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Sustaining state welfare in hard times: who will foot the bill Peter Taylor-Gooby Journal of European Social Policy 2001; 11; 133 The online version of this article can be found at: http://esp.sagepub.com/cgi/content/abstract/11/2/133

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ARTICLE Sustaining state welfare in hard times: who will foot the bill? Peter Taylor-Gooby, University of Kent, UK

Summary

Résumé

Recent studies of how European welfare systems are responding to current pressures agree that welfare states display remarkable resilience. They are being reformed rather than dismantled. New policies are concerned to contain costs and to promote activation, stressing the contribution of welfare to economic competitiveness. Will people support cost constraint? This paper analyses attitude survey data from the 1980s and 1990s to show that approval of the main welfare services is high, but, in contrast to the findings of earlier studies, there is now some evidence of declining support. Attitudes are not structured according to the accounts of the ‘new politics’ of welfare (which imply that each regime will produce its own pattern of interests in relation to the groups whose interests are entrenched by current arrangements) but reflect broad lines of income, age and gender, cross-cutting national differences. There is little support for cuts in social services, but an equally low level of willingness to pay the extra taxes and social contributions required to maintain current standards of provision in the face of rising pressures on welfare. An agenda of activation is likely to prove more acceptable politically than one of cost constraint in all regimes. The implication is that European welfare states face a straitened future, between increasing demands and constrained resources, which may lead public opinion support to dwindle further.

Les études récentes sur la manière dont les Etats Providence répondent aux pressions actuelles ont en commun qu’elles aboutissent à constater que ceux-ci font montre d’une remarquable résistance. Ils sont en train d’être non pas démantelés mais bien plus d’être réformés. Les nouvelles politiques se concentrent sur la limitation des coûts et l’activation ainsi que sur la mise en évidence de l’apport de la protection sociale à la compétitivité économique. Est-ce qu’il existe un appui à cette limitation des coûts? Cet article analyse les données d’enquêtes d’opinion des années 1980 et 1990. Il montre que l’approbation envers les principaux services est élevée mais contrairement aux résultats d’études antérieures il existe quelques signes d’un déclin de cet appui. Les attitudes ne sont pas distribuées tels que prévues par les tenants des «nouvelles politiques» du Welfare (selon lesquels chaque «régime» produit sa propre structure d’intérêts liés aux groupes dont les intérêts sont consolidés par les arrangements en vigueur) mais reflètent les différences de revenus, d’âge et de genre, de nationalités. Il n’y a que peu d’appui pour des coupes dans les services mais également pour payer des taxes ou des contributions supplémentaires afin de maintenir les niveaux atteints face aux pressions croissantes. Un agenda d’activation est plus acceptable politiquement dans tous les régimes qu’une de réduction des coûts. L’implication est que les systèmes de protection sociale européens se trouvent coincés. entre des demandes croissantes et des réductions supplémentaires des coûts; ce qui peut conduire à une nouvelle diminution du soutien de l’opinion publique.

Key words attitudes, politics of welfare, retrenchment, welfare state reform

Journal of European Social Policy 0958-9287 (200105)11:2 Copyright © 2001 SAGE Publications, London, Thousand Oaks and New Delhi, Vol 11 (2): 133–147; 017012 Downloaded from http://esp.sagepub.com at Jyvaskylan Yliopisto on March 12, 2007 © 2001 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution.

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T AY L O R - G O O B Y

Welfare under altered circumstances The European welfare state provides a distinctive solution to the problem of securing social integration within competitive capitalism. It developed during the three decades of secure growth following the Second World War. The stability and sustainability of the welfare settlement now face major challenges as the labour market and family structures which it was designed to support undergo rapid change, as increasing numbers of older people confidently expect better pensions, health and social care; as globalization undermines the authority of the national state; and as the parallel expansion of the EU creates an increasingly unified and competitive market in Western Europe with further prospects of expansion to the East and around the Mediterranean basin. It is likely that the cost of sustaining current levels of provision, let alone achieving the improvements that many people accept as normal in the market sector of the economy, will rise. This paper discusses the implications of welfare values for the future development of European social provision, using as evidence surveys of public attitudes which reflect those values. Public opinion is generally supportive of state welfare in principle. However, attitudes may be moving against state welfare in the 1990s. When questions about the finance of services are examined, citizens are equivocal in their endorsement of higher taxes and contributions. This raises questions about the welldocumented public support for state welfare. As the cost of maintaining pensions and health care rises, will citizens be happy to foot the bill? We review recent developments and analyse attitude survey data in the light of theories about the new (and old) politics of welfare.

Recent developments in welfare states Resilience The current problems of state welfare attract

much attention. Analysis supports three main points. First, despite the concerns of the 1980s and early 1990s, the European welfare state is resilient in its response to current pressures. It is not contracting, nor is it obsolete. Indeed ‘the clear and sober message’ is that ‘survival is possible and likely – and desirable’, as Kuhnle concludes his study of the 1990s in Europe (2000a: 237). Similarly Beck and colleagues stress the essential value and viability of the European solution to the problem of achieving a measure of social justice within a capitalist market system (Beck et al., 1998). Ferrera and Rhodes also conclude from the work of the 1999 European University Institute Forum, Recasting the European Welfare State, that the welfare state is a largely successful solution to the ‘problem of reconciling growth with social cohesion’ (Ferrera and Rhodes, 2000: 279). The evidence that state provision is maintained or expanded is typically reinforced with evidence of public approval from attitude surveys (see for example, Pierson, 1996: 162, 165; Rhodes, 1996: 308; Ross, 2000: Footnote 39; van Kersbergen, 2000: 23). However, almost all the surveys cited analyse data from the 1980s and early 1990s and do not cover recent developments. Second, resilience is often driven by the entrenched interests of particular groups who are advantaged by current arrangements. As Pierson (1994) puts it ‘the welfare state now represents the status quo’. Governments find it electorally unsatisfying to confront citizens with cuts in valued services. The risk is that, as Esping-Andersen concludes in a recent major study, current arrangements lead to ‘median voter support for anachronistic modes of welfare production’ (1999: 184). Welfare policy making must proceed by indirection, and by achieving systematic reforms which reduce the capacity of particular interests to mobilize the defence of existing policies (see, for example, Freeman and Moran, 2000; Goul Andersen, 2000; Merrien and Bonoli, 2000; Palier, 2000). This approach produces a more sophisticated account of resilience since it implies that

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S U S TA I N I N G S TAT E W E L FA R E

the mechanisms of resilience differ in different contexts. Differences in the nature of welfare provision and in the extent to which different interests are able to exert an influence lead to differing reform agendas, although welfare states are confronted with broadly similar pressures. For example, Fritz Scharpf concludes a major analysis of the impact of globalization on welfare systems: while ‘there is no reason to think that economic viability should be incompatible with [welfare] aspirations’, still ‘welfare states differ greatly in their vulnerability to international economic pressures … in the specific problems … they need to address … and in the policy options that they could reach under the constraints of existing policy legacies and … the institutional constraints of existing veto positions’ (1999: 38–9). Third, current reforms and restructurings do not involve convergence but include common themes of cost control and activation. For example, Jens Alber and Guy Standing report from a major study of ‘social dumping’ that ‘there was neither convergence in the sense of catch-up processes, nor polarisation in recent years’ although ‘at best we can identify certain regional clusters’ (Alber and Standing, 2000: 107, 112; see also Daly, 1997). Although welfare states do not march in step down the same highway, there are a number of common trends. The European Commission’s official biennial report sums these up under two general headings – cost containment and ‘activating policy to reduce the number of people dependent on social transfers’ (CEC, 1998: 19). Ferrera and Rhodes decompose these: cost control involves adjustments in response to sociodemographic developments, mainly in pensions and health care, and also a trend to more accurate targeting of resources on those in need. Activation policies include the general shift from a passive to an active approach in the management of unemployment and the modification of financial arrangements to promote competitiveness by containing labour costs (2000: 4–7). Kuhnle (2000a: 234–5) and

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others identify similar developments. It is worth noting two trends conspicuous by their absence: although the virtues of greater individual responsibility are commonly endorsed there is no overall transfer of provision to the private sector (except in isolated instances where the market already plays a major role, such as UK pensions policy), although policies to provide incentives for private provision are developing in a number of countries; nor to the family, although welfare state support for social care varies greatly. Private pensions may play a more important role at some stage in the future as policies to encourage their expansion have a greater impact, but state provision is currently of very much greater importance in almost all European countries. These points add up to the suggestion that welfare systems are successful in adjusting to a changed environment in ways that reflect differences in their current structure and organization, and the political and cultural characteristics of the national context in which they developed. Welfare is being ‘recalibrated’, ‘recast’, is ‘in transition’, ‘restructuring’, ‘evolving’ or being ‘modified’, as recent titles suggest. The welfare state in Europe is doing well under difficult circumstances. However, most commentators agree that the political processes that drive current reforms differ from those that underlay the earlier growth of state welfare. Will social values set limits to successful adaptation?

The new politics of welfare A number of approaches suggest that support for the welfare state will decline, whether as a result of increasing affluence (Inglehart, 1997), a transition to a post-Fordist political economy (Jessop, 2000), sharper social divisions (Galbraith 1993; Wilensky, 1975) or new patterns of experience and social interests reinforced by greater individual selfconfidence (Beck et al., 1994; Giddens, 1994; 2000). Such theories do not appear to give a Journal of European Social Policy 2001 11 (2)



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Table 1

Welfare cleavages in particular regimes Market position

Social Democratic (Sweden) Conservative/Corporatist (Germany) Liberal (UK)

Gender

State sector

X X

X

Insider/outsider X

X

satisfactory account of resilience, which is the focus of the current paper (for a full discussion, see Bonoli et al., 2000: Ch. 4). They tend to refer to holistic social change affecting all of society (post-materialism, post-Fordism, affluence, globalization or social reflexivity). The new politics approach (Pierson, 1994) stresses the part played by different interests in changing social contexts. Since these interests may conflict with each other, but have a primary defensive orientation, the new politics is distinct both from the traditional politics of growth, in which all interests can be satisfied as the welfare state expands, and the neoliberal politics of cuts and marketization, which confronts welfare directly but offers voters lower taxes (see Ross, 2000: 15–18). The key point is that any attempt to dismantle the welfare state confronts entrenched interests and will therefore provoke unpopularity, so governments which wish to contain spending must act indirectly. Welfare systems display ‘path-dependency’ (Hall and Taylor, 1996; Immergut, 1998): all things being equal, current arrangements, by the very fact of their existence, inhibit change. They resist cutbacks, but also run the risk of becoming increasingly inappropriate to new needs as they develop. This leads to a structured diversity in response to similar pressures, since different welfare systems entrench different interests and offer different degrees of openness to emergent demands for provision and services. The new politics approach thus identifies different social interests as relevant in the era of welfare retrenchment from those that dominated expansion. As welfare systems grew, the basic conflicts were between those who believed they would have to pay and those who believed they would be net gainers. Thus welfare politics was structured on class lines,

or between political Right and Left, and the realization by the middle class that horizontal redistribution enabled better-off groups to gain greater security from state welfare was a pivotal development in assembling a mass constituency in support of social spending (Baldwin, 1990). Conflicts about retrenchment are seen to relate more finely to the detail of welfare state design. To simplify a complex debate (see Esping-Andersen, 1990; 1996; 1999; Pierson, 1996), the social democratic regime with its large state sector offering substantial job opportunities to women risks conflicts in relation to gender and sector, but not so much in relation to market position, since it is universalistic and inclusive; the market-based liberal regime involves conflict between those who are strong or weak in the market, but is indifferent to gender and labour market position, and has a small state sector; the conservative corporatist regime generates conflict between labour market ‘insiders’ and ‘outsiders’ and also on lines of gender, but market and sector conflicts are secondary. The pattern is summarized in Table 1, although since individual welfare states do not conform exactly to a particular regime type the role played by particular cleavages in practice is likely to be a matter of degree rather than of absolute distinction.

Policy making and value-frameworks: cultures of welfare Policy-making structures operate within cultural frameworks which associate particular values with state, market, occupational and family welfare. Three core values are identified as important in relation to European



welfare traditions broadly corresponding to Esping-Andersen’s ‘three worlds’ (1990) – citizenship, need and desert. The first implies a value-commitment to state universalism at a generous level, designed to promote an integrative social equality and summed up in the Swedish concept of state welfare as providing the ‘people’s home’. This approach is most clearly expressed in Nordic welfare states. It does not imply that generous support is available on request, but is linked to the belief that social inclusion also implies a contribution to society, typically through paid work. The ‘work line’ has become stronger in recent years (Eitrheim and Kuhnle, 2000; Kosonen, 2000). The second approach is the contrary, the liberal market ideology of welfare state minimalism with the assumption that benefits will only be provided at subsistence level for those unable to survive in the market. The morality of independence from state welfare is strongly enforced. Such values are most clearly expressed in the Anglo-Saxon model, found in Europe in the Irish and UK systems. The approach reinforces a work ethic by a different route, since work and private property are more legitimate bases for a claim on resources than need, and welfare must be organized to reinforce work incentives. The third value-orientation is associated with the Catholic/Christian Democrat principle of ‘subsidiarity’ (Spicker, 1991). Needs should be met at the appropriate level by the appropriate agency, and sources of support are conceived in a hierarchy of family, firm and state. The more distant institutions are only appropriate when those closest to the individual cannot meet needs. This principle influences the European Christian Democrat approach which links welfare to family and occupational systems in Germany, Italy, Switzerland and to some extent France and Spain (van Kersbergen, 1995). In practice, social insurance has become the most important system for meeting welfare needs, so that work and welfare are linked, again by a different route, since it is a work-based contribution record that guarantees entitlement.

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The expected contribution of ‘workercitizens’ in Nordic countries, the limits on benefits in a context where welfare must not conflict with the labour market in AngloSaxon countries and the work-linked subsidiarity of corporatist welfare ensure that work legitimates entitlement everywhere. The importance of the family ethic varies, with corporatist Christian Democrat and Mediterranean countries displaying more familism than universalist Nordic countries and with the Anglo-Saxon countries in an intermediate position. The implication is that, of the two main policy directions in welfare state reform identified earlier, activation towards a more competitive and work-linked structure can find a ready correspondence with welfare values across different types of country. However, cost containment as a strategy involves rather different issues in different welfare states. In social democratic countries, it may provoke concerns about the adequacy of more meagre provision, in Christian Democrat countries where there are strong associations between status and receipt it may conflict with the expectations that groups regard as legitimate. Only within the AngloSaxon market ethos with its limited assumptions about entitlement is it likely to gain an accepted place on the agenda. This may go some way to explaining recent policy developments: attempts to cut back provision generally meet with more serious (and usually effective) opposition than do measures to activate benefits for unemployed people (Bonoli et al., 2000: Ch. 2). For example, the 1999 pension reform in Germany generated a major party controversy in the run-up to the 1998 election which marked the end of the tradition of consensus pension policy making, and was one of the factors associated with the Kohl defeat. The stricter requirements for availability for work in the 1993 Federal Assistance Act and the benefit cuts in the 1996 Unemployment Assistance Reform Act were opposed by social democrats, but provoked less controversy and the bulk of the shift towards workfare Journal of European Social Policy 2001 11 (2)


138


remains untouched. The Nordic countries have ‘overcome the crisis … of the early 1990s with welfare state institutions and programmes largely intact’ (Kuhnle, 2000b: 225). The main change is the stricter imposition of the work line (Eitrheim and Kuhnle, 2000: 56). Only in the UK, with its distinctive electoral system which gives exceptional power to the party of government, do reforms in both directions proceed. The New Labour Government has made no move to reinstate unemployment benefit (abolished under the previous Government), but has instead established a major workfare/trainfare programme. At the same time the project of privatization of the bulk of pension provision (initiated under Thatcher) continues, with some modifications to protect poorer groups.

Values: the evidence of attitude surveys The accounts reviewed above in the three areas of welfare resilience, new politics and underlying social values offer good opportunities for the investigation of social attitudes to welfare. Are attitudes structured as the theories of new politics and entrenched interests imply? Do they endorse or contradict the main themes in accounts of welfare state recalibration? Attitude survey data suffers from a number of shortcomings and is used here in the absence of other convenient ways of accessing what people in different European welfare states think about the future of welfare. The results from different studies in different national contexts and in the same country over time show consistent patterns rather than random fluctuations. It is thus reasonable to assume that something which has a relationship to social values is being measured (Evans, 1996: 202). The chief problems lie in three areas. First, the logic of the method as it is typically employed assumes ‘summative democ-

racy’ – that social attitudes are simply the sum of individual attitudes. Social psychological theories indicate that the processes which produce collective attitudes are far more complex than this implies. Second, there are issues of technique. The pre-structured questions typically employed of necessity embody a weak reflection of any individual’s ideas. In particular they do not take into account reality as it faces policymakers (extra welfare involves extra spending); and citizens (policies are typically bundled together in party platforms, so that individuals cannot make separate electoral judgements on each). Third, while scholars may think in terms of an abstract welfare state, most people have separate and possibly inconsistent views on different services and benefits and on the tax necessary to pay for them. The notion of an attitude to the welfare state, as opposed to attitudes to pensions, unemployment insurance or assistance, itself requires investigation. In this paper we use the International Social Survey Project (ISSP), a major multi-country omnibus attitude survey with the advantage that modules are repeated at five-year intervals. Analysis includes the 1996 module which was not available to the earlier, most frequently quoted studies (Evans, 1996; Ferrera, 1993; Kaase and Newton, 1995; Papadakis and Bean, 1993; Pettersen, 1995; Roller, 1995; Svallfors, 1997; Svallfors and TaylorGooby, 1999). The research focuses on Germany, Sweden and the UK, chosen as examples of the value-frameworks discussed earlier and because they have been used to represent Esping-Andersen’s influential regime types in Western Europe. Regimes are, of course, ideal types, intended to capture the ‘big picture’ (Esping Andersen, 1990: 2) and not nations with specific histories. Welfare provision in all three countries (as elsewhere in Europe) received severe but different shocks during the period reviewed – in Germany associated with the costs and pressures of reunification, in Sweden with the economic crisis and devaluation in 1992, and in the



Table 2

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Support for state welfare, 1985–96 (ISSP, %)

It is the state’s responsibility to provide: A decent standard of living for the old 1985 1990 1996 Health care for the sick 1985 1990 1996 A decent standard of living for the unemployed 1985 1990 1996 And to reduce income differences between rich and poor 1985 1990 1996

Germany Definitely Probably

56a 62 53

41 37 44

54a 64 56

44 36 42

24a 28 24

62 55 60

26a 29 32

38 40 37

Sweden Definitely Probably

UK Definitely Probably

69

29

79 79 71

20 20 26

25

86 85 82

13 15 17

38

45 32 28

41 48 49

28

44 42 35

24 32 33

71

52

43

Note: a Former West Germany only.

