Toward a Political Economy of Social Policy - PDF document

��24 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;need both for a broader understanding of the range of coordination mech/anisms and a better understanding about how closed-economy models are being transformed. &#x/MCI; 2 ;&#x/MCI; 2 ;The mediating effect of political institutions, “nally,WeHowever,Conversely,poor. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 23 &#x/MCI; 1 ;&#x/MCI; 1 ;policies that encouraged much more egalitarian distribution of social in/surance and services and arguably more egalitarian distributions of in/come. These “ndings raise important comparative questions about the circumstances under which the interests of labor have progressive or re/gressive effects for social policy as a whole. &#x/MCI; 2 ;&#x/MCI; 2 ;The structure and performance of the economy have also played a major role in the development of the welfare literature. WeMoreover,Wepolicy.policy.equally, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��22 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;sideration of the effects of Christian Democratic and liberal traditions of welfare provision. Paul Pierson (1994) has argued that the impor/recently,Wesector.sector.power.WesternParadoxically, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 21 &#x/MCI; 1 ;&#x/MCI; 1 ;TRESPASSINGDVANCEDELFARETATEOMPARATIVEWecontroversy,shorter-runWe,However,insular,Wepower-resourcepower,Wren © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 13 &#x/MCI; 1 ;&#x/MCI; 1 ;coverage had been narrow and unequal, market-oriented reformers gained greater traction over the social-policy agenda. &#x/MCI; 2 ;&#x/MCI; 2 ;In theEasternEuropeancases,thetransitiontothemarketrequiredfundamentalshiftresourcesoutthestatesector.Yetthesocialistwelfarelegacyhadoffsettingpoliticalconsequences.Citizenshadbeenincorporatedintodensenetworkofsocialentitlements,andevenwherethevalueoftheseprotectionsandthequalityserviceshaddeteri/orated,scalingthembackposedseriouspoliticalrisks.NewdemocraticgovernmentsinEasternEuropedidundertakereforms.Yettheyalsostrovemaintainuniversalcoverageofnumberimportantlife-cyclerisks,mostnotablywithrespecthealthandpensions.Theyalsoattachedrelativelyhighprioritytoprovidingsocialsafetynetsforfor/malsectorworkers.speci“cally,However,notably,TabelliniWibbelsTwonarrow, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��20 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;tings. WeWelong-andlarly,Venezuela.WeTai/Taiwan,Conversely, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 19 &#x/MCI; 1 ;&#x/MCI; 1 ;One proposal from James Fearon and David Laitin (2005) is to randomly select cases from the larger sample. This method may be appropriate if the primary analytic objective is to test theories believed to have a general applicability and validity.below,however,ity,strategy,However,WeBrady,below.WeWeWeHowever, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��18 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;sider several policy areas within each country and exploit changes in the principal causal variables over time. &#x/MCI; 2 ;&#x/MCI; 2 ;As we noted at the outset, our study was strongly motivated by quite striking cross-regional differences in the evolution of welfare systems; we outline these differences in more detail in chapter 1. Of course, there is an ample number of candidates for explaining this variation, and in both chapters 1 and 5 we introduce our comparative case studies with some cross-national statistical analysis. In chapter 1, this analysis considers some correlates of social spending and other measures of social-service delivery,Wehowever,quality.multiply,popularity,Finally,overview. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 17 &#x/MCI; 1 ;&#x/MCI; 1 ;expanded incentives for political entrepreneurs to appeal to marginalized voters but also provided opportunities for organized stakeholders to de/fend entitlements and institutional prerogatives. At the same time, the collapse of the old development model and deep recessions created espe/cially severe “scal constraints, and new governments faced strong pres/sures for liberalizing reforms of social insurance and even outright re/trenchment of prior commitments. Given these economic conditions, expansion of the comprehensive social insurance initiatives visible in the East Asian democracies was largely off the table. Instead, reformist tech/nocrats sought to combine far-reachingpoor.WithOMPARATIVENALYSISVenezuela,Uruguay.Taiwan,Hungary,larger,however,Vietnam.Finally,Yugoslavia. