Are there systematic differences between the behaviour of politicians – such as ministers, members of parliament or elected municipal council members – and that of ‘the rest of us’? Are politicians in a ‘league of their own’ in terms of how they take decisions and make judgements? In the existing literature, there is no overriding consensus or clear majority of findings on these questions. We add to this literature by leveraging results from an experiment with two samples: (1) Dutch locally elected politicians (n = 211) and (2) students (n = 260). The experiment examined whether these two groups displayed biases related to the representativeness heuristic and the availability heuristic – two so-called general purpose heuristics – and whether they displayed the reflection effect. Our findings demonstrate that politicians’ judgements and decisions are largely similar to those of the rest of us, indicating that there is little evidence of an elite-public gap in this respect. Under specific circumstances, however, politicians do differ in their judgement and decision making. These differences may have consequences for the functioning of representative democracy and for policy making. It is especially noteworthy that in this study political experience or expertise did not reduce decision-making biases.

Introduction

In Chapter 3, we discussed the rationales or logics of the welfare state in order to grasp its various driving forces. So far, we have largely abstracted from the substantial empirical differences between welfare states. This chapter explains that there is no such thing as the welfare state, but that there are distinctive worlds of welfare. We analyze the differences between welfare states and their social and political origins, foundation, and development. We ask two big questions: (1) why did we get different worlds of welfare, and (2) do we still have them? Answering these questions enables us to understand welfare state variation.

The field of comparative welfare state research is dominated by, and greatly indebted to, the work of Gøsta Esping-Andersen, whose landmark study TheThree Worlds of Welfare Capitalism (1990) revolutionized the way social scientists look at the welfare state. Two innovations were particularly powerful. First, Esping-Andersen introduced the concept of a welfare regime that allowed a much broader and better understanding of the variety of ways in which the major institutions of society (state, market, and family) interacted to produce specific patterns of work and welfare. In this way he not only helped to remove the field’s exclusive and theoretically unsatisfying preoccupation with social spending as the indicator of welfare state generosity (for a discussion of this so-called dependent variable problem, see Green-Pedersen 2004 and Clasen and Siegel 2007) but also opened up a whole new area for systematic comparative research. Second, Esping-Andersen introduced, documented, and explained the qualitative variation in welfare regimes (as the dependent variable), showing how these regimes (as the independent variable) were systematically related to differences in social outcomes that really matter, particularly in terms of employment structure and labor market behavior – and recently also at the micro-level of welfare state outcomes (e.g., Kammer et al. 2012).

Social Needs, Risks, and Disruptions in Permanently Modernizing Capitalist Nations

The history of the welfare state and its reform is a history of political actors struggling to cope with social needs, risks, and disruptions caused by rapid social and economic development. Paying attention to the “objective” problem pressure to which political actors respond is crucial for explaining past and contemporary welfare state reform. History may never repeat itself, but in many ways and irrespective of regime form or level of development, the problems of societal disruption, social needs, and risks that tend to emerge in the wake of what we conveniently call “modernization,” as well as the social and political struggles to deal with them, are strikingly similar across time and space (Wilensky and Lebeaux 1965 [1958]; Flora and Alber 1981; Flora and Heidenheimer 1981b). Take as an illustration the following quotation from a recent study of social policy in China and read it while keeping 19th-century Britain or Germany in mind:

The social needs, risks, and injustice described are not identical with but are still very similar to what we see described in, say, Marx’s analysis of the struggle over the working day in DasKapital (1867, chapter 10), in Engels’s examination of the suffering of the working class in Victorian England in DieLage der arbeitenden Klasse in England (1844), or, much later, in Polanyi’s study of the impact and the reaction to the social dislocation caused by the unrestrained capitalist free market in The Great Transformation (1944).

Introduction

In Chapter 5, we mapped and documented the persistent but also variable performance of welfare states. We developed the counterfactual argument that because welfare states have been performing their tasks remarkably well, there must have been a large amount of reform to adjust the existing architecture to the changing social and economic context of welfare politics. Surely, some policy drift – the conscious decision not to update existing social policy arrangements to respond to changing circumstances – must have occurred everywhere. However, the empirical documentation of how well welfare states worked shows that, with the exception of inequality, policy drift seems actually to be limited. Rather than suggesting that stability and the absence of change have been the main features of the past decades until the onset of the financial crisis, this observation implies that welfare states have shown the capacity to update social policies and to adapt to permanently changing circumstances. Since there must have been plenty of welfare state adaptation, updating, retrenchment, and restructuring – that is, reform – this has helped to secure the welfare states’ ability to perform their tasks. But, as we will document extensively in Chapters 7 and 8, functional stress has been building up steadily. Hence, we are expecting to see a great deal more reform pressure and policy adaptation, updating, retrenchment, and restructuring. Ultimately, the question is whether welfare states can continue to function, especially in the wake of the financial, economic, and debt crises since 2008 (see Chapter 10). In this chapter, we develop the theoretical tools for answering such questions. What is the best way to think about why and how welfare states should adjust to their continuously changing social and political context?