UK from the crisis and effective devaluation consequent on exit from EMU in 1992. These and other factors influenced welfare debates. Nonetheless, the broad framework of provision remains representative of corporatist, universal citizenship and liberal-leaning approaches respectively. This justifies the examination of attitudes in these countries as a guide to welfare values in the range of West European settings.

Resilience Attitude surveys have investigated two general aspects of attitudes to welfare: attitudes to state responsibility in the main areas of provision, and attitudes to redistribution. There is considerable agreement across the main studies on three points. First, there is general support for the main areas of state provision. Second, support for areas of state provision which most people use (pensions, health

care) is stronger than support for provision for minorities such as unemployment benefits (whether because such benefits are less legitimate, or because they command a weaker constituency of self-interest). Support for direct redistribution between better-off and worse-off groups is also weaker. Third, there are clear national variations – Swedish social democracy and the liberal UK are much keener on state provision than Germany. Possibly, UK enthusiasm is a response to weak provision and Germany’s growing coolness reflects the costs of reunification. Table 2 gives the proportion who definitely support state provision in a range of areas from 1985 (for Germany and the UK) to 1996. The pattern contrasts with that of other studies which typically aggregate the view that provision is definitely the state’s responsibility with the view that it is probably the state’s responsibility, to provide a combined measure of support (which may mask declining conviction), and the study was of necessity carried Journal of European Social Policy 2001 11 (2)


140


out before the 1996 data became available. This leads to another point – the more recent surveys provide some indication of a greater hesitancy in support for state welfare. In most cases, the percentage stating that the service is definitely the state’s responsibility has fallen between 1990 and 1996, with a corresponding increase in the percentage describing it as probably the state’s responsibility. This pattern of answers begins to cast some doubt on theories that suggest welfare state resilience is rooted in public esteem, but does not provide sufficiently decisive evidence of a shift to undermine them. The main welfare state services still receive the support of substantial majorities. None of the theories that directly challenge resilience deals with the clear differences between countries and areas of provision found in the evidence. There are also some further difficulties. The arguments about the significance of social divisions find some support, especially in relation to attitudes to inequality and redistribution, but class divisions are not sufficiently strong to undermine overall support for state welfare. The most thorough-going analysis is by Svallfors (1997), who has developed more accurately comparable class measures than previous research and detects stronger class differences (see, for example, Roller, 1995: 220–4). ‘Both class and gender variables have clear effects in all four countries. Men and higher-level non-manuals are clearly less supportive of government redistribution than women and workers …. The patterns, for both class and non-class variables are very similar across nations’ (Svallfors, 1997: 293). Papadakis and Bean produce similar findings from an analysis which focuses on attitudes to the areas of legitimate government responsibility and spending rather than redistribution: ‘class politics received the strongest support’ (1993: 247). The social class divisions which Wilensky (1975: 116–19) and Galbraith (1993: 15–17) identify appear significant, and divisions in relation to gender interests also play a role. It is clear, however, that they do so in a context where the overall direction is

towards, rather than away from, support for the welfare state. Overall support for state welfare shows indications of a tendency to diminish in some areas, and social divisions play a role. However, the limited extent of the decline does not correspond to the theories that directly challenge the claims about the resilience of the welfare state. If correct, they are not true yet. How do attitude surveys relate to the more sophisticated ‘new politics’ approach?

The new politics of welfare The ‘new politics’ perspective deals with resistance to reform, and is in some ways the converse of the traditional politics of welfare. The most widely discussed approach identifies relevant groups in relation to state or privatesector employment, gender and social class interests and goes on to analyse the particular structures of interest division in particular regime types, discussed earlier in relation to Table 1. Table 3 provides a general overview of attitudes to the welfare state in the three countries, covering the areas of state responsibility for provision for pensioners (a service which most people might expect to use as part of a normal life-course) and unemployed people (benefits which may apply to a minority) and also redistribution between rich and poor (direct vertical rather than horizontal redistribution). The table says nothing about how state responsibility should be discharged or (beyond the reference to a ‘decent’ standard of living) the level of provision or the degree of redistribution. As in the other regressions in the paper, the model reported is a ‘best fit’ model, including the variables predicted by theory which show a significant relationship to the dependent variable. The statistics are odds ratios, which allow the reader to compare the extent to which members of the group are more likely to have the characteristic of the dependent variable. The most striking feature is the similarity



Table 3

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Support for state welfare (logistic regressions, odds ratios, best fit models, ISSP, 1996)

‘It should definitely be the government’s responsibility to …’ (a) provide a decent standard of living for the old Woman Older High income % correct predictions Model chi squared

Germany

Sweden

UK

1.28a 1.37a 0.64a 55.9 71.2a

1.30b 1.82a 0.70a 66.3 36.8a

1.29c 1.45a 0.65a 69.5 20.6a

(b) provide a decent standard of living for the unemployed Germany Full-time worker Woman High income % correct predictions Model chi squared

0.67a 0.43a 77.6 90.0a

Sweden 0.54a 1.56a 0.57a 63.0 78.2a

UK 0.54a 0.63a 73.5 29.1a

(c) reduce income differences between the rich and the poor Germany Govt employee Full-time worker Woman Older Younger High income % correct predictions Model chi squared

Sweden 1.47a

1.21b 1.36a

1.37a 1.96a

0.42a 69.9 107.4a

0.34a 63.9 112.3a

UK 0.72c 0.68a 0.60a 0.28a 67.8 77.1a

Notes: a Significant at 1% level. b Significant at 5% level. c Significant at 7% level.

rather than the differences between the countries. Gender, old age and income make a difference to attitudes to pensions and being a full-time worker and income (and in Sweden, gender) to attitudes to benefits for unemployed people. While income is again significant in relation to redistribution, and age emerges in all the countries, there is some indication of national differences. Full-time employment is associated with opposition to redistribution in the UK, gender in Germany and Sweden and government employment in Sweden and the UK. The combined role of gender and state employment in this case is the only aspect of the pattern of attitudes that

fits neatly with a simplified version of the predictions of regime theory. Most of the other relationships correspond to a crude notion of traditional self-interest (higher income people oppose state welfare, full-time workers do not support the unemployed, older women bear the impact of shortcomings in pension provision). Attitudes to the welfare state in general reflect the broad social patterns identified by Papadakis and Bean and Svallfors rather than regime differences. They do not fit the cleavages posited by new politics theorists, but rather follow the traditions of the old politics of welfare based on the most general social Journal of European Social Policy 2001 11 (2)


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Table 4


Support for cuts to help the economy and willingness to pay for better welfare (ISSP, 1996, %)

(a) Endorse spending cuts to help the economy (b) Endorse tax cuts even though social services cut % of those who endorse (a) who also endorse (b) N

divisions. Of course, patterns of attitudes do not necessarily correspond to the capacity for political mobilization. However, it is interesting that government employees do not identify with state welfare more closely in Sweden, or those full time in the labour market in Germany. Regime theory provides an account of stability rather than of the response to pressures for change. We go on to examine popular attitudes to the policies currently developing to meet the challenges to the welfare state.

Value-frameworks: putting your money where your mouth is versus having your cake and eating it The discussion above identified three main European value-frameworks, loosely corresponding to the principal welfare regimes. The different value-frameworks all leave an open door to activation reforms but differ in their response to cost constraint. We focus here on the latter issue. Debates about welfare reform involve both the finance and the provision of services and benefits. Political discourse, the experience of citizens and the questions asked in attitude surveys all tend to divorce the two. However, endorsement of current patterns of welfare provision entails support for the taxes and social contributions required to sustain them. Given that demographic shifts and higher unemployment (let alone the service improvements needed to match the improving performance of the private sector) will involve more spending, the question arises of who is willing to pay to maintain welfare standards. Responses to questions about attitudes to

Germany

Sweden

UK

84 44 46 3470

58 44 59 1360

45 22 29 996

tax and spending depend on the context in which they are asked. A question in the section of the questionnaire that deals with ‘things the government might do for the economy’ asks if respondents are in favour of or oppose government spending cuts in general. A separate question asked in the welfare section sets taxation directly against welfare spending (‘If the government had a choice between reducing taxes or spending more on social services, which do you think it should do? We mean all taxes together including wage deductions, income tax, taxes on goods and services and all the rest’). Both the cost constraint and the activation agenda pursue spending constraint on economic grounds, but public opinion tends to favour the welfare state for its own sake. When cuts are presented in an economic context, they receive stronger support, particularly marked in Germany (Table 4). Willingness to support service cuts is weak in the UK. There is a clear inconsistency in the patterns of answers brought out in the third row of the table. Only in Sweden do more than half of those who endorse economic cuts also accept cuts in services, and the proportion is less than a quarter in the UK. The implication that patterns of attitudes may produce real difficulties for a government that seeks to marshal support for welfare retrenchment in order to aid the economy is strengthened when attitudes to financing and receiving particular welfare state services are examined. Table 5 gives a cross-tabulation of support for more spending on a particular service and support for lower taxes rather than more state spending. Substantial numbers want lower taxes and more expensive services – an individually rational but



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Table 5 Contradictory attitudes: those who want more spent on a particular service who also state a preference for reductions in tax and contributions to more social spending (1996, %) Health Education Pensions Unemployment benefits

Germany

Sweden

UK

53 54 54 45

51 52 51 45

27 25 25 15

collectively impractical approach – in Germany and Sweden, and rather fewer in the UK, where support for increased spending rather than tax cuts is stronger. The extent to which different groups of voters will endorse or reject social spending cuts is central to the success of the cost constraint policies discussed earlier. We examined patterns of support for cuts to help the economy and as a policy choice through logistic regressions (Tables 6 and 7). Table 6

As with support for welfare as a state responsibility (see Table 3), income and age play a strong role in support for cuts across countries and in both tables. Other factors vary. In Germany, support for cuts to help the economy is associated with full-time worker status, and opposition to social service cuts with government employment and gender. In Sweden, support in the first area with fulltime worker status and not being a statesector worker, and in the second with gender.

Support for state spending cuts to help the economy (logistic regressions) Germany

Govt employee Full-time worker Older Younger High income Low income % correct predictions Model chi squared

1.30b 1.36b

Sweden

UK

0.62a 1.31b 0.75a 1.33a

83.4 10.0b

57.2b 28.8b

1.50b 59.0 13.0b

Notes: a Significant at 5% level. b Significant at 1% level. Table 7

Reduce tax even if it means social service cuts (logistic regressions) Germany

Govt employee Full-time worker Woman Younger High income Low income % correct predictions Model chi squared

0.63b 1.22b 0.83a 0.86a 1.77b 58.4 78.5b

Sweden

0.72b 1.23c 1.70b 58.0 27.7b

UK

1.77b 0.68a 78.1 18.63b

Notes: a Significant at the 1% level. b Significant at the 5% level. c Significant at 8% level. Journal of European Social Policy 2001 11 (2) Downloaded from http://esp.sagepub.com at Jyvaskylan Yliopisto on March 12, 2007 © 2001 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution.


144

Table 8 Views on whether tax levels on members of different income groups are too low or too high by those on low and high incomes (ISSP, 1996, %) Germany Quartiles Tax on high income Too high Too low N Tax on middle income Too high Too low N Tax on low income Too high Too low N Total tax receipts % GDP Highest income tax rate %

Sweden

UK

Bottom

Top

Bottom

Top

Bottom

Top

12 64 784

16 58 647

12 67 236

36 46 293

23 46 169

20 41 203

49 5 799

50 3 667

40 6 234

53 1 296

36 11 176

31 9 207

88 0 830 38 56

79 1 665

84 2 239 52 60

70 1 290

85 2 176 36 40

63 1 206

Source: Rows 15, 16 (OECD, 2000: 38).

Only in the UK are the same significant relationships found in both areas, with age and income. However, the directions of the relationships differ. In Germany there is a significant relationship between older age and support for cuts for the economy, and also between youth and willingness to see taxes and services cut. In the UK, the association is between youth and opposition to economic cuts, but endorsement of social service cuts, while low income is linked to support for economic cuts but opposition to service cuts. These findings indicate that patterns of attitudes in relation to the issues closest to current policy directions are complex and likely to be affected by national political issues. In Germany, older people may be most concerned about the economy, while younger people may feel that they bear the brunt of the tax burden associated with reunification. In the UK, younger people may see themselves as net contributors to rather than beneficiaries from social services, while those on low incomes may feel that they would benefit from a stronger economy, but lose out from service cuts. The experience of cuts under the 1991 bourgeois and 1994 social democrat-led coalition in Sweden may have generated a debate

that produces a more consistent pattern of answers. The way issues are presented in questionnaires – and also, presumably, in political debate – exerts a strong influence on the way people understand and respond to them. However, there is some consistency in the factors associated with support for cuts and those linked to support for state welfare. The contradiction between simultaneous calls for more welfare spending on a particular service and for cuts in all forms of taxation and social contributions at the cost of lower social spending in general raises the question of where people think the extra money will come from. One indication of possible sources of finance for additional welfare spending lies in views on where the tax burden lies heaviest. Table 8 gives a cross-tabulation of such views by income group. It shows that there is strong agreement that tax on low-income people is too high and on high-income people too low in all three welfare states (although in Sweden, where taxes are highest, there is a noticeable group among the better-off who think their own group pays too much tax). Tax on middle-income people is seen as too high by sizeable groups in Germany and Sweden, but by a smaller group in the UK. This indicates



that it is going to be difficult to achieve a political consensus on financing the extra costs of state welfare through higher taxes or contributions from lower or middle-income people (with the possible exception of the UK, which has a smaller welfare state and lower taxes than the other two countries). There is considerable agreement across the income scale that taxes at the top are too low in Germany and a measure of agreement in Sweden, although also indications that the top quartile themselves resist the idea. In the UK there is little difference between better and worse-off in their views, but just under half think taxes at the top too low while about a fifth think them too high. In short, when it comes to paying for a more expensive welfare system, the pattern of divisions about state welfare is rather different from that displayed in regime analysis: it is the corporatist regime that reveals most consensus, while the social democratic regime displays the possibility of conflict and the liberal one that of inertia. However, in none of the countries is it obvious where support for extra spending is underpinned by an obvious willingness to pay the cost. This returns us to the agenda of retrenchment, where endorsement is highly sensitive to the way policies are presented. The data on attitudes to tax and spending calls into question the link that is often drawn between support for state welfare and the resilience of the welfare state. Most people favour the main state services. Majorities in some countries are prepared to endorse spending cuts when these are presented as helpful to the economy, but sizeable groups are also keen on higher taxes for more welfare spending in principle. Which groups will volunteer to pay the taxes to support the maintenance of those services is much less clear.

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and horizontal redistribution attract more support than vertical redistribution. This is entirely consonant with the postwar politics of welfare state expansion. There is now some evidence that support is in decline. However, the structure of attitudes does not conform to the regime-based patterns of group conflicts most frequently identified in the ‘new politics’ of welfare. Rather the clearest divisions lie between liberal Anglo-Saxon and other systems, and follow the traditional divisions of class, age and gender interests, cross-cutting national differences in regime. When attention turns from statements of approval of state responsibilities and policies to the finance of welfare provision, difficulties emerge. It is simply not clear which social groups are willing to pay for the services they endorse. The real problems of reform may be rather more similar between regimes than theory predicts and may lie in getting voters to accept either tax and contribution increases or to acquiesce in retrenchment as much as in the defeat of particular interest groups in conflicts over welfare spending constraint. One implication is that the agenda of welfare state activation may be everywhere easier to advance than the agenda of cost containment, and this may be the future direction of policy.

Acknowledgements The author gratefully acknowledges the support of the ESRC in funding this research under grant R000222914; and of the ZUMA Archive at Cologne in making the ISSP data available at short notice.

Appendix: variables used in the regressions Conclusion Public opinion everywhere has traditionally endorsed the welfare state. Mass provision

Independent variables (reference 0) Women: Female gender 1; Low income: in bottom quartile of equivalized family income distribution 1; Journal of European Social Policy 2001 11 (2)


146


High income: in top quartile of equivalized family income distribution 1; Younger: in bottom third of age distribution 1; Older: in top third of age distribution 1; Government employee: government employee 1 (does not include nationalized industry workers); Full-time worker: works 35 hours + (UK 30 hours +) in main job 1.

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European Welfare States’, Journal of European Social Policy 6 (4): 304–27. Roller, E. (1995) ‘The Welfare State: the Equality Dimension’, in O. Borre and E. Scarborough (eds) The Scope of Government. Oxford: Oxford University Press. Ross, F. (2000) ‘Interest and Choice in the ‘‘Not Quite so New’’ Politics of Welfare’, West European Politics 23 (2): 11–34. Scharpf, F. (1999) ‘The Viability of Advanced Welfare State in the International Economy: Vulnerabilities and Options’, Working Paper No. 99/9. Max Planck Institute for the Study of Societies. Spicker, P. (1991) ‘The Principle of Subsidiarity and the Social Policy of the European Community’, Journal of European Social Policy 1 (1): 3–14.