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��16 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;on the underlying coalitional alignments and economic interests that we have outlined above. &#x/MCI; 2 ;&#x/MCI; 2 ;This point is most evident in the wide array of social policies adopted by the authoritarian regimes that we examine in part 1„variations that proved highly consequential for subsequent reform efforts. Restrictions on the franchise allow rulers to censor the groups that can formally in”u/ence the political process through electoral or interest-group mechanisms. But even authoritarian rulers court support and vary in the extent to which they repress or coopt low-income groups. Examples of this vari/ance in authoritarian strategies abound. In Latin America, military dicta/torships were generally less inclined than democracies to extend coverage of social security to new sectors of the population, but most of them used existing schemes to de”ect protest from workers. In Asia, authoritarian regimes expanded the provision of health and education services in the countryside both as a counterweight to urban political forces and to dampen insurgencies; indeed, they reached into the countryside more ag/gressively than most Latin American democracies. &#x/MCI; 3 ;&#x/MCI; 3 ;The highly comprehensive socialist welfare states provide the most ob/vious anomaly.However,delivery.With © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 15 &#x/MCI; 1 ;&#x/MCI; 1 ;WeUruguay,“nally,policy,however,activity.WayWeway.Yet,show,Tabellini © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��14 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;ated with an expansion of the franchise and competition for of“ce. Politi/cians must appeal to broader constituencies in order to win and retain of“ce. They do so by offering competing packages of public and private goods to voters, including those that redistribute income.&#x/MCI; 2 ;&#x/MCI; 2 ;9 &#x/MCI; 3 ;&#x/MCI; 3 ;Similar expec/tations follow from an interest-group approach to the policy process (see Grossman and Helpman 2001 for an overview). Interest groups do many things: they mobilize votes; supply money and information to politicians; and engage in contentious politics (McAdam, Tarrow,Tillyhowever,policy.TabelliniWallersteinHowever, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��12 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;variety of other market-oriented reforms„were socially disruptive and exposed previously sheltered sectors to new market risks. These griev/ances provided the basis for electoral and interest-group mobilization. &#x/MCI; 2 ;&#x/MCI; 2 ;On the other hand, crises increased the in”uence of technocrats, the international “nancial institutions, and domestic policy networks that fa/vored short-term “scal adjustments and restructuring of long-term “scal commitments. Social spending was implicated in these adjustments. Sheer “scal constraint limited the capacity of governments to spend on social programs. The social policy models of the ISI and state-socialist period were also vulnerable to the criticism that they had contributed to the “scal crises of the 1980s and 1990s and that they were not well suited to the new,Welfaremoreover.voter-bene“ciariesbelow,democracy.However,wider, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 11 &#x/MCI; 1 ;&#x/MCI; 1 ;But the course of social policy was also deeply affected by economic devel/opments and ideological trends that pushed in the direction of weakening the social responsibilities of the state. &#x/MCI; 2 ;&#x/MCI; 2 ;In part 2, we show that responses to these cross-pressures varied sub/stantially within and across geographic regions. Most countries instituted social-policy reforms, but the scope and direction of those changes de/pended on variations in economic performance and on the organizational and political legacy of past welfare entitlements. &#x/MCI; 3 ;&#x/MCI; 3 ;Reversal of Fortune &#x/MCI; 4 ;&#x/MCI; 4 ;The “rst three postwar decades can be considered a golden eraŽ of rapid growth. By contrast, economic performance since 1980 has shown much wider variance across regions and countries and much greater volatility within them. These changed economic circumstances not only directly affected the capacity of the government to maintain or expand existing entitlements but affected the politics of social policy as well. Good macro/economic performance strengthened the hand of political actors arguing for an expansion of social commitments and weakened the force of tech/nocratic arguments for reform or retrenchment. By contrast, crises„and particularly those accompanied by “scal constraints