how many are poor is quite tricky. TheWorld Bank and United Nations define the poor as those who live on lessthan one or two dollars a day. By this standard, hardly anyone in rich democ-racies would qualify as poor. In order to compute the poverty rate, the pro-portion of their citizens who are poor, some rich democracies create a povertyline, a level of income required to afford the bare necessities. Those who fallbelow that line are then defined as poor. For example, the poverty line for asingle member household in the U.S. was $8,350 in 2000; for a family offour it was about $17,850. The problem is that the U.S. is the only countryin our comparison group that calculates a poverty rate based upon the num-ber of households who fall below an “official” income threshold.63 But LyleScruggs and James P. Allen have taken the income limit used to definepoverty in the U.S. and estimated what the poverty rate would be in othercountries if they adopted the same threshold. They next equalized purchas-ing power among countries, so that the income threshold used to define whois poor in Sweden or Austria would be comparable to that of the U.S. Table5.7 gives the absolute poverty rates for countries that compose our threeregime types.

According to Table 5.7, Social democratic regimes performed best interms of providing for the physical needs of their citizens, but this was due


mocraticn of pol-d socialnce did.idening in Aus-reedomthe firstremainsDeclin-ave also

epresen-izationsate is ill-esigned Christ-, young

n. Labormocraticwith thepationalo those

ult thanies. Thens from

alth careries arevelopeduip theirs. Thesee differ-re capa- less 77rcent ine demo-order towe need

Table 5.7 Absolute Poverty Rates of Selected Countries


Denmark (2000) 7.3Norway (2000) 2.6Sweden (2000) 7.9Social Democratic Average 5.9

Austria (1997) 6.3Belgium (1997) 7.2Germany (2000) 7.0Netherlands (1999) 7.4Christian Democratic Average 7.0


Canada (2000) 6.5Ireland (2000) 15.4United States (2000) 8.7Conservative Average 10.2

Source: Lyle Scruggs and James P. Allen, “The Material Consequences of Welfare States: Benefit Generosity andAbsolute Poverty in 16 OECD Countries,” Comparative Politics Studies Vol. 39, No. 7 (September 2006), p. 884.

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among Christian democratic regimes were about equivalent to those ofCanada, which performed best of all the conservative regimes. The worst lit-eracy scores were earned by citizens of the two other conservative regimes,the United States and Ireland. In Ireland, more than half of the adults failedto attain even level three skills that experts consider the minimum necessaryfor successful functioning in modern society.66

SafetyUnlike some developing societies, where political violence and civil war posereal threats to safety for their citizens, rich democracies do not suffer fromsuch turbulence. Citizens in our sample of countries have little to fear frompolitical persecution or civil strife on a massive scale. But physical safetyremains an issue nonetheless, due to the prevalence of violent crimes, suchas homicides, sex offences, and serious assaults. However, comparing crimestatistics is even more fraught with problems of comparability across coun-tries than measuring poverty. Official police statistics reflect different wayscountries define, report, record, and count crime. Because police statisticsare so unreliable, we will restrict ourselves to homicides, which offer the mostreliable violent crime statistic for international comparisons. People tend toreport murders, the police tend to record them, and being dead has the samemeaning everywhere. Homicide rates provide a rough measure of how wellstates succeed in providing a safe environment for their citizens. Table 5.9records the homicide rates for our selected countries below.


entirely to the very low rate of absolute poverty in Norway. Conservativeregimes had the highest rate of absolute poverty, with Ireland as much of anoutlier at the high end of the scale as Norway was at the low end. The U.S.recorded the second highest rate of absolute poverty, while Canada had thethird lowest rate and performed more like the other countries than its otherconservative counterparts who brought up the rear. These results are far fromdefinitive for a number of reasons. First, absolute poverty rates are based onlyupon income. They do not include services that citizens receive free from thestate, such as health care. Second, our averages are deceptive because so fewcountries are used to compute them. If you take the two outliers, Norwayand Ireland, out of the equation, Christian democratic regimes performedbetter than the other two regimes that finished equal lengths behind them.Given the dispersion of countries representing different regimes along ourstandard, any generalization about regime performance should be viewedwith caution. Aside from the clear fact that Norway does a much better joband Ireland a much worse job of meeting the physical needs of their citizens,it is unclear that citizens are better off in one regime than another.

