Welfare Regimes

“A critical examination of Esping-Andersen’s model of welfare regimes, referring to the German and the Swedish systems.”

INTRODUCTION

The purpose of this work is to present and critically examine Gosta Esping-Andersen’s model of welfare regimes. It will discuss the three basic welfare regime types of his theory – the liberal, the corporatist and the social democrat one, referring to the German and the Swedish welfare systems, as the main patterns of the corporatist and the social democrat type. Then it will refer to the impact of the European Union in the evolution and development of the welfare systems of the EU member-states, and finally it will analyse the main critiques of Esping-Andersen’s welfare regimes model.

THE WELFARE-STATE REGIMES THEORY

Gosta Esping-Andersen argues that ‘to talk of a regime is to denote the fact that in the relation between state and economy a complex of legal and organisational features are systematically interwoven’. He begins from an interest in states and markets and places the notion of decommodification in the centre of his analysis. He considers the extent to which people are permitted to make their living standards independent of market forces as the most exceptional criterion for social rights. Citizens’ status as commodities is in this way reduced by social rights. Furthermore, he extends the argument that views welfare states as responses to stratification in capitalist societies, arguing that welfare states constitute stratification systems themselves, since social rights give individuals access to resources.
Esping-Andersen points out three factors to be of great importance in the understanding of the differences between welfare state regimes: ‘the nature of class mobilization (especially of the working class), class-political coalition structures and the historical legacy of regime institutionalisation’ . Moreover, he distinguishes three basic types of regimes in capitalist society: the liberal, the corporatist, and the social democrat one.
In the liberal welfare state regime, provision is limited to modest benefits for a clientele of low-income state dependants - usually working-class. Social reform is restricted by adherence to work-ethic norms and the regime minimises decommodification, encouraging a strong market-oriented welfare system for middle and upper-income groups. USA, Canada and Australia are the archetypal examples of this model.
In the corporatist regime-type, social rights are granted more broadly as the historical corporatist-statist legacy was upgraded to be compatible with the new ‘post-industrial’ class structure. The liberal obsession with market efficiency and commodification was never pre-eminent in the conservative and ‘corporatist’ welfare states of this regime; therefore the granting of social rights was easier. However, the preservation of status differentials prevailed so that rights were attached to class and status. Market welfare and private insurance play a rather small role, but the emphasis on upholding status differentials minimizes redistribution. Many corporatist countries are typically shaped by the Church and hence have an emphasis on a Christian

Democratic family ethic in social policy. Family benefits encourage motherhood and social insurance typically excludes non-working wives. Germany, Austria, France and Italy are some examples of this ‘corporatist’ model.
The German welfare state is institutionally unequipped to act as a compensatory operator of employment – in fact it is strongly predisposed towards reducing labor supply. As a welfare state built on the traditionalist conservative and Catholic principle of subsidiarity, holds that women and social services (except from health) belong to the family sphere. Therefore it has been quite hesitant in providing women with the services which will permit them to take employment. It also is a welfare state dedicated to the maintenance of income for those who have ‘earned’ it. The German regime must keep its faith in the industrial economy’s capacity of high productivity to finance a growing population of pensioners and non-actives. ‘It is this impending cost-crisis of this economic ‘surplus’ population which constitutes the Achilles’ heel of the German trajectory’.
The third, and smallest, welfare regime is the most obviously concerned with decommodification. Universalism, in social democracies, is a basic principle guiding social reform, and social rights were extended to middle-class groups with an emphasis on egalitarianism. The social democrats pursued a welfare state that would endorse equality of the highest standards and not of minimal needs. Sweden is the pattern of this model.
Sweden is viewed as the archetypal example of socio-corporatism and is known to have the most expansive (and expensive) welfare state in the world. If it had not been for the welfare state’s commitment to three interconnected principles, Swedish de-industrialization with its average rate of economic growth would have created severe employment problems. The three united principles in the welfare state model of social democracy are a) the improvement and expansion of social, health, and educational services; b) maximum employment-participation, especially for women; and c) sustained full employment .The future of Swedish welfare state depends on middle-class support, which entails improving and expanding the quality and quantity of services. Maximizing the tax-base, would be the solution to its financial groundwork, meaning that most people must work and the least possible to depend on benefits. Its weak point however lays to the fact that the government must restraint the wages, as the cost-disease problem cannot be avoided even if the state subsidizes service-employment growth, will eventually be brought to a standstill by tax-ceilings.
The interaction between class politics and the development of state institutions within the framework of general structural factors is accountable for the different paths of welfare state development. In liberal systems, the development of universalist welfare was blocked by the interests of industrial and agricultural employers and an unequal social structure was promoted, were the forces supporting the development of welfare were rather weak. Corporatist politics was concerned to maintain status divisions in order to overshadow the development of a universalist working-class socialist politics, encouraging interests which preserved the divisions in welfare policy. In social democratic regimes, an industrial working class and peasantry coalition was pressing for universal provision, where middle-class groups were incorporated by social democratic government.