and high in”ation„ increased the in”uence of technocrats and their allies in the international “nancial institutions. Liberal technocrats focused initially on macroeco/nomic stabilization and a variety of market-oriented reforms; but they came to press for liberalizing reforms of the social sector as well. &#x/MCI; 5 ;&#x/MCI; 5 ;The Asian governments in our sample faced by far the most favorable economic environment. Growth remained robust in most of them until the “nancial crisis of 1997…98, providing the new democracies with the wherewithal to expand the state role in the provision of social insurance and services. The crisis of 1997…98 posed similar constraints to those seen in Latin America and Eastern Europe but did not pose the same fundamental challenge to the prior development model. Fiscal constraints were cyclical, rather than long-term and structural in nature, and as a result, new entitlements generally survived the crisis intact. &#x/MCI; 6 ;&#x/MCI; 6 ;Latin America and Eastern Europe, by contrast, faced far more severe economic constraints. The Latin American economies experienced deep recessions during the debt crisis of the 1980s and a recurrence of “nancial crises in the 1990s and early 2000s. Eastern European countries faced a gradual slowdown in growth prior to the collapse of 1989, then deep transitionalŽ recessions in the “rst half of the 1990s. &#x/MCI; 7 ;&#x/MCI; 7 ;Economic crises had contradictory implications for the politics of social policy. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 7 &#x/MCI; 1 ;&#x/MCI; 1 ;tional regressions to justify our skepticism. These models suggest that the relationship between level of development and social policy is by no means as robust as one might expect; even controlling for moderniza/tion,Ž important cross-regional differences persist. These results are con/sistent with our claim that the course of social policy depends on political and economic factors that cannot be reduced to the modernization pro/cess alone. &#x/MCI; 2 ;&#x/MCI; 2 ;Critical Realignments and the International Setting &#x/MCI; 3 ;&#x/MCI; 3 ;In contrastthesedeepŽhistoricalmodernizationarguments,focusondiscontinuitiespatternspoliticaldominationthatoccurredthethreeregionsduringhalfthetwentiethcentury.Weidentifythesediscontinuitiesemergencerulingcoalitionsandpoliticalincorporationorexclusionworking-classandpeasantor/ganizations.incorporationofurbanworking-classandrural-sectororganizationsin”uencedsocialpolicythroughthebasicmechanismsiden/ti“edpower-resourceapproach:determiningtheconstituencieswhichpoliticians„whetherdemocraticauthoritarian„responded.Exclusionthesegroupselitesgreaterleewayinpursuingtheirpolit/icalandeconomicobjectives.WorldWarlabor,However,WarWarWithWepolicy. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��10 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;ernments and “rms highly resistant to social insurance schemes that would increase labor costs. The authoritarian regimes in the region, whether established early in the postwar period or after brief periods of semidemocratic rule, thus maintained far more limited systems of public protection than was the case in either Eastern Europe or Latin America. On the other hand, export-oriented growth strengthened incentives to expand access to primary,secondary,ToEasternEurope,allCommunistgovernmentsinitiatedcentrallyplannedindustrializationdrivesimmediatelyaftertheconsolidationCommunistpowerthelate1940s.Thisstrategyrestedonhighlevelsofinvestmentbasicindustry,themobilizationoflabor,andsqueezethecountryside.Thecommitmentfullemploymentandgovernmentprovisionofsocialinsuranceandservicesemergedsideeffectsofthecompletesocializationoftheeconomy.theabsenceanyprivatesector,thegovernmentwasperforceinvolvedboththe“nancingandprovisionhealthcare,pensions,andevenhousing.Eventhoughtheseentitlementsoriginatedthestate-ownedenterprisesector,thecollectivizationagri/cultureextendedthemintothecountrysideandprovidedthebasisfortheuniversalizationofbene“ts.Similarly,governmentinteresttheexpan/sioneducation,anditsparticularemphasisvocationaltraining,wasdirectcomplementofthesocialistsystemofmanpowerplanning.commonly,RANSFORMATIONELFAREEMOCRATIZATIONTransitions © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 9 &#x/MCI; 1 ;&#x/MCI; 1 ;growth until the 1970s, when the constraints of the socialist model be/came manifest. The postwar period witnessed high growth across most of the middle-income countries of Latin America as well. Given subsequent crises, it is easy to forget that Brazil and Mexico were among the economic miracles of the period. The East Asian takeoff came somewhat