Informed Decision-makingVirtually all adults in rich democracies are literate. As we noted before, liter-acy rates are about 99 percent in all of the countries representing all of theregime types in our sample of rich democracies. A more demanding check ofhow well countries prepare their citizens to make informed decisions wouldbe to examine the ability of citizens “to understand and employ printed infor-mation in daily activities, at home, at work and in the community—to achieveone’s goals, and to develop one’s knowledge and potential.”64 In 1998, theInternational Adult Literacy Survey (IALS) did just that.

The IALS assessed literacy skills in three areas and then citizens weregraded according to five levels. Level one included people with poor skillswho were functionally illiterate. Level two included people who could onlycope with material that was simple and familiar, and found it difficult torespond to new demands. Level three was considered “a minimum for cop-ing with demands of everyday life and work in a complex, advanced soci-ety,”65 while levels four and five included respondents who were veryproficient at processing information. Table 5.8 gives the proportion of citi-zens whose average scores across the three literacy skills placed them intoeither level one or two.

These results indicate that even in rich democracies a substantial minor-ity of adults are severely deficient in literacy skills. The best performanceoccurred in social democratic regimes where generally only one-third of alladults performed at the lowest levels of competency. Every Christian demo-cratic country scored worse than every social democratic regime. The results


Table 5.8 Literacy Skills

% of Citizens with Averaged Literacy Scores at Levels One

Country or Two

Denmark 35Norway 31Sweden 27Social Democratic Average 31

Germany 40Belgium (Flanders) 42Netherlands 38Austria NAChristian Democratic Average 40

Source: OECD/HRDC, Literacy in the Information Age: Final Report of the International Adult Literacy Survey,”(Paris: Organization for Economic Cooperation and Development; and Ottawa: Human Recourses Develop-ment Canada, 2000), pp. 15-21.

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among Christian democratic regimes were about equivalent to those ofCanada, which performed best of all the conservative regimes. The worst lit-eracy scores were earned by citizens of the two other conservative regimes,the United States and Ireland. In Ireland, more than half of the adults failedto attain even level three skills that experts consider the minimum necessaryfor successful functioning in modern society.66

SafetyUnlike some developing societies, where political violence and civil war posereal threats to safety for their citizens, rich democracies do not suffer fromsuch turbulence. Citizens in our sample of countries have little to fear frompolitical persecution or civil strife on a massive scale. But physical safetyremains an issue nonetheless, due to the prevalence of violent crimes, suchas homicides, sex offences, and serious assaults. However, comparing crimestatistics is even more fraught with problems of comparability across coun-tries than measuring poverty. Official police statistics reflect different wayscountries define, report, record, and count crime. Because police statisticsare so unreliable, we will restrict ourselves to homicides, which offer the mostreliable violent crime statistic for international comparisons. People tend toreport murders, the police tend to record them, and being dead has the samemeaning everywhere. Homicide rates provide a rough measure of how wellstates succeed in providing a safe environment for their citizens. Table 5.9records the homicide rates for our selected countries below.


ervativech of anhe U.S.had thets otherfar fromsed onlyrom thee so fewNorwayrformedd them.ong our viewedtter jobcitizens,

re, liter-ll of thecheck ofs would

ed infor- achieve

998, the

ns wereor skillsuld onlyicult tofor cop-ed soci-re very

n of citi-em into

minor-rmancerd of alln demo-e results

Table 5.8 Literacy Skills


Country or Two

Denmark 35Norway 31Sweden 27Social Democratic Average 31

Germany 40Belgium (Flanders) 42Netherlands 38Austria NAChristian Democratic Average 40


Country or Two

Canada 42Ireland 54United States 47Conservative Average 48

Source: OECD/HRDC, Literacy in the Information Age: Final Report of the International Adult Literacy Survey,”(Paris: Organization for Economic Cooperation and Development; and Ottawa: Human Recourses Develop-ment Canada, 2000), pp. 15-21.

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variety of sources by the World Bank Governance Indicators Dataset, andaggregates “several indicators of the political process, including the selectionof governments, with indicators of civil liberties and political rights, and pressfreedom and independence.”67 This will be our measure of the quality ofdemocracy in our set of rich democracies. Countries were scored on a –2.50to 2.50 scale on this index. The higher a country’s score, the more its citi-zens were deemed to have “voice and accountability.”