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Svallfors, S. (1997) ‘Worlds of Welfare and Attitudes to Distribution: a Comparison of Eight Western Nations’, European Sociological Review 13 (3): 283–304. Svallfors, S. and Taylor-Gooby, P. (eds) (1999) The End of the Welfare State? London: Routledge. van Kersbergen, K. (1995) Social Capitalism. A Study of Christian Democracy and the Welfare State. London: Routledge. van Kersbergen, K. (2000) ‘The declining resistance of the welfare state to change’, in S. Kuhnle (ed.) The Survival of the European Welfare State. London: Routledge. Wilensky, H. (1975) The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures. Berkeley: University of California Press.


Institutional analysis and the role of ideas in political economy JOHN L. CAMPBELL Dartmouth College

In reaction to rational-choice theory scholars have tried to understand better how ideas, such as economic theories, norms, and values, rather than self interests, in£uence policy making.1 However, critics have charged that at least two serious problems have hampered this e¡ort.2 First, the concept of ideas and their e¡ects on policy outcomes have been poorly conceptualized. Many scholars agree that an analytic distinction should be drawn between ideas and interests as determinants of policy,3 but what they mean by ideas has varied widely from broad notions of culture, shared belief systems, and world views to speci¢c strategies of action and policy programs.4 Second, critics maintain that proponents of the ideas perspective have not provided convincing empirical evidence to support the claim that ideas a¡ect policy outcomes in ways that are truly independent from the e¡ects of interests ^ a problem that stems in part from the poor conceptualization of ideas and their e¡ects in the ¢rst place. This article sharpens the concept of ideas and clari¢es how ideas a¡ect policy making. As a result, it recti¢es the ¢rst problem and takes an important step toward resolving the second. In so doing, it draws insights from the two theoretical perspectives that have questioned the assumption that politics are driven solely by actors operating according to a self-interested cost-bene¢t calculus. The ¢rst view, historical institutionalism, has been developed by political sociologists and political scientists,5 while the second, organizational institutionalism, stems from the work of organizational sociologists.6 I argue that each perspective has unique theoretical blind spots that create the possibility for crossfertilization and an improved understanding of di¡erent types of ideas and how they in£uence policy making. Although scholars from both traditions have become interested in the e¡ects of ideas on policy making, virtually no one has tried to blend these two perspectives in Theory and Society 27: 377^409, 1998. ß 1998 Kluwer Academic Publishers. Printed in the Netherlands.

378 ways that enhance our knowledge of these issues. Indeed, only a small handful of scholars have compared these viewpoints at all and most have either argued for one theory over the other7 or simply called for rather than provided a synthesis.8 Some theorists have combined certain elements from each perspective to show how material and symbolic factors simultaneously determine outcomes, but they have done little to re¢ne the concept of ideas per se or to identify the unique e¡ects that di¡erent types of ideas have on policy making.9 I begin by brie£y comparing how historical and organizational institutionalism treat the issue of ideas and policy making. The key insight of historical institutionalism is its theory of constraint, that is, its explanation of how ideas and institutions limit the range of possible solutions that policy makers are likely to consider when trying to resolve policy problems. More speci¢cally, historical institutionalists hold that underlying normative structures restrict the set of policy ideas that political elites ¢nd acceptable and formal institutions mediate the degree to which elites transport di¡erent ideas into policy-making arenas for consideration. Organizational institutionalists have a theory of constraint that focuses on underlying cognitive rather than normative structures. They also o¡er a theory of action, that is, an account of how actors de¢ne and articulate their policy problems and solutions initially by utilizing the institutionalized scripts, cues, and routines that constitute their cognitive frameworks and empower them to act. Second, I extend the insights of each perspective to create a typology of ideas based on two structural dimensions. There are four distinct types of ideas depending on whether they operate primarily at a cognitive or normative level and whether they constitute the explicit arguments or underlying assumptions of policy debates. Third, I indicate the utility of this scheme by showing how during the late 1970s and early 1980s each type of idea had important e¡ects that helped conservative supply-side economics rather than its chief intellectual rival, liberal industrial policy, to become the dominant conceptual framework for macroeconomic policy making in the United States. In brief, supply-side economics became politically in£uential because it o¡ered clearer and simpler programmatic policy guidelines for resolving important economic problems, better ¢t the existing cognitive and normative constraints that policy makers faced, and was more e¡ectively framed for discursive purposes than industrial policy. Thus, I argue that di¡erent types of ideas, identi¢ed by their structural features, had di¡erent e¡ects on policy making. Finally, I examine the theoretical and methodological implications of the argument.

379 I refer to the rise of supply-side economics simply as an illustration and recognize the need to be careful about reading too much from one case, which, of course, cannot constitute unequivocal proof. Furthermore, I do not claim that ideas alone caused the rise of supply-side policies in America. Material interests and the resources backing them were important too. I show here that the relationship between interests and ideas is more complex than the interests-versus-ideas debate often acknowledges. Indeed, to ask whether either interests or ideas are the chief determinants of policy outcomes is a misleading way to pose the issue because it neglects the possibility that it is the interaction between the two that counts and that some types of ideas are endogenous to the policy process in the sense that they are in£uenced by policy struggles in which interests, resources, and power loom large. Hence, supply-side ideas captured the imagination of policy makers in part, but not entirely, because they were connected to the organizational resources of powerful political and economic interests. Historical institutionalism Because historical institutionalism was derived from the materialist views of Marx and the comparative history of Weber, for many years it was a perspective that assumed that the material interests of political and economic actors motivated politics and that these interests were institutionally determined.10 By institutions historical institutionalists generally meant formal and informal rules and procedures, such as those codi¢ed in the law or deployed by states and other bureaucratic organizations.11 However, they gradually discovered that politicians as well as actors outside the state occasionally struggled for political change in order to improve government, the economy, and society in general rather than simply for the sake of personal gain.12 The lesson for these scholars was that ideas as well as self interest mattered. But how? A small handful of scholars began studying the conditions under which ideas in£uenced policy makers in areas such as macroeconomic policy,13 international relations,14 and the early development of social-welfare policies in Europe and North America.15 The general thrust of this literature was that the power of ideas depends largely on how much support they receive from political parties, unions, the business community, and in£uential political and intellectual elites and how much institutional access these actors have to critical policy-making arenas.16

380 For example, Margaret Weir and Theda Skocpol showed how di¡erent forms of Keynesianism were adopted in Sweden, Britain, and the United States during the 1930s largely as a result of Keynesian economists having di¡erent institutional opportunities to penetrate policymaking venues in each country.17 They concluded that institutional constraints mediated the in£uence of ideas on policy. Historical institutionalists have always focused on how institutional factors, such as the relative insulation and centralization of political elites or the relationships between branches of government, constrain policy making.18 So it is not surprising that their ¢rst impulse, in studying how ideas a¡ect policy making, was to explore how institutions constrained the impact of ideas on the policy process. However, they often overlooked how ideas themselves can constrain policy making.19 Subsequent work began to address this issue. Some researchers recognized that policy makers use policy ideas as the basis for creating new policy tools, government agencies, and other formal institutions that limit policy options later,20 but this argument remained close to the traditional notion that institutions rather than ideas per se are the critical policy-making constraints.21 More important, a few scholars argued that for policies to be adopted they must ¢t with the underlying norms and values of a society.22 Focusing on normative constraints was a sharper break with traditional historical institutionalism. Despite these advances researchers paid little attention to how ideas facilitate rather than constrain action. Their contribution in this regard was rather modest, acknowledging simply that ideas spur action by providing speci¢c ``road maps'' out of policy dilemmas.23 For instance, they argued the obvious point that policy makers use economic theories as explicit guides for reducing in£ation, stimulating economic growth, resolving trade imbalances, and solving other policy puzzles. In this sense, ideas push policy making in very precise directions by giving policy makers clear reasons to adopt a speci¢c course of action. Of course, for most historical institutionalists whether this happened still depended largely on whether key elites deemed these ideas to be normatively acceptable and whether they could transport them through institutional channels into in£uential policy-making arenas. As a result, historical institutionalists neglected how elites and other actors deliberately package and frame policy ideas to convince each other as well as the general public that certain policy proposals constitute plausible and acceptable solutions to pressing problems. Indeed,

381 the ability of elites to transport an idea into in£uential arenas may turn on their ability to package and frame it successfully in the ¢rst place ^ hence, the importance of ``spin doctors,'' media relations personnel, and other communications specialists in politics.24 Furthermore, historical institutionalists ignored how the content of underlying norms and values provides the symbols and other elements that political actors use in carrying out these more explicit and deliberate manipulations.25 For example, in an in£uential discussion of ideas and policy making, Peter Hall acknowledged that national political discourse sets important normative limits on policy-making options but barely mentioned that these structures also provide participants in policy debates with a conceptual repertoire for actively framing these options and did not theorize how such framing occurs.26 The point is that ideas facilitate policy-making action not just by serving as road maps, but also by providing symbols and other discursive schema that actors can use to make these maps appealing, convincing, and legitimate. Organizational institutionalists have had more to say about this. Organizational institutionalism Organizational institutionalism constitutes a branch of organizational sociology that is based on phenomenology. Its adherents maintain that, because organizational environments are often uncertain, people's interests are ambiguous and thus their actions are motivated more by institutionalized routines, habits, rituals, scripts, and cues than interests.27 To di¡erentiate themselves from earlier organizational theorists who stressed how behavior was normatively based, organizational institutionalists stress that routines, habits, etc., are important parts of an actor's underlying cognitive framework and that actors rarely subscribe to them self-consciously or deliberately, due to the fact that cognitive frameworks are generally so taken for granted that they are virtually invisible to the actors themselves.28 Some scholars used this approach to theorize how ideas a¡ect policy making and state building.29 For example, Frank Dobbin argued that ideas in the form of national political cultures determined how policy makers promoted railway development in the late nineteenth century.30 By ``culture'' Dobbin meant the shared conceptions of reality, institutionalized meaning systems, and collective understandings that guide policy making ^ cognitive structures that are rationalized in the sense that policy makers take them for granted as part of the nature of

382 reality.31 Traditionally, he argued, French political culture held that centralized state institutions and state sovereignty were the keys to political order. As a result, political elites in Paris choreographed railway development with a heavy hand, to ensure that self-interested ¢rms did not jeopardize the development of an e¤cient and well-coordinated national rail system serving the public interest. Conversely, in the United States, policy makers assumed that markets, local self rule, and community sovereignty were the sources of political order. Hence, they initially based rail policies on government activism at the state and local levels and, later, on the reinforcement of market mechanisms by the Interstate Commerce Commission.Variation in cognitive frameworks was responsible for nationally unique policy outcomes. There is a tension within organizational institutionalism insofar as cognitive structures are both constraining and enabling.32 On the one hand, structures constrain in the sense that the underlying cognitive frames and schema through which actors view and interpret the world limit the possibilities for action.33 Some possibilities are simply not recognized due to the cognitive blinders with which actors operate. For instance, in Dobbin's view it would never have occurred to French political elites to relinquish railway planning to local authorities and private actors because it was not part of their institutionalized political culture. On the other hand, to infuse their perspective with a theory of action, organizational institutionalists also claim that structures `ènable'' and `èmpower'' actors to generate solutions to their problems by providing cues and scripts that ``constitute'' legitimate forms of action.34 Action-oriented metaphors, such as these, are common in this literature. However, critics have charged that by relying on these metaphors organizational institutionalists fail to specify the causal processes through which structures enable and empower actors and constitute action.35 As a result, they neglect the important role of agency in policy making and their theory of action leaves the impression that actors are institutional dopes blindly following the institutionalized scripts and cues around them.36 For instance, Dobbin argued that French policy makers initially employed a central state planning model to build highways and then transposed this model to the development of canals and then railroads, but he did not specify whether this was a conscious and thoughtful adoption of policy-making patterns inherited from the past or not, so the role of agency in his account is unclear.37 Other analyses of transposition fare better. Notably, Yasemin Soysal showed that, as a

383 new model of citizenship emerged at the world level during the latter half of the twentieth century, it was gradually adopted by many nation states, but with signi¢cant variations across countries because local actors tailored the new model to existing national political institutions.38 The point is that acknowledging the self-conscious capacity of actors to engage in deliberate and creative transposition is one way to inject agency into structural explanations and develop a more re¢ned and dynamic theory of action.39 Mary Douglas identi¢ed a second way to do this.40 She maintained that actors self-consciously craft solutions to their problems through a process of bricolage, through which they recombine already available and legitimate concepts, scripts, models, and other cultural artifacts that they ¢nd around them in their institutional environment.41 In this view, change results from the deliberate modi¢cation and recombination of old institutional elements in new and socially acceptable ways. Ann Swidler developed a similar idea that culture provides the ``tool kit'' with which actors construct their world views and devise strategies of action.42 Ironically, although organizational institutionalists often refer to Douglas's work insofar as she recognizes that new institutions are constructed in socially appropriate ways, they pay less attention to her discussion of bricolage, although it is certainly consistent with their arguments.43 In summary, compared to how historical institutionalists view the in£uence of ideas on policy making, the insights of organizational institutionalism are twofold. First, insofar as historical institutionalists see that ideas constrain policy making at all, they have focused almost entirely on how the background constraints underlying policy debates are normative. Organizational institutionalists have deliberately moved away from this position in a cognitive direction.44 Second, whereas historical institutionalists have a rather static and simplistic view of how ideas constitute action by means of exogenously given road maps, at least some organizational institutionalists o¡er the possibility for a more dynamic theory of action that acknowledges the importance of agency through the concepts of transposition and bricolage ^ terms that capture the notion that actors self-consciously devise solutions to their problems by deliberately manipulating explicit, culturally given concepts that reside in the cognitive foreground.

384 Possibilities for cross-fertilization Scholars have argued that there has been a strong tendency for excessively one-sided views to predominate in discussions of these issues at the expense of comprehensive theoretical development.45 Indeed, despite the fact that both historical and organizational institutionalists are concerned with ideas as determinants of policy making there has been astonishingly little cross-fertilization between these two perspectives. This is particularly striking insofar as the insights of each one often complement the blind spots of the other. One would expect that theoretical progress could be made by blending elements of these two perspectives. How can this be done to improve our understanding of the relationship between ideas and policy making? The comparison of historical and organizational institutionalism reveals two conceptual distinctions that are useful for identifying di¡erent types of ideas that are relevant for policy making. First, ideas can be underlying and sometimes taken-for-granted assumptions residing in the background of policy debates. However, ideas can also be concepts and theories located in the foreground of these debates where they are explicitly articulated by policy-making elites. Although the distinction between background and foreground is inspired by organizational institutionalism's recognition that some ideas are so taken for granted that they are invisible, the concept of background assumptions adopted here is not as strong. That is, background assumptions can be visible to actors yet taken for granted in the milder sense that they remain largely accepted and unquestioned, almost as principles of faith, whereas ideas in the foreground are routinely contested as a normal part of any policy debate. Second, ideas can be either cognitive or normative. At the cognitive level ideas are descriptions and theoretical analyses that specify cause-and-e¡ect relationships whereas at the normative level ideas consist of values and attitudes. Recently scholars in both camps have urged that the distinction between cognitive and normative ideas be incorporated into analysis but have not indicated how this should be done.46 The typology represented by Table 1 shows how this can be accomplished. By combining these structural distinctions we can identify four types of ideas: paradigms, public sentiments, programs, and frames. Although the typology is based on structural distinctions, I show here that each type of idea exerts unique e¡ects on policy making. Thus, the typology serves an analytic as well as taxonomic function. As elaborated

385 Table 1. Types of ideas and their e¡ects on policy making

Cognitive level

Normative level

Concepts and theories in the foreground of the policy debate

Underlying assumptions in the background of the policy debate

Programs Ideas as elite policy prescriptions that help policy makers to chart a clear and speci¢c course of policy action

Paradigms Ideas as elite assumptions that constrain the cognitive range of useful solutions available to policy makers

Frames Ideas as symbols and concepts that help policy makers to legitimize policy solutions to the public

Public sentiments Ideas as public assumptions that constrain the normative range of legitimate solutions available to policy makers

below, paradigms are cognitive background assumptions that constrain action by limiting the range of alternatives that policy-making elites are likely to perceive as useful and worth considering. Public sentiments are normative background assumptions that constrain action by limiting the range of alternatives that elites are likely to perceive as acceptable and legitimate to the public. Of course, what is often most important is how elites perceive public sentiments, rather than public sentiments per se. In the foreground of policy debates, programs, or policy prescriptions, are cognitive concepts and theories that facilitate action among elites by specifying how to solve speci¢c policy problems, whereas frames are normative concepts that elites use to legitimize these programs to the public through processes such as transposition and bricolage. Paradigms and public sentiments are second-order concepts insofar as they constitute the underlying ideas upon which the ¢rst-order concepts, that is, programs and frames, rest, respectively. Ideas and the rise of supply-side economics To elaborate and illustrate the analytic utility of this scheme, the discussion that follows describes how each type of idea contributed to the rise of the supply-side approach to macroeconomic policy making in the United States. Central to this approach was the idea that federal government expenditures and especially income taxes should be cut ^ an approach that culminated in passage of the Reagan administration's 1981 Economic Recovery Tax Act, the largest tax cut in U.S. history, a