later,Taiwanshow.However,labor-marketpolicy.Weidentify.WorldWarWorldWarHowever,labor-marketsector.over,Warpolicy.labor-intensivelabor-market © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��8 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;In Eastern Europe, Soviet in”uence prevailed. As in East Asia, the post/war liberation initially unleashed a wide spectrum of new social forces. Withhowever,Rather,economy.century.WarRather,Tocontrary,way.Now, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��6 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;These arguments are outlined brie”y in the “rst two sections of this introduction. In the third section, we take up the issue of institutions and regime type in more detail. Section four considers some methodological issues that arise in the comparative historical analysis that forms the em/pirical core of the book. WeTRATEGIESELFAREway.policy,particular.Wilensky © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��4 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;The second area of social policy is the provision of basic social services. Access to high-quality education and primary health services is widely viewed as critical for expanding human freedom and capabilities (Nuss/baum and Sen 1993; Sen 1999) and is an underlying determinant of life chances and arguably of growth itself.&#x/MCI; 2 ;&#x/MCI; 2 ;3 &#x/MCI; 3 ;&#x/MCI; 3 ;Access to primary education and basic health care is especially important in labor-abundantpoor,Tablepost…WorldWarsector.unevenly,WeWe © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu Welfarecoun/pointdelivery.expan-Universalquality. © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��Political Economy of Social Policy € 3 &#x/MCI; 1 ;&#x/MCI; 1 ;rapid implosion of state socialism in the early 1990s undermined import-substituting “rms and state-owned enterprises that had been central pil/lars of social policy in both regions. Privatization, restructuring, and greater exposure to international competition had important implications for the social contract. &#x/MCI; 2 ;&#x/MCI; 2 ;Political institutions constitute the third cluster of factors that in”uence social policy.ToRegimetypeimportantcomponentanyexplanationsocialpolicy.Dictatorshipanddemocracydeterminetheextenttowhichcompet/ingpartiescanentertheelectoralarenaandthefreedominterestgroupsenjoyinorganizingandexercisingin”uence.However,alsoemphasizethelimitationspurelyinstitutionalapproach.Institutionalrulesofthegame„thesupplysidethepoliticalmarket„arenotsuf“cienttoac/countforthecharactersocialpolicywithoutconsiderationunderly/inginterestsandtheirorganization„thedemandsidethepoliticalmar/ket„andtheeconomiccontextinwhichgovernmentsoperate.ARIATIONSELFAREHowever,poor.Wedisability,However, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu ��2 € Introduction &#x/MCI; 1 ;&#x/MCI; 1 ;These welfare legacies had a strong in”uence on both the politics and the economics of social policy as the countries of the three regions democ/ratized. Past policies„or the absence of them„created constituencies and generated demands on incoming democratic governments. Prior welfare commitments also had important “scal implications. In Eastern Europe and Latin America, entitlements placed heavy burdens on governments and generated strong pressures for reform and even retrenchment. In the high-growth Asian countries, by contrast, new democratic governments were relatively unencumbered by prior welfare commitments and had room to expand social insurance and services. &#x/MCI; 2 ;&#x/MCI; 2 ;In exploring these distinctive welfare trajectories, we build on three lines of theoretical argument that have motivated the literature on the advanced welfare state. The “rst, and arguably the most basic, is the sig/ni“cance of distributive coalitions and economic interests. Following the power-resourcepoor.Wepolicy.policy,Welabor-marketpolicy.Wood © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu INTRODUCTIONTowardYetTherelevancethesequestionshasbeenheightenedbyepochalpoliti/calandeconomicchangesthatoccurredinthedevelopingandformerlysocialistworldthe1980sand1990s.Mostcountriesthethreeregionsdemocratizedduringthisperiod,raisinghopesthatnewgovernmentswouldbemoreattentivesocialissues.Atthesametime,mostcountriesalsoexperienced“nancialcrises,recession,andassociated“scalcon/straints.Theseproblemstriggeredwide-rangingreforms,including,butmeanslimitedto,liberalizationandincreasedeconomicopenness.century, © Copyright, Princeton University Press. No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. For general queries, contact webmaster@press.princeton.edu