According to this measure, the quality of democracy is better in socialdemocratic regimes than in the alternatives. Social democratic regimes occu-pied three out of the top four spots on this indicator. After that, Christiandemocratic regimes and conservative regimes performed similarly, with somecountries, such as the Netherlands and Ireland, raising the average for theirregimes and others, such as Belgium and the United States, bringing it down.

These results are confirmed if we use a different, more objective measureof the quality of democracy, such as turnout in elections. Voter turnout ishigher in social democratic regimes than is the case in either Christian demo-cratic or conservative regimes.68

In conclusion, we can say that people’s capability depends upon the typeof regime in which they live. Some regimes are better able to create condi-tions that enhance the capability of their citizens more than others. Specifi-cally, social democratic regimes generally performed better in meeting thestandards of the good society than either Christian democratic or conserva-tive regimes. The quality of democracy was higher in these regimes; levels ofsafety and security were greater; and their citizens were more likely to pos-sess the skills they need to make informed decisions about their lives. How-ever, Christian democratic regimes performed marginally better than theother two when it came to meeting the physical needs of their citizens.


Once again, social democratic regimes performed better, with their citi-zens enjoying a safer environment than their counterparts in the other tworegimes. They tended to cluster toward the top of the rankings while con-servative regimes could generally be found toward the bottom half. Irelandwas at the average for Christian democratic regimes, while Canada was thirdfrom the bottom. The United States was a clear outlier, with a homicide ratethat was far greater than any of the other countries.

Civil and Political RightsAside from meeting the basic physical needs of citizens, helping them gainthe ability to make informed decisions about their lives, and protecting themfrom harm, the good society, we argued, also guarantees political and civilrights. These are available in all our countries. We need to compare the qual-ity of these rights within them, not whether they exist or not. We propose todo so by measuring the quality of their democratic practice.

Measuring the quality of democracy is even more controversial than mea-suring crime. The U.N. Human Development Report, however, ventured intothis delicate area and graded the quality of democracy in different countries,using five criteria. On four of them, no noteworthy differences were foundamong our countries: all of them scored similarly on press freedoms, politi-cal rights, civil liberties, and competitive elections. The fifth measure, whichis a composite of various indicators that includes some of those already men-tioned, is “Voice and Accountability.” This measure was compiled from a


Table 5.9 Safety in Rich Democracies

Homicides per 100,000 people/

average for per year,

Country 1999–2001



Homicides per 100,000 people/

average for per year,

Country 1999–2001


Source: Barclay, Gordon and Tavares, Cynthia. International Comparison of Criminal Justice Statistics 2001, Issue12.3 (Oct. 24, 2003). This can be found at www.ministerievanjustitie.nl:8080/b_organ/wodc/publications/ob212_fly.pdf.

Table 5.10 Quality of Democracy

Voice and accountability

Country score



Source: United Nations, Human Development Report, 2002, p. 38.

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variety of sources by the World Bank Governance Indicators Dataset, andaggregates “several indicators of the political process, including the selectionof governments, with indicators of civil liberties and political rights, and pressfreedom and independence.”67 This will be our measure of the quality ofdemocracy in our set of rich democracies. Countries were scored on a –2.50to 2.50 scale on this index. The higher a country’s score, the more its citi-zens were deemed to have “voice and accountability.”

According to this measure, the quality of democracy is better in socialdemocratic regimes than in the alternatives. Social democratic regimes occu-pied three out of the top four spots on this indicator. After that, Christiandemocratic regimes and conservative regimes performed similarly, with somecountries, such as the Netherlands and Ireland, raising the average for theirregimes and others, such as Belgium and the United States, bringing it down.

These results are confirmed if we use a different, more objective measureof the quality of democracy, such as turnout in elections. Voter turnout ishigher in social democratic regimes than is the case in either Christian demo-cratic or conservative regimes.68

In conclusion, we can say that people’s capability depends upon the typeof regime in which they live. Some regimes are better able to create condi-tions that enhance the capability of their citizens more than others. Specifi-cally, social democratic regimes generally performed better in meeting thestandards of the good society than either Christian democratic or conserva-tive regimes. The quality of democracy was higher in these regimes; levels ofsafety and security were greater; and their citizens were more likely to pos-sess the skills they need to make informed decisions about their lives. How-ever, Christian democratic regimes performed marginally better than theother two when it came to meeting the physical needs of their citizens.


heir citi-her twoile con- Ireland

was thirdcide rate

em gainng themand civilhe qual-opose to

an mea-red intountries,e founds, politi-e, whichdy men- from a

des per people/

ge for ear, 2001

77425692

001, Issuetions/

Table 5.10 Quality of Democracy


Country score




Country score


Source: United Nations, Human Development Report, 2002, p. 38.