386 bold attempt to revitalize the economy, and a radical departure from the Keynesian approach that had dominated macroeconomic policy making since the Second World War. Because this was a time when economists and policy makers were debating the merits of di¡erent macroeconomic policy approaches, notably supply-side economics versus industrial policy, this case also provides valuable insights about why some ideas have greater in£uence on policy making than others. Ideas as programs Programmatic ideas help actors to devise concrete solutions to their policy problems.47 These are often technical and professional ideas that specify cause-and-e¡ect relationships and prescribe a precise course of policy action. They are often presented in policy briefs, position papers, advisory memos to policy makers and congressional testimony. Actors use these ideas self-consciously and deliberately. Examples include speci¢c supply-side and industrial policy proposals for revitalizing the U.S. economy. During the late 1970s there was tremendous debate among policymaking elites and economists as to how best to solve the nation's twin economic problems, economic stagnation and double digit in£ation (stag£ation). However, most agreed that standard Keynesian policies were failing because the inverse relationship between unemployment and in£ation as represented by the well-known Phillips curve that had guided Keynesian policy making for decades no longer held. As a result, Keynesianism fell into disrepute and an atmosphere of intellectual crisis prevailed among economists and policy makers.48 A variety of alternatives emerged. For instance, supply-side economists urged that deep cuts in marginal income tax rates for individuals as well as corporate income taxes would stimulate capital investment thereby increasing economic growth and reducing unemployment. Moreover, supply siders argued that this could be done without exacerbating in£ation because these tax cuts would stimulate investment rather than consumption. Following Arthur La¡er, an economist at the University of Southern California, some also believed that tax cuts would reduce budget de¢cits because the increased revenues stemming from reinvigorated economic activity would more than compensate for those lost by lowering marginal tax rates.49

387 Many liberal and conservative economists criticized supply-side economics.50 However, programmatic ideas often appeal to policy makers more because they provide a clear and concise course of action than because economists agree on their theoretical rigor or empirical validity.51 In this regard, supply-side economics had a tremendous advantage over the alternatives because neither its policy recommendations nor its account of how tax cuts would resolve the stag£ation problem were complicated. Just cut taxes and everything else would automatically fall into place. In contrast, industrial-policy advocates argued that stag£ation was rooted in the institutional arrangement of the economy and thus favored policies that involved complex government interventions, such as forming tripartite planning boards involving business, labor, and government leaders and creating new government agencies to channel investment capital to key industries and ¢rms ^ prescriptions that called on government to build new institutions, pick industrial winners and losers, and ¢gure out how to ¢nance additional government spending.52 The fact that this sort of complexity was unnecessary within the supply-side framework was an important reason why policy makers favored it.53 Thus, although there were a variety of policy road maps around, those that were simplest and easiest to read had an edge. Cognitive clarity was further enhanced by the fact that, although some supply siders disagreed that tax cuts would reduce the budget de¢cit, they all concurred that tax cuts were necessary. As a result, they constituted a united intellectual front when it came to making policy recommendations.54 This was not true of industrial-policy advocates. While some wanted to establish a government investment bank, modeled after the New Deal's Reconstruction Finance Corporation, to revitalize old troubled industries like steel and automobiles, others favored channeling investment into new industries, such as computers, electronics, and biotechnology, at the expense of traditional manufacturing. While some wanted centralized corporatist advisory boards to coordinate research and development strategies and devise selective tax cuts and export promotion schemes, others rejected corporatism and argued for more decentralized forms of cooperative economic decision making. This dissention made it impossible to forge a clear, concise, and uni¢ed set of policy proposals and, as a result, undermined the appeal of industrial policy to policy makers.55 In fact, supply siders worked hard to package their ideas in clear and simple terms. Several popularized versions of the argument were written and disseminated widely to policy makers and the general public.

388 Notable among them was a series of editorials written by Jude Wanniski in The Wall Street Journal and George Gilder's best seller, Wealth and Poverty, which was serialized in several newspapers and adopted as a Book-of-the-Month Club selection.56 These presented the supply-side program in uncomplicated terms, often referring in particular to the so-called La¡er curve, an elementary depiction of the idea that lower tax rates increased revenues. The La¡er curve became a powerful pedagogical symbol that many supply siders used when presenting their position. It was a symbol that generated tremendous publicity in newspapers and magazines and helped put supply-side economics at the center of the burgeoning policy debate.57 Of course, politically liberal academics and journalists writing for Business Week, The Washington Post, The New Republic, and certain other publications tried to popularize the industrial-policy alternatives. But as Robert Reich and Ira Magaziner, two of the most prominent industrial-policy supporters, admitted later, their ideas failed to have more impact in Washington because they had not streamlined them enough for policy makers and so industrial policy remained a vague and sometimes contradictory prescription for action.58 Furthermore, they failed to develop an attractive pedagogical symbol that could rivet attention like the supply siders' La¡er curve or the Keynesians' Phillips curve before that. Such symbols have often been important in convincing politicians of the merits of a particular theoretical approach to economic policy making.59 Although the supply-side program was relatively simple in its own right, a sophisticated and well-funded organizational infrastructure helped supply siders to package their ideas as succinctly as possible. During the 1970s, in response to the perceived domination of Washington politics by liberals, conservative think tanks, such as the Heritage Foundation, the American Enterprise Institute, and the Manhattan Institute, pioneered aggressive approaches to distilling academic knowledge into simple forms and disseminating them to the government through brief position papers and to the public through popular books, journal articles, radio and television appearances, and op-ed pieces in the newspapers. Gilder's book, for instance, was underwritten by the Manhattan Institute. In contrast to moderate and liberal think tanks, such as the Brookings Institution, where industrial-policy advocates enjoyed some support, these conservative organizations specialized in packaging and marketing rather than creating new ideas and viewed political advising more as an exercise in intellectual salesmanship than scholarship. The Heritage Foundation in particular pushed the supply-side argument in this way.60 Industrial-policy proponents were at a disadvantage without

389 comparable organizational support. Hence, the cognitive clarity and simplicity of supply-side ideas and thus their appeal to policy makers as well as the public depended not just on the nature of the ideas themselves, but also on the self-interested, strategic e¡orts of actors deliberately to render them in this way as an endogenous part of the struggle over public policy. It is worth noting that there have also been other cases where parsimony, or the lack thereof, was important in determining the fortunes of programmatic ideas. First, despite the fact that many large corporations, unions, and other well-¢nanced groups backed the Clinton administration's proposed health-care reforms in 1993^1994, the proposal was never enacted in part because the administration presented it in excessively vague, complex, and ambiguous terms that, on the one hand, failed to unify support within the Democratic party, Congress, and the general public and, on the other hand, created an opportunity for conservative opponents to argue e¡ectively that it was a dangerously complicated and confused proposal.61 Second, regardless of ¢erce opposition from the dominant corporations and unions in the airline and trucking industries, economic deregulation proceeded in the United States during the late 1970s and early 1980s in both industries in part because reform was conceptually uncomplicated, logical, and thus conducive to consensus building among policy makers, academic experts, and government regulators.62 In both cases, parsimony mattered in ways that were relatively independent of the alignment of material interests and resources. Ideas as paradigms Paradigms constitute broad cognitive constraints on the range of solutions that actors perceive and deem useful for solving problems. In contrast to programmatic ideas, which are precise, concrete, and policyspeci¢c courses of action articulated consciously by policy makers and experts in the cognitive foreground, paradigms generally reside in their cognitive backgrounds as underlying theoretical and ontological assumptions about how the world works. Insofar as economic policy is concerned, they are typically revealed in core economics curricula in graduate schools, seminal theoretical texts, and other abstract academic publications written by esteemed scholars.63 Paradigmatic e¡ects are profound because they de¢ne the terrain of policy discourse.64 When programmatic ideas ¢t the dominant paradigm they appear natural

390 and familiar and, as a result, are more likely to appeal to policy makers than alternatives that do not.65 Some paradigms are more dominant than others. Important here is the degree to which they are institutionalized within leading universities, think tanks, and professional organizations that provide policy makers with a particular cognitive world view. During the 1970s and early 1980s, the major economics departments in the country, such as those at the University of Chicago, Harvard, and Stanford, the top economics journals like the American Economic Review, and virtually all of the major liberal and conservative think tanks embraced the paradigmatic principles of neoclassical economics. The heterodox paradigms like institutional economics and Marxism received more attention at less elite schools like Michigan State University, Rutgers, and the University of Massachusetts-Amherst, less conventional journals, including the Journal of Economic Issues and the Review of Radical Political Economics, and more marginal think tanks like the left-wing Institute for Policy Studies.66 Insofar as the appeal of ideas is derived in part from the status of their sponsors67 the fact that neoclassical economics was associated closest with the most prestigious departments, journals, and research institutes certainly enhanced its in£uence. As a result, neoclassical principles dominated economic discourse and the paradigm's central tenets, which most policy makers and economists took for granted, limited the range of solutions to economic problems that they viewed as making sense.68 Of particular importance were the core neoclassical assumptions that markets develop naturally; that a healthy economy depends on the ability of individual economic actors to pursue their self interests; that competition among private actors is the source of economic innovation and growth; and that excessive government intervention undermines e¤cient market activity. These assumptions took on special signi¢cance in the late 1970s. Consensus around Keynesian policy prescriptions had dissolved and no programmatic alternative had emerged yet to replace it as the new policy-making standard.69 As a result, most economists and policy makers, confronted with the need to solve the stag£ation riddle, fell back on their deeply held paradigmatic assumptions for guidance. Indeed, the economics profession was in theoretical disarray, had di¤culty identifying appropriate policy responses to current economic problems and, as a result, began to suspect that policy was often futile and that government should simply leave market forces alone. At the

391 level of abstract theory this was re£ected in the growing popularity among academic economists of rational expectations theory, which suggested that policy often failed because people anticipated policy moves and adjusted their behavior in advance in ways that neutralized the impact of policy, an argument thoroughly consistent with neoclassical assumptions that government intervention is often ine¡ective, if not counter productive. At the level of programmatic policy prescription this created a situation ripe for laissez-faire approaches like supplyside economics that ¢t closely with the prevailing theoretical pessimism of the economics profession and, more important, the core assumptions of the neoclassical paradigm.70 In particular, supply siders were true to these assumptions in arguing that the country's economic problems were due to excessive government interference with the economy, notably through burdensome taxation, that undermined the individual initiative of corporations and workers. After all, they asked, why should corporations invest and innovate in order to increase pro¢ts and why should employees work harder to earn more money if the government appropriates the fruits of these e¡orts through high taxes? In other words, if government left these economic actors alone by reducing taxes, their entrepreneurialism, competitive spirit, and work ethic would £ourish naturally, thus spawning technological innovations, new markets, more jobs, greater productivity, and a healthier economy. In contrast, industrial-policy approaches were based on institutional economics, a paradigm whose assumptions deviated sharply from neoclassical economics. In brief, institutional economics does not assume that markets occur naturally; that the pursuit of individual self-interest necessarily results in a healthy economy; that private competition is necessarily the key to economic innovation and growth; or that government intervention always undermines market e¤ciency.71 As a result, industrial-policy advocates o¡ered programmatic ideas that contradicted the basic neoclassical paradigm. They called for government to help create new markets and facilitate the competitiveness of U.S. ¢rms by providing considerable assistance through the provision of research and development funds, technology, tari¡ protection, workertraining programs, and infrastructure. Because these things were expensive they might require higher taxes and, as a result, still more government intervention. Similarly, they suggested that a healthy economy entailed long-range investment strategies that required corporations to worry less about immediate pro¢tability and more about developing new products and production technologies that would secure their long-term competitive advantage. This implied higher taxes on

392 short-term capital gains as a way to entice investors to develop more patient investment strategies. Industrial-policy proponents also stressed how the key economic actors were not just self-interested individuals but organized groups, such as trade unions, business associations, and networks of ¢rms, that needed to cooperate as well as compete in ways that would improve the economy's health, and would do so only if government created the proper incentives.72 As industrial-policy supporters eventually acknowledged, one of their problems was that their programmatic ideas did not resonate well with the dominant neoclassical paradigm, whose assumptions remained largely unchallenged.73 Indeed, even some politically liberal economists attacked industrial policy arguing that the nation's economic condition stemmed from macroeconomic and cyclical problems, not institutional ones ^ a critique that was consistent with neoclassical orthodoxy rather than the heterodox canons of institutional economics.74 In short, the paradigmatic advantage went to supply-side economics. Ideas as public sentiments Whereas paradigmatic ideas constrain the cognitive range of solutions that policy makers perceive as instrumentally useful, public sentiment constrains the normative range of solutions that they view as politically acceptable. After all, even if a solution is deemed instrumentally e¡ective, it may not receive serious consideration if it lacks political legitimacy. Public sentiment consists of broad-based attitudes and normative assumptions about what is desirable or not. Because public sentiment covers such a wide range of issues, it does not necessarily constitute a coherent, consistent set of issue positions, i.e., broad-based sentiment in one issue area may contradict that in another. In contrast to paradigms, which are assumptions held by policy makers and experts, public sentiments are assumptions held by large segments of the general public. Policy makers discern these through public-opinion polls and other forms of constituent feedback.75 Hence, public sentiments are generally not so taken for granted that they are invisible. The debate over economic policy was constrained by deep suspicions about the wasteful and corrupt ways of big government. These concerns have always been central to national public sentiment and have long been re£ected in opposition to budget de¢cits and high taxes,76 but they became particularly acute during the 1970s. Since the Second

393 World War, a majority of Americans almost always felt that their federal taxes were too high, especially if they perceived government spending as extravagant, but by the late 1970s this number had grown to over 70 percent of Americans polled.77 Furthermore, surveys indicated that by 1980 the vast majority of citizens had become increasingly concerned about budget de¢cits, associated de¢cits with government pro£igacy, and favored a balanced budget.78 As a result, reducing de¢cits had become code in Washington for reducing the size and exorbitance of government.79 Indeed, politicians who argued that de¢cits were benign often outraged their constituents and learned that proposing almost anything that might exacerbate de¢cits was politically unacceptable. Even the liberal Democratic black caucus that traditionally advocated more spending on government programs at the expense of larger de¢cits began calling for budget balancing through spending cuts.80 All of this bore heavily on e¡orts to tackle the stag£ation problem. In such an anti-big-government environment industrial-policy supporters faced severe obstacles. After all, their arguments for more federal spending on research and development, infrastructure, and the like amounted to calls for bigger government. So did their prescriptions about how to pay for it because they generally recommended either more de¢cits or tax increases. Of course, funds could be redirected from other programs, notably defense, as some industrial-policy advocates urged, but this was a di¤cult position to defend politically because public support for additional defense spending was rising sharply, especially after the Iran hostage crisis and the Soviet Union's invasion of Afghanistan in 1979.81 In contrast, the supply-side program promised less government through lower taxes, smaller budget de¢cits, and reductions in federal spending, especially social-welfare programs. Policy makers from both political parties recognized how well all of this resonated with prevailing public sentiment, which is one reason why Democrats as well as Republicans began to suggest tax cuts during the late 1970s.82 It is important to remember that policy makers themselves may hold these same attitudes. Nowhere was this more evident than with Ronald Reagan. Indeed, Reagan's deep suspicion of big government was one reason why he favored tax cuts so strongly.83 Edwin Meese, one of Reagan's long-time advisors, remarked that this basic perspective was never open to question or debate in the White House, and other members of Reagan's inner circle reported that they were supposed to be keepers of this central ideological faith. For instance, when it became

394 apparent that at least some legislative pork would have to be written into the 1981 Tax Act in order to ensure its passage through Congress, Reagan reluctantly agreed, but drew the line when it came to reducing the tax cut for individuals and ordered his lieutenants to stand ¢rm on this principle.84 Thus, ideas about what is socially appropriate constrain policy makers in two ways. First, and most important, public sentiment a¡ects the constituent pressures to which policy makers pay close attention. Second, policy makers may also hold these sentiments, which then limit the range of policy options they themselves believe to be normatively acceptable. Deeply held public sentiments become especially in£uential during policy episodes veiled in uncertainty. After all, the debate between supply siders and industrial-policy supporters was ¢erce precisely because there was no consensus about the causes of stag£ation.85 When the truth is illusive and knowledge vacuums such as this arise policy makers place greater emphasis on whether a particular policy option coincides with important social values.86 Nonetheless, although public sentiment as well as intellectual paradigms constrain the range of options that policy makers are likely to consider, they are rarely so precise and consistent that they determine speci¢c policy choices in their own right.87 How programmatic ideas are strategically framed is also important. Ideas as frames Ideas provide actors with symbols and concepts with which to frame solutions to policy problems in normatively acceptable terms through transposition and bricolage. Indeed, in many policy areas the programmatic ideas that become most in£uential are those that experts, advisors, and others frame in ways that most closely coincide with or seem to protect central cultural values.88 Frames appear typically in the public pronouncements of policy makers and their aides, such as sound bites, campaign speeches, press releases, and other very public statements designed to muster public support for policy proposals. Frequently the repertoires from which framers select symbols and concepts are precisely the values and opinions that are re£ected in public sentiment in the ¢rst place. In this regard, actors intentionally appropriate and manipulate public sentiments for their own purposes. Hence, policy makers are not just constrained by public sentiment; they also enjoy some leeway to mobilize it toward their own ends.89