Introduction

What are welfare states for? What do they do? These are the “big” questions we take up in this chapter. We again (see Chapter 1) quote Barr (2004: 7), who defines the raison d’être of the welfare state as follows: “The welfare state exists to enhance the welfare of people who (a) are weak and vulnerable, largely by providing social care, (b) are poor, largely through redistributive income transfers, or (c) are neither vulnerable nor poor, by organizing cash benefits to provide insurance and consumption smoothing, and by providing medical insurance and school education.” This describes in a general way what welfare states do: enhancing the welfare of vulnerable groups of people in society and offering or facilitating social protection for all.

In Chapter 4, we showed that welfare states come in different shapes and sizes. They are founded on diverging conceptions of social rights and duties, prioritize different values (freedom, equality, solidarity), and set out to accomplish different objectives. There we mapped the crucial dimensions of variation according to which the various welfare regimes do very different things. We therefore expect the various welfare regimes to deal differently with the general objective of enhancing the welfare of the vulnerable and providing social protection for the population at large. The Anglo-Saxon, liberal, market-oriented, and targeted welfare states pledge to take care of the weak and the vulnerable. In contrast, the Scandinavian, state-oriented, and universalist systems also wish to take care of the middle class, as they are organized around the ideal of social citizenship. The continental and southern European family-oriented and particularist welfare states hold a middle position. They take care of various occupational groups according to those group’s standards but rely strongly on the family for care. Still, Barr’s definition describes what, in a general sense, all welfare states (should) do: enhance the welfare of vulnerable groups of people in society and offer or facilitate some level of social protection for all.

Introduction

The previous chapters focused on the “objective” exogenous and endogenous pressures to which politicians and governments must react so as to adapt, update, retrench, or restructure the welfare state. No matter how strong the demands for reform are and how existentially threatening the challenges might be, there is no guarantee that political actors will do the job of reform. And we stress once more that whether reforms should be implemented or consciously abstained from (in the latter case effecting policy drift) and which reforms are considered “necessary” are ultimately political decisions made in the arena of democratic politics. This chapter highlights what is special about the context of democratic politics, and especially the political logic of elections, for the political opportunities and constraints of different types of welfare state reform. Given that the welfare state is politically well entrenched and very popular among citizens and assuming that political parties wish to win elections, why would politicians and governments pursue reforms that may cost votes? So, the big questions of this chapter are why, how, and when do politicians and governments translate the exogenous and endogenous pressures into reform if the new policies that are needed contradict their electoral ambitions?

Preface and Acknowledgments

Like most books, this one has been quite some time in the making. The idea for writing it was born in 2006, when Gøsta Esping-Andersen asked one of us (Kees) to (co-)teach a course on comparative social policy at Universitat Pompeu Fabra (Barcelona). Many thanks to Gøsta for his suggestion to structure the course around “big” questions, which subsequently shaped the book’s composition. The course was adapted as a PhD course on the political opportunities and constraints in welfare state reform, taught at the Oslo Summer School in Comparative Social Science Studies in 2009. We would like to thank the MA students in Barcelona and the PhD students at the Oslo Summer School for their many questions and critical comments.

The field of comparative welfare state studies is rich with books on welfare state reform in specific countries and in specific policy fields, but there was no book that asked, let alone answered, the “big” questions about the politics of welfare state development and reform in a single volume. Why did we need a welfare state in the first place? How did we get it? Why did we get different worlds of welfare and do we still have them? What does the welfare state actually do? Why do we need to reform the welfare state? Why is reform so difficult, but why does it nevertheless happen? Can and will the welfare state survive the Great Recession (which, at the time we began thinking about these questions, was “just” a financial crisis)? We decided that it was time for a book that answered these questions, could be used in teaching, and would be of value to scholars generally interested in the politics of welfare state reform. To this end, we wished to bring together the existing vast, varied, and rich knowledge on welfare state reform, but also to add our own theoretical approach and empirical analyses. The result is a distinctive cross between a textbook and a research monograph.