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Otherwise, Christian democratic regimes generally took up a position in themiddle of the pack, while conservative regimes tended to perform worstaccording to the criteria and tests we utilized.

CONCLUSIONIn this chapter we argued that rich democracies can be placed into “familiesof nations” having similar regimes, or sets of politics, policies, and institu-tions. We then identified three regime types among rich democracies. Thefirst regime type we described was social democracy, found in Denmark, Nor-way, and Sweden. Social democratic parties were dominant within thesecountries, welfare states provided a comprehensive array of services that wereavailable to all citizens, and labor movements were powerful.

Conservative regimes, found in Canada, Ireland, and the United States,were in some ways the mirror image of social democratic regimes. If socialdemocracy was characterized by “big government,” the opposite was true inconservative regimes. State expenditures are a smaller proportion of GDPand the tax burden is lighter than elsewhere. Social democratic or labor par-ties are either absent or not very competitive, because political conflict doesnot revolve around class cleavages in these countries to the degree it doeselsewhere. In the absence of a challenge from the left in these regimes, busi-ness tends to be politically powerful. Finally, conservative regimes tend to beinstitutionally fragmented. There are many interest groups that compete formembers, they lack power to sanction their members, and they are notincluded in the policy-making process but try to influence it from the out-side through lobbying.

Christian democratic regimes are represented by Austria, Belgium, Ger-many, and the Netherlands. Politics in these regimes has been organizedaround class and religious cleavages, which are now giving way to new issuesthat have to do with post-materialism and multiculturalism. Christian demo-cratic parties are not the dominant party but they have a high frequency ingovernment. Chief among the policy legacies of Christian democratic partiesis the existence of a generous welfare state fragmented along occupationallines, in which benefits are related to earnings. The result is a welfare statethat preserves status differentials among different occupations. Institution-ally, Christian democratic regimes are corporatist. In contrast to conservativeregimes, people are organized into a limited number of hierarchically struc-tured organizations. These interest groups often are recognized by the gov-ernment and invited to participate in the policy-making process affectingtheir interests.

The chapter concluded by examining which of these regime types doesa better job at enhancing the capability of its citizens. We found that social

Conclusion 147146 CHAPTER 5 Regimes in Rich Democracies

IN-DEPTHMethodology

Just like the man who was pleased and surprised to learn he had been speakingprose all his life without realizing it, readers might be similarly delighted to learnthey have been doing comparative analysis all their life without knowing it. Wecompare, make evaluative judgments, all the time. Students compare the meritsof different colleges when they decide where to enroll. Men and womencompare the merits of potential partners when they decide whom to date. Andsports radio is full of callers debating whether Michael Jordan was the bestbasketball ever.

Instead of comparing colleges, potential dates, or basketball players,comparative politics analyzes different countries and seeks to explain theirsimilarities and differences. Comparative analysis begins with the precisedefinition of concepts. Defining terms ensures we have the same point in mindwhen we refer to it; that terms mean the same to the reader as they do to thewriter, no more and no less as Humpty Dumpty might say. Next, we formhypotheses, tentative explanations to the question we are trying to answer.Hypotheses frequently attribute some characteristic that we want to explain tosome cause. For example, in this chapter we are curious whether the goodsociety is a function of the type of regime. To form hypotheses we try to isolatethe dependent variable (what we are trying to explain) from the independentvariable (what we think explains it).

To find out whether social democratic, conservative, or Christian democraticregimes perform better in producing the good society we need to operationalizevariables. That is, we need to find some measurable, tangible, real-lifeapproximation for such concepts as meeting physical needs, ensuring safety,making informed decisions, and enjoying civil and political rights that we saiddefine the good society. We have done so here by using absolute poverty ratesas a proxy for meeting physical needs, homicide rates as a proxy for safety, andother stand-ins as proxies for our other concepts. Depending upon the way weoperationalize variables we may come up with different results. For example, ifwe used burglaries as a proxy for safety instead of homicides, we might arrive atdifferent results as to which regimes are safer.