395 Many scholars described the 1981 tax reform as the result of intense lobbying by interest groups and political factions operating through the decentralized and fragmented structure of the state.90 This is an important and well-known part of the story. However, historians have shown that some of the most important tax reforms, including the initial adoption of income taxes, were passed only after politicians framed them in ways that were consistent with prevailing public sentiment.91 Supply siders were deft at framing their programmatic ideas in this way.92 First, they combined the tax-cut strategy with Je¡ersonian images of a big, centralized, and expanding government whose consequences were devastating to the country and that could best be brought under control by limiting politicians' access to revenues.93 Gilder, for instance, often argued that high taxes jeopardized individual freedom and public safety by encouraging tax evasion and other criminal activities and undermined the traditional American family by reducing net family income, forcing wives into the labor market, threatening their husband's manhood and fueling higher divorce rates.94 Thus, his frame for justifying steep supply-side tax cuts was a bricolage that combined cherished beliefs in family and freedom with suspicions of big government. Second, supply siders transposed historical examples to frame their arguments in ways that were intended to appeal to the American public's normative sensibilities. Among the most striking examples was when Reagan and his advisors sought to support the business tax cut strategy by arguing that this was exactly what President Kennedy had done in 1963 to combat recession ^ a strategy so successful, they claimed, that it generated an additional $54 million in federal revenue, as La¡er would have predicted.95 Policy makers use famous historical events particularly if they are associated with public ¢gures with high prestige like Kennedy as well as broad normative principles, such as Je¡ersonianism, for framing purposes. Commenting on the supplyside victory over industrial policy, one political observer noted that Reagan was a master framer, o¡ering the public, `àn amalgam of images, aspirations, and expectations which resonated very powerfully with American ideas of personal and national identity. There was the challenge that liberals were unable to answer e¡ectively.'' 96 Indeed, industrial-policy supporters stumbled badly over framing issues and seemed always to be on the defensive, in part because conservatives were quick to frame industrial policy in negative ways. For example, conservatives attacked industrial policy as a form of state planning

396 and, by implication, socialism.97 Gilder repeatedly described industrialpolicy advocates of all stripes, such as Lester Thurow, John Kenneth Galbraith, and Robert Heilbroner, as socialists and crypto-Marxists.98 Industrial-policy supporters, including Reich, Magaziner, and Thurow, responded by refusing to use the word planning at all and vehemently denied that this was what they had in mind precisely because of their concerns over this framing problem.99 Moreover, they searched hard for alternative language that might be more publicly palatable. For instance, industrial-policy advocates advising the Carter administration tried to shift attention away from planning imagery while also appealing to blue-collar workers in traditional manufacturing industries. Thus, sociologist Amitai Etzioni suggested the phrase ``reindustrialization of America,'' but after Carter's arch political rival, Senator Edward Kennedy, happened to advance the idea of a Reindustrialization Corporation in a speech on how to solve the country's economic woes, Etzioni's term was unacceptable in the White House. Similarly, Thurow, Reich, and others substituted terms like ``competitiveness policy'' and `ìndustrial strategy'' to avoid the stigma and normative controversy surrounding the planning imagery.100 In the end, however, observers agreed that, because industrial-policy supporters were unable to reframe their arguments in ways that were more appealing politically, industrial policy remained an ideological lightening rod of the worst kind.101 Supply siders also e¡ectively neutralized the impact of many of the industrial-policy advocates' favorite symbols. For instance, supporters of industrial policy often referred to the old Reconstruction Finance Corporation as a symbol of how the U.S. economy had enjoyed great success when government provided investment capital to businesses. However, conservatives countered by recalling that the agency had become mired in corruption, scandal, and other problems during its later years and therefore really demonstrated the need for a laissez-faire approach. Similarly, industrial-policy advocates pointed to Japan as an example of how mercantilist policies, directed by the Ministry of International Trade and Industry, could stimulate economic growth, but conservatives responded that Japan's success lay instead in privatesector market forces, such as aggressive corporations, high savings rates, low capital costs, innovative management techniques, fewer lawyers, and less bureaucratic red tape.102 Hence, framing was a dynamic process that evolved through struggle as one actor responded to the symbolic overtures of another, often by trying to appropriate the opponent's symbols for their own purposes. It was a process made possible by the

397 malleability of symbols, historical examples, and analogies, driven by the clash of opposing frames and involving considerable creativity and ingenuity to transpose and recombine a variety of discursive artifacts. Two issues require further elaboration. First, the selection of symbols and rhetoric for framing purposes is often a very strategic and deliberate activity because framers are acutely aware that a frame that ¢ts the prevailing public mood is important in generating public support for policy proposals. For example, framing tax-cut proposals as representing a solution to budget de¢cits and big government became increasingly popular among supply siders during the 1980 presidential campaign because Reagan's campaign advisors recognized from public-opinion polls that de¢cits had become a particularly important public concern.103 Indeed, whether a frame is e¡ective often turns on how well framers monitor public sentiment, an activity that is, of course, a function of the level of resources at their disposal. One reason why the Reagan campaign was more e¡ective than the Democrats at framing issues such as these in 1980 was that they extensively pretested their frames with focus groups and in selected media markets before they broadcast them more widely on television and radio. They even tested their ads against Democratic ads. Because they had less money the Democrats did very little of this and su¡ered in the campaign as a result.104 The point is that although everyone tries to frame their policy proposals as e¡ectively as possible, framers understand that the quality and e¡ectiveness of frames is variable and that this can be discerned ahead of time, given adequate resources. Second, although creativity is an important part of the framing process, so is the ability to project frames, once they have been built, to the intended audience. The supply siders' eventual success turned in part on being able to do this better than their opponents. Again organizational resources were important. Conservative think tanks were more interested and sophisticated in this sort of activity and had more resources to dedicate to it than their liberal counterparts.105 Indeed, given the fact that de¢cits in 1980 were not substantially larger in real terms or as a percentage of Gross National Product than they had been for the previous ¢fteen years, this e¡ort in conjunction with a massive conservative publicity campaign during the 1970s may have exacerbated public concern over de¢cits in the ¢rst place.106 Moreover, during the 1980 presidential campaign, when the level of public debate over these issues was especially intense, Reagan had considerably more money for advertising his position than Carter.107

398 Thus, especially insofar as frames are concerned, there is a closer and more complex relationship among interests, resources, and ideas than much of the literature on ideas and policy making suggests. Put simply, the ability to in£uence policy making depends in part on ¢nding which frames are the most appropriate and projecting them to the public ^ tasks that are endogenous to the policy-making struggle and that often depend, in turn, on the ability of various interests to dedicate resources to them. However, this does not mean that interests and resources alone determine policy-making outcomes. If they did, then frames would not matter, policy-making elites would not dedicate nearly as much money, time, and energy as they do to ¢guring out which frames work best and clever campaign advisers and spin doctors would not play such prominent roles in politics. Conclusion To summarize brie£y, juxtaposing the analytic strengths and weaknesses of historical and organizational institutionalism enables us to disentangle what we mean by ideas and to understand better how di¡erent types of ideas a¡ect policy making. Ideas provide speci¢c solutions to policy problems, constrain the cognitive and normative range of solutions that policy makers are likely to consider, and constitute symbols and concepts that enable actors to construct frames with which to legitimize their policy proposals. This last point is especially important because it is the most obvious way in which my position di¡ers from both organizational and historical institutionalism. Although organizational institutionalists focus almost exclusively on the unintended e¡ects of largely taken-for-granted ideas,108 the events depicted above show that the intentional manipulation of ideas through cognitively clear and concise packaging and normatively acceptable framing also requires theoretical attention. Most historical institutionalists who take ideas seriously also neglect how actors use ideas in this way, particularly insofar as frames are concerned.109 This is particularly ironic in their case because several prominent historical institutionalists also contributed to a literature on social movements that speaks about the importance of cultural repertoires and idioms in framing movement issues.110 It emphasizes that broad cultural themes provide a resonant backdrop for political messages; that messages are deliberately framed for public consumption; that frames are built from the raw materials provided by the broader

399 culture; and that this entails much contention among framed messages.111 Indeed, the rise of supply-side economics involved just such a process. By conceptualizing this process for policy making, this article elevates agency to a more prominent and appropriate position in the analysis than either organizational or historical institutionalists have done and, as a result, provides a more balanced assessment of the ideational foundations of action and constraint. It also demonstrates that the ideational foundation of action has both a cognitive and normative dimension. My argument also di¡ers from organizational institutionalism by emphasizing that an analysis of powerful organizations and con£ict must be incorporated into our theories of how ideas a¡ect policy making. Critics have charged that organizational institutionalism rejects realist or materialist arguments, ignores the central role of con£ict and struggle in institution building and policy-making, and avoids discussing how powerful organizations help enact the ideas that frame governmental policies.112 The rise of supply-side economics was very much an intellectually and politically contested process in which powerful think tanks and other organizations mobilized substantial ¢nancial resources to in£uence policy making at the ideational level. In this regard, the argument presented here resembles that of other scholars who have shown that the rise and fall of policy ideas is a highly con£ictual process.113 Researchers who seek to bring ideas and culture back into the analysis of politics have been criticized for failing to develop empirically grounded causal explanations and generalizations.114 By comparing the political fortunes of two opposing sets of programmatic ideas, supply-side economics, and industrial policy, my argument contributes to our general understanding of the causal processes whereby some programmatic ideas a¡ect policy making more than others. Speci¢cally, the probability that a programmatic idea will a¡ect policy making varies in part according to the extent to which it provides clear and simple solutions to instrumental problems, ¢ts existing paradigms, conforms to prevailing public sentiment, and is framed in socially appropriate ways.115 Whether these e¡ects are patterned and systematically related to each other remains an open question, but one might hypothesize that they operate in a hierarchically nested fashion according to the following logic, which may not always be fully apparent to policy makers: Given the perception of a problem for which policy makers seek a remedy, a programmatic idea must be credible to them in the

400 sense that it ¢ts the dominant policy paradigm. If it ¢ts, then they must believe that it provides an e¡ective solution to a policy-making problem ^ a perception that is enhanced to the extent that the idea is packaged in simple enough terms for policy makers to understand and that it provides clear policy guidelines. If policy makers perceive an idea to be useful in this sense, then it must ¢t with prevailing public sentiment. If it does not, then it must be framed so as to improve this ¢t. In other words, it is the cumulative e¡ect of di¡erent types of ideas that in£uences whether a programmatic idea carries the day. For example, it was not just the fact that supply siders characterized industrial policy as socialism that ensured their success. After all, conservatives have been making such charges against liberals for decades. Instead, it was the combination of that frame and others combined with all the other e¡ects described above that helped make the di¡erence. However, as I have stressed, arguing that ideational conditions a¡ect policy-making outcomes does not mean that interests are unimportant. My claim is simply that fulfulling the criteria of simplicity and clarity, cognitive and normative ¢t and proper framing are necessary but not inevitably su¤cient conditions for policy makers to adopt and deploy a programmatic idea. Indeed, the fact that the victory of supply-side economics over industrial policy turned on the material and organizational resources of people with explicit political agendas as well as the e¡ects of various types of ideas suggests that it is the interaction of ideas and interests that is ultimately the important thing for scholars to consider.116 In this regard, my argument also di¡ers from that often made by non-institutionalists who maintain that the ideas that in£uence policy making simply re£ect the dominant material interests in society.117 In particular, although the in£uence of organizational resources has a heavy e¡ect on building e¡ective frames, actors build frames from the already existing normative elements that constitute public sentiments, which do not arise simply because of the manipulations of powerful interests.118 Furthermore, although the capacity to package programmatic ideas in parsimonious ways is enhanced by their links to organizational resources, these programs must ¢t with underlying paradigmatic assumptions whose origins and institutionalization are not due solely to the power of political and economic interests over universities and other arenas of intellectual discourse.119 Indeed, the relationship among ideas, interests, and public policy is a complex one. A comprehensive analysis of the interactions among di¡erent types of ideas and interests,

401 particularly with respect to paradigms and public sentiments, is beyond the scope of this article, but specifying di¡erent types of ideas and their possible e¡ects is an important starting point for such an investigation. Similarly, a clearer speci¢cation of ideas and their e¡ects is important for those who insist that interests have very little impact on policymaking outcomes. For instance, Dobbin maintained that national principles regarding the desirable relationship between state and economy rather than the material interests of business and political elites determined railroad policy.120 He based his argument on an analysis of the public pronouncements, speeches, and o¤cial congressional and parliamentary proceedings recorded at the time. However, people may say one thing publicly but another privately, in order to shield their true motives from public scrutiny and otherwise legitimize their behavior.121 Although Dobbin recognized that politicians may be committed to taken-for-granted cognitive paradigms, by focusing on public testimonies he neglected to investigate the possibility that they may also engage in much more self-conscious framing exercises to conceal ulterior motives including self interest. As a result, it is di¤cult to tell whether interests were at work in his empirical cases. Because his methodology was not sensitive to the full array of ideas and how they might have a¡ected railroad policy making he failed to provide the sort of ``crucial experiment'' 122 that could have resolved the issue. A better test would have been to compare the public pronouncements against more private documents, such as personal diaries and correspondence where actors are less likely to conceal their true motives if they di¡er from those that they express publicly. Doing so would have created an opportunity to determine the degree to which the private thoughts of actors matched their public declarations, whether framing had occurred to conceal ulterior motives and whether self interests were involved. Of course, this still begs the question of how actors with particular beliefs come to occupy critical policy-making positions in the ¢rst place ^ a question posed by historical institutionalists and non-institutionalists alike and one that again focuses attention on the possible interactions between interests and ideas. John Maynard Keynes once wrote that the ideas of economists, regardless of their empirical truth, are more powerful than is generally understood.123 Nevertheless, those engaged in the ideas-versus-interests debate have run into methodological problems trying to decipher how much power ideas have on policy making because they have not speci¢ed precisely enough what they mean by ideas. My purpose has been to

402 suggest how we might think more clearly about ideas and their e¡ects so that we can begin to overcome these methodological hurdles. This is the only way we can determine how powerful ideas really are. Acknowledgments For comments on earlier versions I am indebted to Robert Alford, Steve Brint, Bruce Carruthers, Frank Dobbin, Bill Form, Roger Friedland, Judith Goldstein, Peter Hall, Bob Jenkins, Peter Kjaer, John Meyer, Ove K. Pedersen, Frances Fox Piven, Dick Scott, Jim Shoch, Yasemin Soysal, Ann Swidler, Rosemary Taylor, the Theory and Society Editors, and seminar participants at Harvard, Oxford, Stanford, Stockholm, and Ohio State Universities, and the Copenhagen Business School. Notes 1. E.g., Frank Dobbin, Forging Industrial Policy: The United States, Britain, and France in the Railway Age (New York: Cambridge University Press, 1994); Judith Goldstein and Robert O. Keohane, editors, Ideas and Foreign Policy: Beliefs, Institutions, and Political Change (Ithaca: Cornell University Press, 1993); Peter Hall, editor, The Political Power of Economic Ideas (Princeton: Princeton University Press, 1989). 2. Mark M. Blyth, `Àny More Bright Ideas? The Ideational Turn of Comparative Political Economy,'' Comparative Politics 29/2 (1997): 229^250; John Kurt Jacobsen, ``Much Ado About Ideas: The Cognitive Factor in Economic Policy,'' World Politics 47 (1995): 283^310; Albert S. Yee, ``The Causal E¡ects of Ideas on Policies,'' International Organization 50/1 (1996): 69^108. 3. Margaret R. Somers, ``What's Political or Cultural about Political Culture and the Public Sphere? Toward an Historical Sociology of Concept Formation,'' Sociological Theory 13/2 (1995): 113^144; Kathleen Thelen and Sven Steinmo, ``Historical Institutionalism in Comparative Politics,'' in Sven Steinmo, Kathleen Thelen, and Frank Longstreth, editors, Structuring Politics: Historical Institutionalism in Comparative Analysis (New York: Cambridge University Press, 1992), 1^32. 4. Despite this analytic separation there are, of course, important relationships between ideas and interests. Notably, there is convincing evidence that self interest as an important motivation in the Western world is a historically speci¢c social construction that emerged only after the concept of the individual gained privileged position over the concept of community. Albert O. Hirschman, The Passions and the Interests (Princeton: Princeton University Press, 1977). Thus, subjectively understood interests are in fact a particular type of idea. Nevertheless, as Weber recognized in his famous reference to how ideas act as the switchmen that determine the tracks along which interests push action, simply to dismiss the distinction between ideas and interests in this way is to ignore important di¡erences in types

403

5.

6. 7. 8.

9.

10.

11. 12.

13.

14. 15.

of human motivation and determinants of political and other social outcomes. Max Weber, ``The Social Psychology of the World Religions,'' in Hans Gerth and C. Wright Mills, editors, From Max Weber: Essays in Sociology (New York: Oxford University Press, 1946), 280. Sven Steinmo, Kathleen Thelen, and Frank Longstreth, Structuring Politics: Historical Institutionalism in Comparative Perspective (New York: Cambridge University Press, 1992). Walter W. Powell and Paul J. DiMaggio, editors, The New Institutionalism in Organizational Analysis (Chicago: University of Chicago Press, 1991). Dobbin, Forging Industrial Policy. Peter A. Hall and Rosemary C. R. Taylor, ``Political Science and the Three New Institutionalisms,'' Political Studies 44/4 (1996): 936^957; W. Richard Scott, `Ìnstitutional Analysis: Variance and Process Theory Approaches,'' in W. Richard Scott and John W. Meyer, editors, Institutional Environments and Organizations (Thousand Oaks, Cal.: Sage, 1994), 81^99. John L. Campbell and Ove K. Pedersen, ``Theories of Institutional Change in the Postcommunist Context,'' in John L. Campbell and Ove K. Pedersen, editors, Legacies of Change: Transformations of Postcommunist European Economies (New York: Aldine de Gruyter, 1996), 3^26; Roger Friedland and Robert R. Alford, ``Bringing Society Back In: Symbols, Practices, and Institutional Contradictions,'' in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis (Chicago: University of Chicago Press, 1991), 232^263; William H. Sewell, Jr., `À Theory of Structure: Duality, Agency, and Transformation,''American Journal of Sociology 91 (1992): 1^29. Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol, editors, Bringing the State Back In (New York: Cambridge University Press, 1985); Peter A. Hall, Governing the Economy (New York: Oxford University Press, 1986); Peter J. Katzenstein, editor, Between Power and Plenty (Madison: University of Wisconsin Press, 1978). There have been very few attempts to describe the central paradigmatic features of historical institutionalism. (But see Theda Skocpol, ``Bringing the State Back In,'' in Evans et al., editors, Bringing the State Back In, 3^37; Thelen and Steinmo, ``Historical Institutionalism in Comparative Politics.'') Hence, the characterization that follows is based largely on empirical work within this tradition. Thelen and Steinmo, ``Historical Institutionalism in Comparative Politics,'' 2. Paul Quirk, ``Deregulation and the Politics of Ideas in Congress,'' in Jane J. Mansbridge, editor, Beyond Self-Interest (Chicago: University of Chicago Press, 1990), 183^199; Dietrich Rueschemeyer and Theda Skocpol, editors, States, Social Knowledge, and the Origins of Modern Social Policies (Princeton: Princeton University Press, 1996); Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge: Harvard University Press, 1992); Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877^1920 (New York: Cambridge University Press, 1982). Hall, The Political Power of Economic Ideas; Margaret Weir and Theda Skocpol, ``State Structures and the Possibilities for `Keynesian' Responses to the Great Depression in Sweden, Britain, and the United States,'' in Evans et al., Bringing the State Back In, 107^168. Peter M. Haas, `Ìntroduction: Epistemic Communities and International Policy Coordination,'' International Organization 46 (1992): 1^35. Rueschemeyer and Skocpol, States, Social Knowledge, and the Origins of Modern Social Policies.

