The Three Political Economies of the Welfare State
Gøsta Esping-Andersen
International Journal of Sociology
Vol. 20, No. 3, The Study of Welfare State Regimes (Fall, 1990), pp. 92-123
(pp. 111--113)
Welfare states vary considerably with respect to their principles of rights and stratification. This results in qualitatively different arrangements among state, market, and the family. The welfare state variations we find are therefore not linearly distributed, but clustered by regime types.
In one cluster, we find the "liberal" welfare state, in which means-tested assistance, modest universal transfers, or modest social-insurance plans predominate. These cater mainly to a clientele of low-income, usually working-class, state dependents. It is a model in which, implicitly or explicitly, the progress of social reform has been severely circumscribed by traditional, liberal work-ethic norms; one where the limits of welfare equal the marginal propensity to demand welfare instead of work. Entitlement rules are therefore strict and often associated with stigma; benefits are typically modest. In turn, the state encourages the market, either passively, by guaranteeing only a minimum, or actively, by subsidizing private welfare schemes. The consequence is that this type of regime minimizes decommodification effects, effectively contains the realm of social rights, and erects a stratification order that blends a relative equality of poverty among state welfare recipients, market-differentiated welfare among the majorities, and a class-political dualism between the two. The archetypical examples of this model are the United States, Canada and Australia. Nations that approximate the model are Denmark, Switzerland, and the United Kingdom.
A second regime cluster is composed of nations such as Austria, France, Germany, and Italy. Here, the historical corporatist-statist legacy was upgraded to cater to the new "postindustrial" class structure. In these "corporativist" welfare states, the liberal obsession with market efficiency and commodification was never preeminent and, as such, the granting of social rights was hardly ever a seriously contested issue. What predominated was the preservation of status differentials; rights, therefore, were attached to class and status. This corporativism was subsumed under a state edifice perfectly ready to displace the market as a provider of welfare; hence, private insurance and occupational fringe benefits play a truly marginal role in this model. On the other hand, the state's emphasis on upholding status differences means that its redistributive effects are negligible. But, the corporativist regimes are also typically shaped by the church, and therefore influenced by a strong commitment to the preservation of traditional family patterns. Social insurance typically excludes nonworking wives, and family benefits encourage motherhood. Day care, and similar family services, are conspicuously underdeveloped, and the "subsidiarity principle" serves to emphasize that the state will only interfere when the family's capacity to service its members is exhausted. Aln illustrative example is German unemployment assistance. Once a person has exhausted his or her entitlement to normal unemployment insurance, eligibility for continued assistance depends on whether one's family commands the financial capacity to aid the unfortunate; this applies to persons of any age.
The third, and clearly smallest, regime cluster is composed of those countries in which the principles of universalism and decommodification of social rights were extended to the new middle classes. We may call it the "social democratic" regime type since, in these nations, social democracy was clearly the dominant force behind social reform. Norway and Sweden are the clearest cases, but we should also consider Denmark and Finland. Rather than tolerate a dualism between state and market, between working class and middle class, the social democrats pursued a welfare state that would promote an equality of the highest standards, not an equality of minimal needs as was pursued elsewhere. This implied, first, that services and benefits be upgraded to levels commensurable to even the most discriminating tastes of the new middle classes, and, second, that equality be furnished by guaranteeing workers full participation in the quality of rights enjoyed by the better-off. This formula translates into a mix of highly decommodifying and universalistic programs that, nonetheless, are tailored to differentiated expectations. Thus, manual workers come to enjoy rights identical to those of salaried white-collar employees or civil servants; all strata and classes are incorporated under one universal insurance system; yet, benefits are graduated according to accustomed earnings. This model crowds out the market and, consequently, inculcates an essentially universal solidarity behind the welfare state. All benefit, all are dependent, and all will presumably feel obliged to pay. The social democratic regime's policy of emancipation addresses both the market and the traditional family. In contrast to the corporatist-subsidiarity model, the principle is not to wait until the family's capacity to aid is exhausted, but to preemptively socialize the costs of family-hood. The ideal is to maximize not dependence on the family, but capacities for individual independence. In this sense, the model is a peculiar fusion of liberalism and socialism. The result is a welfare state that grants transfers directly to the children, and takes direct caring responsibilies for children, the aged, and the helpless. It is, accordingly, committed to a heavy social service burden, not only to service family needs, but also to permit women to choose work outside the household. Perhaps the most salient characteristic of the social democratic regime is its fusion of welfare and work. It is, at once, a welfare state genuinely committed to a full employment guarantee and a welfare state entirely dependent on its attainment. On the one side, it is a model in which the right to work has status equal to the right of income protection. On the other side, the enormous costs of maintaining a solidaristic, universalistic, and decommodifying welfare system means that it must minimize social problems and maximize revenue. This is obviously best done with the most people working, and the fewest possible living off of social transfers.