Introduction

Looking back at history, we have a tendency to impute values to welfare state arrangements that were not necessarily part of the motivation of political actors when they designed and implemented social policy. For instance, for many people the first and foremost association with the welfare state concerns values such as equality, solidarity, and social justice. And surely, socialists used to underpin their reform proposals with references to these values. For others, however, the welfare state is primarily about collective solutions to social needs and misery, and about social order. And indeed, many of the liberal, conservative, and Christian social reformers saw themselves as pragmatic politicians experimenting with social laws that would substitute for charity and other traditional forms of social security. Still others tend to stress the social control and discipline that are exerted through social legislation. And yes, the rich did see poverty and deficient urban sanitation as threats to their own safety and health, and they did fear the revolting masses and hoped to quiet them down with social policy. Such considerations can be seen as social actors’ motivations or as important effects and forms of modern social policy in the welfare state.

With the benefit of hindsight and with better theoretical understanding of developments in various nations, we may be able to capture what we propose to call the rationales or logics of the welfare state: a conscious reconstruction by us as researchers of what we consider to be the main motivations, driving forces, considerations, values, and causal mechanisms behind welfare state development. With the idea of a rationale or logic, we do not claim any historical specificity or possibility of social scientific generalization. Rather, we introduce a heuristic device that can help us reveal and stylize analytically the complex political interconnections between the motivations of social and political actors (ideas, interests, power, etc.), driving forces (demographics, democratization, globalization, etc.), public policy considerations (security, health, efficiency, affluence, etc.), values (equality, solidarity, freedom, autonomy, etc.), and causal mechanisms (power mobilization, elections, policy learning, etc.). With these logics, we can sketch the broader context of the political opportunities and constraints of welfare state reform and answer the first big question: why did we need a welfare state in the first place and how did we get it?

Introduction

As we discussed in Chapter 1, welfare state reform, that is, updating, adaptation, retrenchment, or restructuring, is not a recent phenomenon. Still, it is increasingly capturing the agenda of governments in developed democracies, albeit in varying degrees of prominence. Where does the need to reform come from? In the previous chapter, we examined a key pressure coming from the outside, globalization, which pushes for welfare state change by exerting a functional pressure for reform. However, there are also domestic changes or pressures from within that add to this need and that influence actors’ ideas on how to respond and which type of reforms to undertake. The pressures from within stem from the shift toward a postindustrial society and comprise new social risks. We assess how this shift influences the need for welfare state reform by analyzing descriptive quantitative data on such diverse phenomena as the makeover of the employment structure and the demographic and household transformation. Moreover, we offer an extensive discussion of the different challenges from within that current welfare states face, including population aging and declining fertility, mass unemployment, changing family structures and gender roles, the transformation of life cycle patterns, and the shift toward a postindustrial labor market.

We show how the still ongoing changes have altered the foundation of the postwar welfare states in such a way that continuation of existing arrangements seems increasingly unlikely, if not impossible. Specifically, various previously well-functioning arrangements, such as pension or disability systems, are facing mounting inefficiencies, including burgeoning benefit claims (as in the Dutch disability scheme discussed in Chapter 6) and declining revenues, a combination of challenges that threatens their existence. Moreover, societal and economic changes cause new social risks to emerge, which existing welfare states are not yet covering, or at least not covering adequately. These newly arisen risks add up to a functional pressure for reform. As we argued (especially in Chapters 2 and 6), we do not assume that these functional pressures always translate into welfare state adaptation, updating, retrenchment, or restructuring. However, they do form a key point in our account of welfare state reform.

What Have We Learned So Far? Answers to the “Big” Questions

In this book, we asked “big” questions about the welfare state in order to uncover, map, and explain the political opportunities and constraints of different types of welfare state reform in advanced capitalist democracies. We have one “big” question to go: can and will the welfare state survive the Great Recession (Bermeo and Pontusson 2012a) – the economic downturn that followed the financial crisis in 2008 and, in Europe, was aggravated by a series of sovereign debt crises? Before we can tackle that question properly and directly, we first shortly present the answers to the big questions we have answered so far and that can help us answer the final one.

Why did we need a welfare state in the first place and how did we get it? All welfare states have their origin in the need to respond to the socially disruptive consequences of modernization. The fast economic and social developments in the 19th century created unfettered capitalist labor markets that resulted in massive dislocation, poverty, and misery. Labor legislation arose everywhere as a counter force to the disruption caused by these labor markets. Early social insurance legislation directly addressed the social risks of the market-based industrial society but was also designed to foster the political integration of the working class and to assist national state-building. Increasingly, the whole edifice of social policies and the welfare state came to revolve around the realization that the type of social risks that emerge in capitalist market societies cannot be covered by the family and that markets are notoriously ill-equipped to deal with these risks. Hence, it was the state that had to take the responsibility for organizing social protection by pooling and redistributing social risks.