404 16. Peter A. Hall, ``Conclusion: The Politics of Keynesian Ideas,'' in Hall, The Political Power of Economic Ideas, 361^391. 17. Weir and Skocpol, ``State Structures and the Possibilities for `Keynesian' Responses to the Great Depression in Sweden, Britain, and the United States.'' 18. G. John Ikenberry, ``Conclusion: An Institutional Approach to Foreign Economic Policy,'' in G. John Ikenberry, David A. Lake, and Michael Mastanduno, editors, The State and American Foreign Economic Policy (Ithaca: Cornell University Press, 1988), 242; Thelen and Steinmo, ``Historical Institutionalism in Comparative Politics,'' 14. 19. Some scholars have attributed the historical institutionalists' problem of undertheorizing the development and impact of ideas to excessively state-centered analytic assumptions. Friedland and Alford, ``Bringing Society Back In.'' However, the problem stems more from the materialist theoretical heritage of the perspective. Indeed, many historical institutionalists rejected the state-centered versus society-centered dichotomy but still ignored the in£uence of ideas on policy making. E.g., John L. Campbell, Collapse of an Industry: Nuclear Power and the Contradictions of U.S. Policy (Ithaca: Cornell University Press, 1988); John L. Campbell and Leon N. Lindberg, ``Property Rights and the Organization of Economic Activity by the State,'' American Sociological Review 55 (1990): 634^ 647; Hall, Governing the Economy; Katzenstein, Between Power and Plenty. 20. Judith Goldstein, Ideas, Interests, and American Trade Policy (Ithaca: Cornell University Press, 1993); Judith Goldstein and Robert O. Keohane, `Ìdeas and Foreign Policy: An Analytical Framework,'' in Goldstein and Keohane, Ideas and Foreign Policy: Beliefs, Institutions, and Political Change, 3^30; Paul Pierson, Dismantling the Welfare State? Reagan, Thatcher and the Politics of Retrenchment (New York: Cambridge University Press, 1994). 21. Jacobsen, ``Much Ado About Ideas,'' 294^305; Yee, ``The Causal E¡ects of Ideas on Policies,'' 86^89. 22. Hall, ``Conclusion: The Politics of Keynesian Ideas''; Peter J. Katzenstein, ``Coping with Terrorism: Norms and Internal Security in Germany and Japan,'' in Goldstein and Keohane, Ideas and Foreign Policy: Beliefs, Institutions and Political Change, 265^295; Margaret Weir, Politics and Jobs: The Boundaries of Employment Policy in the United States (Princeton: Princeton University Press, 1992), 169. 23. Goldstein, Ideas, Interests and American Trade Policy Chap. 1; Weir, Politics and Jobs. 24. Kathleen Hall Jamieson, Packaging the Presidency (New York: Oxford University Press, 1996). 25. Yee, ``The Causal E¡ects of Ideas on Policies.'' 26. Hall, ``Conclusion: The Politics of Keynesian Ideas,'' 383^386. 27. Although generally not a central component of most historical institutional analyses, some historical institutionalists have also acknowledged that the impact of ideas on policy markers is heightened during times of economic or political uncertainty and ambiguity. Goldstein, Ideas, Interests and American Trade Policy, 3. 28. Paul J. DiMaggio and Walter W. Powell, `Ìntroduction,'' in Powell and DiMaggio, The New Institutionalism in Organizational Analysis, 1^38; John W. Meyer, John Boli, and George M. Thomas, `Òntology and Rationalization in the Western Cultural Account,'' in George Thomas, John Meyer, Francisco Ramirez, and John Bili, editors, Institutional Structure: Constituting State, Society and the Individual (Beverly Hills: Sage, 1987), 12^37; W. Richard Scott, Institutions and Organizations (Thousand Oaks, Cal.: Sage, 1995), Chap. 3.

405 29. John W. Meyer, John Boli, George M. Thomas, and Francisco O. Ramirez, ``World Society and the Nation State,'' American Journal of Sociology 103/1 (1997): 144^ 181; George M. Thomas, John W. Meyer, Francisco O. Ramirez, and John Boli, editors, Institutional Structure: Constituting State, Society, and the Individual (Newbury Park, Cal.: Sage, 1987); Pamela S. Tolbert and Lynne G. Zucker, `Ìnstitutional Sources of Change in the Formal Structure of Organizations: The Di¡usion of Civil Service Reform, 1880^1935,'' Administrative Science Quarterly 28 (1983): 22^39. 30. Dobbin, Forging Industrial Policy. 31. Ibid., 9^19. 32. Ronald Jepperson, `Ìnstitutions, Institutional E¡ects, and Institutionalism,'' in Powell and DiMaggio, The New Institutionalism in Organizational Analysis, 146. 33. W. Richard Scott, `Ìnstitutions and Organizations: Toward a Theoretical Synthesis,'' in W. Richard Scott and John W. Meyer, editors, Institutional Environments and Organizations (Thousand Oaks, Cal.: Sage, 1994), 66^68. 34. John W. Meyer, ``Rationalized Environments,'' in W. Richard Scott and John W. Meyer, editors, Institutional Environments and Organizations (Newbury Park, Cal.: Sage, 1994), 28^54; Walter W. Powell, ``The Transformation of Organizational Forms: How Useful is Organization Theory in Accounting for Social Change?'' in Roger Friedland and A. F. Robertson, editors, Beyond the Marketplace (New York: Aldine de Gruyter, 1990), 304. 35. Some scholars have argued that the failure to specify the causal processes through which structures enable and empower actors is partly due to the high level of abstraction at which organizational institutionalists often operate theoretically. Paul M. Hirsch and Michael Lounsbury, ``Putting the Organization Back into Organization Theory: Action, Change and the `New' Institutionalism,'' Journal of Management Inquiry, 6 (1997): 79^88; Paul M. Hirsch and Michael Lounsbury, `Ènding the Family Quarrel: Towards a Reconciliation of Òld' and `New' Institutionalism,'' American Behavioral Scientist 40 (1997): 406^418. However, it is also due to the fact that much of the empirical work done within this tradition involves the analysis of changes in large numbers of states or organizations that obscure the details of change that would be revealed by more ¢ne-grained case studies. For example, see many of the empirical studies in W. Richard Scott and John W. Meyer, editors, Institutional Environments and Organizations (Thousand Oaks, Cal.: Sage, 1994). 36. Martha Finnemore, ``Norms, Culture, and World Politics: Insights from Sociology's Institutionalism,'' International Organization 50/2 (1996): 325^347; Paul M. Hirsch, ``Sociology Without Social Structure: Neoinstitutional Theory Meets Brave New World,'' American Journal of Sociology 102/6 (1997): 1702^1723; Hirsch and Lounsbury, ``Putting the Organization Back into Organization Theory: Action, Change and the `New' Institutionalism.'' 37. Dobbin, Forging Industrial Policy. Elsewhere Dobbin does a much better job showing how cognitive structures are enabling. Notable is his discussion of how the failed paradigm of traditional economics, e.g., balanced budgets, guided policy innovation during the Great Depression by providing policy makers with a model of what not to do. Frank Dobbin, ``The Social Construction of the Great Depression: Industrial Policy During the 1930s in the United States, Britain and France,'' Theory and Society 22 (1993): 1^56. 38. Yasemin Soysal, Limits of Citizenship (Chicago: University of Chicago Press, 1994). Clearly, there is a similarity between Soysal's argument and that of the

406

39. 40. 41.

42.

43. 44.

45. 46.

47. 48. 49. 50. 51.

52.

historical institutionalists who argue that policies must be made to ¢t with prevailing societal norms and values. However, her treatment pays closer attention to the intricacies and politics of the transposition process as it unfolds in di¡erent countries and attends to how policy makers ¢t new policy ideas to the organizational as well as normative character of national political institutions. Sewell, `À Theory of Structure: Duality, Agency and Transformation.'' Mary Douglas, How Institutions Think (Syracuse: Syracuse University Press, 1986), 66^67. John L. Campbell, ``Mechanisms of Evolutionary Change in Economic Governance: Interaction, Interpretation and Bricolage,'' in Lars Magnusson and Jan Ottosson, editors, Evolutionary Economics and Path Dependency (Cheltenham, U.K.: Edward Elgar, 1997), 10^32; Walter W. Powell, `Èxpanding the Scope of Institutional Analysis,'' in Powell and DiMaggio, editors, The New Institutionalism in Organizational Analysis, 199. Ann Swidler, ``Culture in Action: Symbols and Strategies,'' American Sociological Review, 51 (1986): 273^286. See also Jack A. Goldstone, `Ìdeology, Cultural Frameworks, and the Process of Revolution,'' Theory and Society, 20 (1991): 405^ 453; David E. Snow, Burke Rochford, Steven Worden, and Robert Benford, ``Frame Alignment Processes, Micromobilization, and Movement Participation,'' American Sociological Review, 51 (1986): 464^481; David E. Snow and Robert Benford, ``Master Frames and Cycles of Protest,'' in Aldon Morris and Carol Mueller, editors, Frontiers in Social Movement Theory (New Haven: Yale University Press, 1992), 133^155. DiMaggio and Powell, `Ìntroduction,'' 24^25; Dobbin, Forging Industrial Policy, 19. Indeed, among historical institutionalists Peter Hall is probably the only one who has paid much attention to cognitive issues, and then primarily to identify the conditions under which shifts in cognitive paradigms occur rather than how they constrain policy making once they are established. Peter A. Hall, ``Policy Paradigms, Social Learning, and the State: The Case of Economic Policymaking in Britain,'' Comparative Politics 25/3 (1993): 275^296. DiMaggio and Powell, `Ìntroduction''; Jepperson, `Ìnstitutions, Institutional E¡ects, and Institutionalism.'' Dietrich Rueschemeyer and Theda Skocpol, ``Conclusion,'' in Rueschemeyer and Skocpol, editors, States, Social Knowledge, and the Origins of Modern Social Policies, 300; Scott, `Ìnstitutions and Organizations: Toward a Theoretical Synthesis.'' Weir, Politics and Jobs. Robert Heilbroner and William Milberg, The Crisis of Vision in Modern Economic Thought (New York: Cambridge University Press, 1995). Paul Craig Roberts, The Supply-Side Revolution: An Insider's Account of Policymaking in Washington (Cambridge: Harvard University Press, 1984), 5^13. Paul Krugman, Peddling Prosperity (New York: Norton, 1994), Chaps. 2^3. Mark H. Moore, ``What Sort of Ideas Become Public Ideas?'' in Robert Reich, editor, The Power of Public Ideas (Cambridge: Harvard University Press, 1988), 55^83; Robert M. Solow, ``How Economic Ideas Turn to Mush,'' in David Colander and A. M. Coats, editor, The Spread of Economic Ideas (New York: Cambridge University Press, 1989), 80. Otis L. Graham, Jr., Losing Time: The Industrial Policy Debate (Cambridge: Harvard University Press, 1992).

407 53. Heilbroner and Milberg, The Crisis of Vision in Modern Economic Thought, 100; David M. Ricci, The Transformation of American Politics: The New Washington and the Rise of Think Tanks (New Haven: Yale University Press, 1993), 179. 54. Roberts, The Supply-Side Revolution. 55. Jim Shoch, ``The Politics of the U.S. Industrial Policy Debate: 1981^1984,'' in David Kotz, Terrence McDonough, and Michael Reich, editors, Social Structures of Accumulation (New York: Cambridge University Press, 1994), 177^178. 56. George Gilder, Wealth and Poverty (New York: Basic Books, 1981). 57. Roberts, The Supply-Side Revolution, 27. 58. Graham, Losing Time, 166. 59. Heilbroner and Milberg, The Crisis of Vision in Modern Economic Thought, Chap. 3. 60. Michael Patrick Allen, `Èlite Social Movement Organizations and the State: The Rise of the Conservative Policy-Planning Network,'' Research in Politics and Society 4 (1994): 87^109; Ricci, The Transformation of American Politics: The New Washington and the Rise of Think Tanks, Chap. 7; James A. Smith, ``Think Tanks and the Politics of Ideas,'' in Colander and Coats, editors, The Spread of Economic Ideas, 189. 61. Theda Skocpol, Boomerang (New York: Norton, 1996). 62. Martha Derthick and Paul J. Quirk, The Politics of Deregulation (Washington, D.C.: The Brookings Institution, 1995). 63. Mauro Guillen, Models of Management (Chicago: University of Chicago Press, 1994), 7^20. 64. Fred Block, Postindustrial Possibilities: A Critique of Economic Discourse (Berkeley: University of California Press, 1990); Donald A. Scho«n and Martin Rein, Frame Re£ection: Toward the Resolution of Intractable Policy Controversies (New York: Basic Books, 1994). 65. Hall, ``Policy Paradigms, Social Learning, and the State''; Richard R. Lau, Richard A. Smith, and Susan T. Fiske, ``Political Beliefs, Policy Interpretations, and Political Persuasion,'' Journal of Politics 53/3 (1991): 644^675. 66. E. Ray Canterbery and Robert J. Burkhardt, ``What Do We Mean by Asking Whether Economics is a Science?'' in Alfred S. Eichner, editor, Why Economics is Not Yet a Science (New York: M. E. Sharpe, 1983), 15^40; Ricci, The Transformation of American Politics: The New Washington and the Rise of Think Tanks. 67. Goldstein, Ideas, Interests and American Trade Policy, 15. 68. Peter E. Earl, `À Behavioral Theory of Economists' Behavior,'' in Eichner, editor, Why Economics is Not Yet a Science, 100^101; Alfred S. Eichner, ``Why Economics is Not Yet a Science,'' in Echner, editor, Why Economics is Not Yet a Science, 234^ 235. 69. Krugman, Peddling Prosperity. 70. Heilbroner and Milberg, The Crisis of Vision in Modern Economic Thought, Chap. 5. 71. For comparisons of the assumptions of institutional and neoclassical economics, see Michael Best, The New Competition: Institutions of Industrial Restructuring (Harvard: Harvard University Press, 1990), Chap. 4; William Lazonick, Business Organization and the Myth of the Market Economy (New York: Cambridge University Press, 1991); Rodney Stevenson, `Ìnstitutional Economics and the Theory of Production,'' Journal of Economic Issues 21/4 (1987): 1471^1493. 72. Business Week, ``The Reindustrialization of America,'' Special issue, June 30, 1980; Lester Thurow, The Zero-Sum Society (New York: Basic Books, 1980). 73. Michael J. Piore, Beyond Individualism (Cambridge: Harvard University Press, 1995), Chap 3.

408 74. Shoch, ``The Politics of the U.S. Industrial Policy Debate: 1981^1984,'' 185. 75. John W. Kingdon, Agendas, Alternatives, and Public Policies (New York: Harper Collins, 1984), Chap. 7; Weir, Politics and Jobs, 169. 76. Seymour Martin Lipset, American Exceptionalism: A Double-Edged Sword (New York: Norton, 1996), Chaps 1^2; John H. Makin and Norman J. Ornstein, Debt and Taxes (Washington, D.C.: Random House, 1994); James D. Savage, Balanced Budgets and American Politics (Ithaca: Cornell University Press, 1988). 77. Benjamin I. Page and Robert Y. Shapiro, The Rational Public: Fifty Years of Trends in Americans' Policy Preferences (Chicago: University of Chicago Press, 1992), 160^163. 78. Ibid., 148^149. 79. Weir, Politics and Jobs, 158. 80. Savage, Balanced Budgets and American Politics, Chap. 7. 81. Page and Shapiro, The Rational Public, 265. The irony that the public was averse to de¢cits but willing to support a dramatic military build up that quickly increased de¢cits to historically unprecedented levels underscores the fact that public sentiments are often inconsistent. 82. Thomas Byrne Edsall, The New Politics of Inequality (New York: Norton, 1984), 65^66. 83. Makin and Ornstein, Debt and Taxes, Chap. 2. 84. Stephen M. Weatherford and Lorraine M. McDonnell, `Ìdeology and Economic Policy,'' in Larry Berman, editor, Looking Back on the Reagan Presidency (Baltimore: The Johns Hopkins University Press, 1990), 139^140. 85. Krugman, Peddling Prosperity. 86. Martin Rein and Christopher Winship, ``Policy Entrepreneurs and the Academic Establishment: Truth and Values in Social Controversies,'' in Elliot White, editor, Intelligence, Political Inequality and Public Policy (New York: Praeger, 1997), 17^48. 87. Kingdon, Agendas, Alternatives and Public Policies, 70. 88. Steven Brint, In an Age of Experts: The Changing Role of Professionals in Politics and Public Life (Princeton: Princeton University Press, 1994), 141; Lau et al., ``Political Beliefs, Policy Interpretations, and Political Persuasion,'' 670. 89. Eric A. Nordlinger, On the Autonomy of the Democratic State (Cambridge: Harvard University Press, 1981), 30. 90. Cathy J. Martin, Shifting the Burden: The Struggle over Growth and Corporate Taxation (Chicago: University of Chicago Press, 1991); Roberts, The Supply-Side Revolution; Sven Steinmo, Taxation and Democracy (New Haven: Yale University Press, 1992). 91. Mark Le¡, The Limits of Symbolic Reform: The New Deal and Taxation, 1933^1939 (New York: Cambridge University Press, 1984); Robert Stanley, Dimensions of Law in the Service of Order: Origins of the Federal Income Tax, 1861^1913 (New York: Oxford University Press, 1993). 92. Frank Ackerman, Reaganomics: Rhetoric vs. Reality (Boston: South End Press, 1982), Chap. 2. 93. Savage, Balanced Budgets and American Politics, 201^204. 94. Gilder,Wealth and Poverty, Chaps. 1^2. 95. Jamieson, Packaging the Presidency, 394. 96. Ricci, The Transformation of American Politics, 175. 97. Shoch, ``The Politics of the U.S. Industrial Policy Debate: 1981^1984,'' 108. 98. Gilder,Wealth and Poverty, 5, 22, 51. 99. Graham, Losing Time, 102. 100. Ibid., 42, 208.