Once we operationalize variables, we are in a position to make meaningfulcomparisons. We can compare the merits of different colleges we might enroll inby looking at their graduation rates and average SAT scores. We can comparethe merits of potential dates by looking at whether they more resemble Brad Pittor George Costanza from Seinfeld. And we can settle disputes over whetherMichael Jordan was the best basketball player ever by looking at his scoringaverage, assists/turnover ratio, and championships in comparison to otherplayers.

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Otherwise, Christian democratic regimes generally took up a position in themiddle of the pack, while conservative regimes tended to perform worstaccording to the criteria and tests we utilized.

CONCLUSIONIn this chapter we argued that rich democracies can be placed into “familiesof nations” having similar regimes, or sets of politics, policies, and institu-tions. We then identified three regime types among rich democracies. Thefirst regime type we described was social democracy, found in Denmark, Nor-way, and Sweden. Social democratic parties were dominant within thesecountries, welfare states provided a comprehensive array of services that wereavailable to all citizens, and labor movements were powerful.

Conservative regimes, found in Canada, Ireland, and the United States,were in some ways the mirror image of social democratic regimes. If socialdemocracy was characterized by “big government,” the opposite was true inconservative regimes. State expenditures are a smaller proportion of GDPand the tax burden is lighter than elsewhere. Social democratic or labor par-ties are either absent or not very competitive, because political conflict doesnot revolve around class cleavages in these countries to the degree it doeselsewhere. In the absence of a challenge from the left in these regimes, busi-ness tends to be politically powerful. Finally, conservative regimes tend to beinstitutionally fragmented. There are many interest groups that compete formembers, they lack power to sanction their members, and they are notincluded in the policy-making process but try to influence it from the out-side through lobbying.

Christian democratic regimes are represented by Austria, Belgium, Ger-many, and the Netherlands. Politics in these regimes has been organizedaround class and religious cleavages, which are now giving way to new issuesthat have to do with post-materialism and multiculturalism. Christian demo-cratic parties are not the dominant party but they have a high frequency ingovernment. Chief among the policy legacies of Christian democratic partiesis the existence of a generous welfare state fragmented along occupationallines, in which benefits are related to earnings. The result is a welfare statethat preserves status differentials among different occupations. Institution-ally, Christian democratic regimes are corporatist. In contrast to conservativeregimes, people are organized into a limited number of hierarchically struc-tured organizations. These interest groups often are recognized by the gov-ernment and invited to participate in the policy-making process affectingtheir interests.

The chapter concluded by examining which of these regime types doesa better job at enhancing the capability of its citizens. We found that social

Conclusion 147

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democratic regimes performed better than the other alternatives in three ofour four tests: guaranteeing political and civil rights, protecting citizens fromharm, and ensuring their citizens have the skills to make informed decisions.(It was unclear that regime type had a decisive impact on our fourth test,meeting the physical needs of citizens.) Christian democratic regimes oftenperformed next best on these indicators while conservative regimes, on aver-age, performed worst of all. Admittedly, our measures may ignore importantstrengths of conservative regimes. They can boast of more economic growth,lower unemployment, and higher per capita incomes. But while the politics,institutions, and policies of conservative regimes may contribute to bettereconomic performance, our findings give us little confidence this translatesinto greater capability for their citizens.

KEY TERMSabsolute poverty, p. •••active labor market policies, p. •••class voting, p. •••poverty rate, p. •••regime, p. •••


replacement rate, p. •••service-intensive welfare states,

p. •••union density rate, p. •••universal coverage, p. •••

SUGGESTED READINGSMichel Albert, Capitalism vs. Capitalism: How America’s Obsession with Indi-

vidual Achievement and Short Term Profit Has Led It to the Brink of Col-lapse (New York: Four Walls Eight Windows, 1993).

Eric S. Einhorn and John Logue, Modern Welfare States: Politics and Policyin Social Democratic Scandinavia, 2nd ed., (New York: Preager, 2003).

Gosta Esping-Andersen, Three Worlds of Welfare Capitalism (Princeton:Princeton University Press, 1990).

Jonas Pontusson, Inequality and Prosperity: Social Europe vs. Liberal Amer-ica (Ithaca: Cornell University Press, 2004).

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