409 101. 102. 103. 104. 105. 106. 107. 108. 109.

110.

111. 112. 113. 114. 115. 116.

117.

118. 119. 120. 121.

122. 123.

Ibid., 158. Ibid., Chap. 7. Jamieson, Packaging the Presidency, 416. Ibid., 397^398. Ricci, The Transformation of American Politics; Smith, ``Think Tanks and the Politics of Ideas.'' Page and Shapiro, The Rational Public, 149. Jamieson, Packaging the Presidency, 417^428. Meyer et al., ``World Society and the Nation State''; Meyer et al., `Òntology and Rationalization in the Western Cultural Account.'' Goldstein and Keohane, `Ìdeas and Foreign Policy: An Analytical Framework''; Hall, ``Conclusion: The Politics of Keynesian Ideas''; Thelen and Steinmo, ``Historical Institutionalism in Comparative Politics.'' Theda Skocpol, ``Cultural Idioms and Political Ideologies in the Revolutionary Reconstruction of State Power: A Rejoinder to Sewell,'' in Theda Skocpol, editor, Social Revolutions in the Modern World (New York: Cambridge University Press, 1994), 199^212; Charles Tilly, ``Repertoires of Contention in America and Britain, 1750^1830,'' in John D. McCarthy and Mayer Zald, editors, The Dynamics of Social Movements (Cambridge, Mass.: Winthrop Publishers, 1979), 126^155; see also Sidney Tarrow, Power in Movement (New York: Cambridge University Press, 1994), Chap. 7; William A. Gamson, Talking Politics (New York: Cambridge University Press, 1992). Steven Brint, ``Sociological Analysis of Political Culture: An Introduction and Assessment,'' Research on Democracy and Society 2 (1994); 3^41. Hirsch, ``Sociology without Social Structure: Neoinstitutional Theory Meets Brave New World.'' Kingdon, Agendas, Alternatives, and Public Policies. Brint, ``Sociological Analysis of Political Culture: An Introduction and Assessment.'' See also Kingdon, Agendas, Alternatives, and Public Policies, 131^139. Weber, ``The Social Psychology of the World Religions,'' 280; Max Weber, The Protestant Ethic and the Spirit of Capitalism (New York: Scribner's, 1958), 183; Robert Wuthnow, Communities of Discourse: Ideology and Social Structure in the Reformation, the Enlightenment, and European Socialism (Cambridge: Harvard University Press, 1989). G. William Domho¡, Who Rules America Now? A View for the '80s (Englewood Cli¡s, N.J.: Prentice-Hall, 1983), Chap. 4; Thomas Dye, Who's Running America? The Clinton Years (Englewood Cli¡s: Prentice-Hall, 1995), Chap. 9. Page and Shapiro, The Rational Public, 31^34. Donald McCloskey, The Rhetoric of Economics (Madison: University of Wisconsin Press, 1985); Rueschemeyer and Skocpol, ``Conclusion.'' Dobbin, Forging Industrial Policy. Murray Edelman, The Symbolic Uses of Politics (Urbana: University of Illinois Press, 1964); Erving Go¡man, The Presentation of Self in Everyday Life (Garden City, N.Y.: Doubleday Anchor, 1959), Chap. 3; Timur Kuran, Private Truths, Public Lies (Cambridge: Harvard University Press, 1995); James C. Scott, Domination and the Arts of Resistance: Hidden Transcripts (New Haven: Yale University Press, 1990). Arthur Stinchcombe, Constructing Social Theories (New York: Harcourt, Brace and World, 1968), 24^28. John Maynard Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1936), 383.

Embeddedness, Path Dependency and Social Institutions An Economic Sociology Approach CS

Simone Ghezzi and Enzo Mingione Università degli Studi di Milano-Bicocca

abstract: This paper argues for a theoretical approach based on embeddedness which assumes that the economic actor is not an atomized and utilitarian individual, but is in fact positioned within specific historical and institutional contexts in various social networks. This approach is based on Polanyi’s critically debated contribution which allows for an empirical study of the diversity of institutional structures and of the significance of configurations of insertion within different social networks. Such diversity results from the double movement of disembeddedness and re-embeddedness caused by the spread of constantly emerging market opportunities, and by the importance held by the historically and culturally different selective processes of path dependency in the construction of the institutions of social regulation and of the socialized preferences of economic actors. Within these processes attention is given to the transformation of social systems based on reciprocity (household, kin, social capital networks, etc.), associations of shared interests, forms of economic organization (in a plurality of coexisting ‘economies’), unequal distribution of power, and political intervention. keywords: culture ✦ embeddedness ✦ entrepreneurship ✦ kin network ✦ market ✦ path dependency ✦ reciprocity ✦ social institutions

Introduction Embeddedness expresses the notion that social actors can be understood and interpreted only within relational, institutional and cultural contexts and cannot be seen as atomized decision-makers maximizing their own utilities. Embeddedness approaches prioritize the different conditions within which social action takes place. They challenge the utilitarian, ‘undersocialized’, neoclassical position, according to which behaviour is viewed as transcending the social, and the functional ‘over-socialized’ position, Current Sociology ✦ January 2007 ✦ Vol. 55(1): 11–23 © International Sociological Association SAGE (London, Thousand Oaks, CA and New Delhi) DOI: 10.1177/0011392107070131

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where social conditions exist a priori to behaviours, and norms and values are deeply internalized. The concept of embeddedness is based on several assumptions about society: the actor is not an atomized individual; immediate utility cannot explain the full meaning of social relations; logics underlying the formation of institutions and their norms of behaviour cannot be removed from the contexts of social interaction within which these institutions exist. We put forward an additional assumption relevant to our present discussion: contemporary societies are experiencing convergent trends of transformation resulting in diverse processes of adaptation that evolve from specific social, cultural and cognitive configurations. These assumptions are well described ethnographically in the anthropological literature, and are also present in Weberian approaches (methodological individualism) where they become criteria for the ideal type reconstruction of the meaning of individual action. We can also see them in structural approaches concerned with the dynamics of logics governing social behaviour. The concept of embeddedness that followed from the work of Polanyi (1944, 1957) was revisited and reworked by Mark Granovetter (1985) and has ever since been at the centre of the theoretical and methodological debates within the so-called ‘new economic sociology’ (Swedberg, 1997, 2003). At the core of this approach, a number of important contributions illustrate the importance of social networks, social capital, the diversity of cultural and cognitive elements and the social construction of markets (Burt, 1992; Nee and Ingram, 1998; Zelizer, 1988, 1994). Embeddedness-based approaches encounter analytical difficulties in their passage from a micro- to a macro-level examination. Unlike utilitarian and under-socialized frameworks of analysis, this kind of analysis is not fully formalized because it assumes that differences in time and space are embodied in the interpretations of social behaviours. Unlike oversocialized explanations, this approach does not codify conditions of social insertion by applying a priori modalities (i.e. internalized prescripted behaviour) to atomized actors who seemingly transcend social relations. Such relations must be better understood as being tied in some way to historical, spatial and cultural elements, which also need to be explained and understood. As we see later, within embeddedness approaches it becomes essential to fix the link that explains the process through which networks and systems of social relations turn into institutions and macro-social regulations of behaviour. As Nee and Ingram (1998: 20) argue in relation to the Granovetter version of embeddedness, . . . without incorporating institutional effects, this network-embeddedness perspective is limited in its explanatory power. . . . A firmer basis for intellectual

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Ghezzi and Mingione Embeddedness, Path Dependency trade between economics and sociology results from understanding how institutions and network ties are linked. Specifying the social mechanisms through which institutions affect behaviour provides the missing link, integrating a choice-within-institutional-constraints approach with the networkembeddedness perspective.

The subject of the following discussion is to explore the notion of embeddedness from a theoretical perspective with a brief analysis of the contributions made by forerunners, such as Durkheim and Weber, and subsequently the contribution of Polanyi, to conclude with an illustrative application of the concept of embeddedness. There is an attempt to combine the methodological rigour of Granovetter’s approach – especially his critique of atomized actors in the over-socialized versions – with Polanyi’s contribution in order to single out the sociohistorical processes that allow us to shift from the various forms of embeddedness to the configuration of institutions regulating social and economic behaviour. In this sense, we reconsider the concept of path dependency, as a tool to identify the persistence of diversity and innovation inside the processes of social change. More to the point: why despite pressures to converge do important differences persist? The persistence, the resilience, the continuity, the survival, or whatever we may call it, of certain regional or local characteristics is a much neglected aspect in sociology. Explanatory difficulties arise also when such persistence induces changes (i.e. innovative or adaptive) that diverge from an alleged process of convergence. We argue that the persistence of diversity cannot simply be dismissed as a residual epiphenomenon relegated to generic and reified terms such as ‘tradition’ or ‘culture’. This is the reason why we advocate path dependency to complement the network analysis typical of the studies of embeddedness inspired by the approaches à la Granovetter, while at the same time recuperating Polanyian fundamental categories. We are aware that this article is only a brief contribution to positioning the concept of embeddedness within a broader empirical perspective. It is apparent that this sketchy exposition requires additional work in order to improve its theoretical depth and cohesiveness. Ultimately, this can also be reached in practice through the implementation of the method we advocate for empirical research. In this respect, the work by Tilly and Scott mentioned towards the end of this article serves to explain this theoretical approach.

Durkheim’s Contribution: Social Ties, Institutions, Socialization Even though it was Polanyi who introduced the term ‘embeddedness’, tools for analysing the contextual diversity of social action were already 13


present in classic works, especially those of Durkheim and Weber. The former theorizes the relevance of social ties and socialization processes; the latter brings into relief the tensions characterizing the processes of rationalization. Both conceive of the actor not as a utilitarian and atomized homo oeconomicus, but as a subject inserted in diversified networks and institutional contexts, the very subject matter of sociological analysis. For Durkheim, the advent of modern industrial society is accompanied by a profound transformation in the ties that characterize social life. The increasing and more complex division of labour, industrialization and urbanization progressively weakens ties of mechanic solidarity that regulate cooperation in the small and stable communities typical of the preindustrial era. Yet, Durkheim opposes the idea that ties in modern society are the inevitable outcome of fragmented and diversified selfinterests. The mechanic interplay of interests would lead to conflict and anomie, to the break-up of society, and to the loss of opportunities for cooperation – ‘every harmony of interests conceals a latent conflict, or one that is simply deferred’ (Durkheim, 1984: 152). Organic solidarity is therefore a relation of cooperation socially built upon an institutional process regulated by norms and rules within which the modern nationstate and labour organizations play a key role. In Durkheim the critique to the idea of homo oeconomicus stems precisely from the belief that selfinterest is always negotiated and subordinated to society as a whole. This perspective may lead to an over-socialized position, but at the same time it may provide insights into the way in which social ties generate the institutional regulation of behaviours characteristic of different situations of embeddedness. Durkheim’s contribution, to view socialization processes as a matrix of the different conditions of embeddedness, stems from this latter direction. Rules regulating social interaction are transmitted through learning, which takes place in situations of persistent diversity and ongoing change. Such situations determine not only new economic and technological opportunities, and consequently new regulative necessities, but also make possible different levels of individual freedom for next generation cohorts. This issue is also dealt with in the concluding section on path dependency and embeddedness.

Max Weber: The Process of Rationalization as a Matrix of Diversity For Weber the interpretation of modern society relies on two linchpins: the notion of methodological individualism based on the motives of individual action; and the idea that modernity is characterized by complex processes of rationalization, which points to the increasing importance of rational action. Weber does not assume that social action is performed by 14

Ghezzi and Mingione Embeddedness, Path Dependency

atomized individuals maximizing utility, but rather by persons influenced by their social networks, specific habits and traditions, by shared values and culture. The diversity of social contexts produces substantial variations in ‘the interest of the actors as themselves are aware of them’ (Weber, 1978: 30). It is from this concern with diversity that Weber’s contribution to the notion of embeddedness can be drawn. Weber singled out two different forms of social interaction affecting social behaviour in different ways: one form comes into being when two or more actors are related by a shared sense of membership to a delimited social group (the community); the second arises when actors share common interests (the association). Rationalization does not entail the extinction of community ties (Vergemeinschaftung), but it sets off an ongoing transformation of these same ties, which inevitably causes tensions with associative relations (Vergesellschaftung). In particular, the pervasiveness of instrumental rationality is at odds with traditional habits. Change, therefore, does not lead to a uniform process of utilitarian individualism, but is the effect of variable forms of adaptation. Such forms constitute the main basis upon which the notion of embeddedness can be closely examined. Weber’s second major contribution regards the tensions present within rationalization processes, particularly between formal rationality and substantive rationality. The former pertains to market exchange and immediate utility, the latter may be seen as the foundation of redistributive logics. While rational behaviour emerges from the tense interplay of these two forms of rationality, values determine the need for institutional regulation, the priority of the public good over the individual’s immediate benefit. ‘Formal and substantive rationality, no matter by what standard the latter is measured, are always in principle separate things, no matter that in many (and under certain very artificial assumptions even in all) cases they may coincide empirically’ (Weber, 1978: 108). Here Weber indicates an important tool to empirically analyse the diversity present in the processes of social construction of regulative institutions. The Protestant Ethic and the Spirit of Capitalism (Weber, 1958) may be read as a pioneering work on sociocultural embeddedness. Weber notes how typical capitalist behaviour – profit-orientation and emphasis on the importance of professional beruf – can only develop and extend in favourable cultural contexts fashioned by the Protestant ethic. Therefore he reaffirms the idea that homo oeconomicus is not an atomized individual removed from his/her own cultural context, but rather that different sociocultural configurations – familial, ethnic, local and religious conditions in which any individual is socialized – keep a decisive influence on orienting his/her social behaviour. 15


Polanyi: The Process of Disembeddedness and Re-Embeddedness Polanyi argues that the diffusion of market-based relations is a socially disruptive process. The notion of embeddedness may thus be used to understand the logics underlying the formation and transformation of social institutions in contexts of market exchange. In market-based relations immediate self-interest prevails over other relationships, causing diversified processes of disembeddedness – as economic relations bring about social disruption – and concomitant processes of re-embeddedness (i.e. new forms of regulation). Polanyi shows how these concomitant and ongoing processes occurred historically and cross-culturally, describing them as a ‘double-movement’. His historical approach in The Great Transformation (Polanyi, 1944) denounces the disruptive effects of laissez-faire and emphasizes how serious tensions run through modern society. Countermeasures – i.e. new regulative institutions – are established to keep at bay the negative impact of the diffusion of market relations. In particular, the need for new regulative principles arose as the ‘fictitious commodities’ – labour, land and money – were entirely subject to the rules of self-regulating markets. The commodification of these elements that are not, strictly speaking, commodities, is incompatible with social life and yet ‘essential to a market economy’ (Polanyi, 1944: 73). It follows that capitalist societies, built upon commodification processes, are characterized by a double movement of disembeddedness and re-embeddedness (the necessity to produce new social regulation in the markets of fictitious commodities). The Great Transformation does not contain a theoretical and methodological model with which to carry out sociological analysis on the various manifestations of embeddedness. In ‘Economy as an Instituted Process’ (Polanyi, 1957: 243–69), however, Polanyi does outline a procedure employing the conceptual tools of anthropology, which is subsequently used to develop a sociological theory of embeddedness. Polanyi identifies three types of exchange relations: reciprocity, redistribution and market exchange. Reciprocal and redistributive exchanges are meaningful only in as much as they are conceived of as part of the social order. They express two diverse logics of social organization comprised of specific meanings and contents in different cultural and historical settings. The logic of reciprocity is built upon the collective interests of small groups with strong and close ties – defined as community relationships in sociological terms. In this form of exchange, rules favouring the reproduction of the social group prevail over the immediate selfinterest of the individual. By contrast, the logic of redistribution stems from membership in a wider community and its internal power relations. 16


In this setting of stable, hierarchically organized and politically legitimated social relations resources are extracted from some individuals to benefit others. At an abstract level, market exchange is not compatible with society – the efficiency of competitive behaviour occurs among atomized actors who are not enmeshed in social relations – and therefore appears to be guided by a universal logic devoid of social substance. Reciprocity and redistribution are viewed as embedded, while the market is disembedded. The problem of embeddedness in modern society is to explain how it is possible to reconcile a growing number of market-based interactions with social order. If at the abstract level it is possible to hypothesize an interactive phenomenon that exists outside any form of social organization, in reality systematic market exchanges cannot take place outside a favourable social context (Barber, 1995; Mingione, 1991). According to Polanyi the three different logics of exchange – present always in different combinations – provide society with needed institutions, and therefore with the various configurations of embeddedness. The disembeddedment resulting from increasing individualism constitutes the driving force in ongoing transformations affecting all social institutions, those founded on reciprocity (i.e. household, kinship), those based on redistributive principles (such as the expansion of welfare programmes) and those which make the markets of fictitious commodities more compatible with society (such as the legal and contractual organization of firms, labour markets, land and housing transactions, financial and monetary control). The outcomes of this process vary according to the dynamic interaction at work in different historical, cultural and cognitive contexts. The notion of tensions singled out by Weber and Polanyi makes it more difficult to implement interpretive parameters, yet social scientists should not retreat from such a challenge. The construction of institutions governing modern societies is understood as a contextual double movement – much more difficult to construe in terms of utility and immediate functionality. The disruption of sociality caused by growing individualism and the concomitant reconstruction of social ties to limit individualism themselves explain the chronically unstable equilibrium of modern society.

The Social Construction of Differences: Innovation and Path Dependency The approaches based on embeddedness show how it is possible to interpret market-based societies without employing the reductive and a-social 17


parameter of utilitarianism. It is true that utilitarian logics provide the easiest access to the atomized dimension of the individual – but these are socially meaningless because utilitarian behaviour cannot occur without the concurrent presence of institutions, norms and culture in society. Polanyi’s critique of the self-regulating market, and Weber’s idea of permanent tensions between formal rationality and tradition, and between formal and substantive rationality, stress this precisely. We use the following example of labour regulation to clarify embeddedness approaches. In contemporary societies the market sets wages based on the competitive relation between the supply of the workforce and the demand of the employers within a logic of labour productivity. However, linking wages to productivity presents insurmountable difficulties when considering workers’ social life. Their needs change because their life cycle and material condition change as well. For example, a working couple with small children inevitably go through a concomitant decrease in productivity and an increase in social needs. Resorting to market self-regulation is not an effective solution: if the employer were to provide parental leave as well as a wage increase to the new parents, the company’s competitiveness would be compromised and its future threatened. In Polanyi’s terms, this is the disembeddedness side of the question. As a response (the re-embeddedness part of the process of modernization) to this problem, changes have occurred within the household through the devising of new strategies of adaptation; in addition, new forms of social protection have been introduced, such as the state regulation of parental leave and childcare services. The market, constrained by in its own logic of competitiveness, cannot solve the labour disputes that are generated within it. Such disputes are being dealt with by the arrangement of adapting mechanisms, based on cooperative logics among which we may single out reciprocity (family, kinship, community care strategies) and redistribution (welfare state programmes of child care and parental leave regulations). The market enters the process of re-embeddedness by mobilizing logics that allow for the stability of cooperation (consider the establishment of daycare provided by firms, particularly by high productivity firms interested in investing resources in order to attract and maintain highly selected female workers). The process of adaptation varies across societies, even though they undergo similar pressures and economic trends. One of the steps suggested here to highlight the different conditions of embeddedness is path dependency analysis, that is, a historically selective process within which some embedded conditions are transformed into specific institutional configurations of development. Returning to the previous childcare example, along different historical routes some social contexts develop a greater number of universal public 18


services, whereas others give more importance to the private sector, and others more often resort to family care and to social network solidarity – as Esping-Andersen (1990) shows in his analysis of the different worlds of welfare capitalism. Cultural and social diversity may be a source of social action or its very limitation. Adaptation continues to modify the various starting conditions through paths where choices and opportunities are given neither by individual utility nor by predetermined social institutions. Path dependency suggests the historicized dimension of social analysis. The translation of such a historical dimension into research procedures is quite complex, yet essential. If the actor is not viewed as an atomized individual, he/she must therefore be located in different social, cultural and cognitive contexts, which are the outcome of diversified historical processes of change, innovation and adaptation. It is through the empirical analysis of path dependency processes that we can understand the macro and comparative meaning of different forms of embeddedness in different models of industrial development without resorting to oversocialized views. In conclusion, we would like to return to the example of work regulation in order to identify a few of the possible interpretations that allow us to take into account the interplay of different conditions of embeddedness within processes of change. This is a partial and preliminary undertaking to be developed by future contributions. Tilly and Scott’s (1987) comparative analysis on the conditions of women in 19th-century England and France documents two different social models of response to the development of wage labour. In the first model, proletarianization is more accentuated and radical (the English model) as the nuclear working-class family can no longer rely on a peasant subsistence economy. In the second model (a model which applies not only to France but also to all the countries of continental Europe), the difficulties of reconciling wage labour with procreation and childcare, especially in the first phase of industrialization, set in motion forms of solidarity between working-class families and kin relations. These family ties served as a source assistance with childcare allowing working-class mothers to keep their full-time factory jobs. In the English model, ties of social solidarity within kin networks were weakened and this fact steadily influenced the configuration of social networks resulting in impoverished social relations across generations. In the second model (as in all late forms of industrialization, as experienced by worker-peasants or ethnic entrepreneurs or small entrepreneurs within industrial districts), these ties were transformed and reinforced because they were at the heart of the process of re-embeddedness. This phenomenon has left as its legacy an unforeseen feature of modernity well documented by continental social historians, namely a strengthening of cooperative 19


relations within kin networks, that are able to receive (and give) support and care in critical times of the family life cycle. In northern Italy, these cooperative kin networks also became the social milieu out of which small entrepreneurship developed, because entrepreneurs could draw upon these kin ties to set up and run their firms (Ghezzi, 2003). In terms of path dependency, we can also reflect on the fact that in France this ‘solution’ turned out to be more effective due to an earlier development of birth control, which curtailed peasant out-migration. Even now this configuration helps explain some of the distinctive features of the French welfare system designed to favour a high birth rate, working mothers and childcare, even at the preschool level. In the countries of southern Europe, where industrialization was experienced at a later time, the path dependency of industrial adaptation of kin and communitarian networks was longer. This feature was also due to the ongoing presence of family-run firms, the influence of Catholic familistic culture, and a combination of economic difficulties which set into motion processes of defamilization. Even today, people rely on extended family solidarity. Young adults may continue to live with their parents and be supported and aided financially by them when they set up their own households. Grandparents and in-laws may also provide a significant source of assistance, especially in terms of childcare when it becomes difficult to reconcile work and family time. Within this interpretative framework the diverse forms of re-embeddedness and path dependency become empirically manageable and are able to explain the different orientation of social and economic actors. In fact, the institutional configuration of family organization continues to be an important dimension of all contexts of industrial societies (in contrast with utilitarian assumptions). Moreover, this configuration is continuously diversified (in contrast with functional Parsonian assumptions of a homogeneous nuclearization of the family structure). In general, as Beckert (1996) noted, embeddedness-based approaches address the key issue posed by the spread of competitive market behaviour, namely uncertainty (instability and insecurity). The forms of re-embeddedness are present in different configurations where different institutional logics are intertwined, yet all geared towards stability and the certainty of social cooperation, reciprocity, redistribution and market exchange. Path dependency analysis reveals both the bearing of different starting configurations and the impact through time of diverse political-economic and social decisions.

Concluding Discussion Two key areas of study seem to benefit from the theoretical framework of analysis we have tried to outline without attempting to conduct an analysis 20


of a concrete historical development. The first is linked to the understanding of the processes of re-embeddedness – always differentiated, especially at the local level. In the current situation of high uncertainty caused by extreme competition, we can experience a sense of increasing instability in general, heterogeneity of jobs and novel organizations of firms, as well as new household arrangements and diversified life histories. All these conditions have been undermining the effectiveness and legitimacy of the national regulation of welfare states that had been created in the Fordist period. The second area refers to an alleged socioeconomic convergence in Europe, one that takes as its points of departure highly differentiated contexts. Our theoretical framework wants to demonstrate that this trend is only partially occurring and that these differences continue to exist and play an important role. It is in such a manner that embeddedness approaches in economic sociology have an edge over other theoretical perspectives. They take into account and stress that societies are differentiated and increasingly less standardized; yet, this point does not constitute a shortcut to an interpretative route that remains complex and not very formalized. Path dependency aims at reassessing the historicized dimension of social analysis that was already present in the work of Polanyi and Weber, and that is inclined to disappear in the micro-analyses à la Granovetter. The empirical research of the historical dimension is unquestionably complex from a sociological point of view, yet it constitutes an essential and inevitable footstep for the improvement of embeddedness-based approaches. The actor, far from being atomized, must be inescapably viewed as enmeshed in different social, cultural and cognitive contexts; otherwise – as John Davis has put it – ‘without structure and without social relations, events are essentially arbitrary’ (Davis, 1992: 16). These manifold contexts are the product of historical processes of change, innovation and adaptation, which are to be explored as well both from a micro- and macro-analytical point of view.

Note This article is the product of a joint effort on the part of the authors, therefore responsibility for its content is equally shared. We would like to thank the two anonymous reviewers for their useful comments.

References Barber, Bernan (1995) ‘All Economies “Are” Embedded: The Career of a Concept, and Beyond’, Social Research 62(2): 1–11.

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Current Sociology Vol. 55 No. 1 Beckert, Jens (1996) ‘What is Sociological about Economic Sociology? Uncertainity and the Embeddedness of Economic Action’, Theory and Society 25: 803–40. Burt, Ronald (1992) Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press. Davis, John (1992) ‘History and the People Without Europe’, in K. Hastrup (ed.) Other Histories (European Association of Social Anthropologists), pp. 14–28. London: Routledge. Durkheim, E. (1984) The Division of Labour in Society. London: Macmillan. (Orig. pub. 1893.) Esping-Andersen, Gøsta (1990) The Three Worlds of Western Capitalism. Cambridge: Polity Press. Ghezzi, S. (2003) ‘Local Discourse and Global Competition: Production Experiences in Family Workshops of the Brianza’, International Journal of Urban and Regional Research 27(4): 781–92. Granovetter, Mark (1985) ‘Economic Action and Social Structure: The Problem of Embeddedness’, American Journal of Sociology 91: 481–510. Mingione, Enzo (1991) Fragmented Societies: A Sociology of Economic Life Beyond the Paradigm of the Market. Oxford: Blackwell. Nee, Victor and Ingram, Paul (1998) ‘Embeddedness and Beyond: Institutions, Exchange, and Social Structure’, in Robert K. Merton, Mary C. Brinton and Victor Nee (eds) The New Institutionalism in Sociology, pp. 19–45. New York: Russell Sage Foundation. Polanyi, Karl (1944) The Great Transformation. Boston, MA: Beacon. Polanyi, Karl (1957) ‘The Economy as Instituted Process’, in Karl Polanyi, Conrad M. Arensberg and Harry W. Pearson (eds) Trade and Markets in the Early Empires, pp. 243–69. Chicago, IL: Regnery. Swedberg, Richard (1997) ‘New Economic Sociology: What Has Been Accomplished, What is Ahead?’, Acta Sociologica 40: 161–82. Swedberg, Richard (2003) Principles of Economic Sociology. Princeton, NJ: Princeton University Press. Tilly, L. A. and Scott, J. W. (1987) Women, Work, and Family. London: Academic Press. Weber, Max (1958) The Protestant Ethic and the Spirit of Capitalism. New York: Scribner’s. (Orig. pub. 1904–1905.) Weber, Max (1978) Economy and Society: An Outline of Interpretive Sociology, 2 vols. Berkeley: University of California Press. (Orig. pub. 1922.) Zelizer, Viviana (1988) ‘Beyond the Polemics of the Market: Establishing a Theoretical and Empirical Agenda’, Sociological Forum 4: 614–34. Zelizer, Viviana (1994) The Social Meaning of Money. New York: Basic Books.

Biographical Note: Simone Ghezzi is lecturer in anthropology at the Università di Milano-Bicocca, Dipartimento di Sociologia e Ricerca Sociale. His research interests include informal economy, family enterprises and urban poverty. Among his most recent publications is: ‘The Fallacy of the Formal and Informal Divide. Lessons from a Post-Fordist Regional Economy’, in Enrico A. Marcelli and Colin C. Williams (eds) Informal Work in Developed Nations (University of Michigan Press, forthcoming).

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Ghezzi and Mingione Embeddedness, Path Dependency Address: Via Degli Alpini 13, 20048 – Carate Brianza, MI, Italy [email: simone. [email protected]]

Biographical Note: Enzo Mingione is Dean of the Faculty of Sociology and Professor of Sociology at the University of Milano-Bicocca. He is currently coordinator of the EU Research Training Network URBEUROPE (Urban Europe between Identity and Change) and coordinator of the European Doctorate URBEUR – ‘Urban and Local European Studies’. His main fields of interest include social exclusion, informal sector, unemployment, economic and urban sociology. Among his books (in English) are: Fragmented Societies (Oxford: Blackwell, 1991); and as editor, Urban Poverty and the Underclass (Oxford: (Blackwell, 1996). Address: Fondazione Bignaschi, Via Olmetto 3, 20123 Milano, Italy. [email: [email protected]]

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GLOBAL SOCIAL GOVERNANCE

I GLOBAL SOCIAL GOVERNANCE REFORM: From Institutions and Policies to Networks, Projects and Partnerships Bob Deacon

Professor of International Social Policy Director of Globalism and Social Policy Programme (GASPP) University of Sheffield and STAKES

1. Summary and overview This chapter addresses the prospects for improved social governance at the global level. It begins with an examination of the concept of globalisation and how globalisation has both affected the making of national social policy and introduced an era of global social policy making even though the institutional capacity to make global social policy is far from adequate. It then turns to some of the Global Social Governance reform issues that have arisen in this new era. It continues with a review of the Global Governance Reform Players, and notes the Forums where debate about these issues take place. It then sets out some ambitious approaches to Global Institutional Reform and assesses the institutional and political obstacles to such a major reform. The chapter continues by describing a modest set of feasible Global Social Governance Reforms. It concludes, however, by focusing not on the reform of institutions or policies but on new international policy action and implementation processes that seem to be enabling international stakeholders to by-pass ossified institutional structures and the current impasse in policy debates. This is followed by suggestions and recommendations as to how Finland and other like-minded developed Northern countries might best advance global social governance reform in the direction of a rules-based and equitable world order in the light of this analysis. The message of the chapter is that, while there are on the international policy agenda a number of worthy and desirable institutional reforms that should be implemented at the global level and while the struggle to shift global policy from its neo-liberal character to something more socially responsible continues, the actual focus of much international effort to improve the world’s management of global social issues is centred upon networks, partnerships and projects. The question for

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Finland and like-minded countries is how it positions itself in relation to these activities. The brief concludes with three principles that might enable Finland and like-minded countries to have the influence they would wish both at the traditional levels of institutional reform and policy change and enable them to engage with emerging networks, partnerships and projects. If policy-making has shifted to this new network arena, then global political alliances need to be fashioned to enable these networks also to be guided by principles rather than pragmatism. These principles entail:

1. Forging alliances with global Southern country partners and groups within which Southern voices are heard. 2. Supporting approaches to world regionalism within which the social dimension of trading arrangements is given due attention. 3. Working always to achieve a more equitable access to services and provision. 4. Establishing within-country policy synergy towards global questions across all Ministries. 2.

Globalisation, global social policy, global governance

2.1 Globalisation

There is no globally accepted definition of globalisation and, in practice, the term has been applied to a wide range of unrelated phenomena. Due to irreconcilable definitions many globalisation debates are stalemated from the outset… (globalisation has been defined as)… internationalism, liberalisation, universalisation, modernisation/ westernisation, deterritorialisation. (Scholte 2000)

What consensus there is among social scientists suggests that globalisation means a shrinking of time and space; an ever closer connection between economic and social actors and events in different parts of the world. Globalisation may be thought of initially as a widening, deepening and speeding up of world-wide interconnectedness in all aspects of contemporary life. (Held and McGrew 1999) (Globalisation involves)… tendencies to a world-wide reach, impact, or connectedness of social phenomena or to a world-encompassing awareness among social actors… (Therborn 2000)


Informational and communation technologies are usually placed at the heart of this process of time and space shrinkage (Castells, 1996). There is also wide agreement that there are various dimensions to globalisation: economic, political, social, cultural and environmental. Although there is nothing in the above definitions to suggest that globalisation is inherently bad or harmful, its effects are hotly disputed, particularly with regard to their impact on welfare systems (Mishra 1999). Perspectives on the benefits or otherwise of globalisation range from the ‘hyperglobalisers’ celebrating the domination and power for good of the globalised economy and free markets and their associated institutions of global financial governance; to the ‘sceptics’, who argue that the case is overstated and that the world is only globally interconnected in financial terms; and to the ‘transformationalists’, who see globalisation as a long-term historical process with which governments and people are faced, the nature of which is contested (Held et al 1999). The related dispute within political science is between The cosmopolitan democracy views of Held (1999), Falk (1999) and others, who argue the world is moving towards a new situation within which supra-national forms of accountable global governance are being constructed, and realists who argue that national political power and associated international agreements will continue for the foreseeable future. The complex multilateralists compromise position of O’Brien et al (2000) suggests that global social movements do already influence International Organisations and bypass the national policy making process but national policies are also important. Of course, the political debate about globalisation is not just about whether it is happening or not and the extent to which it is transforming the way the world is governed: it is also about the form that globalisation is taking. It is the neo-liberal form of recent globalisation that is often at stake in the globalisation and antiglobalisation debates. Some would be happy to support a globalisation with rules and attention to global social needs. Held and McGrew (2002) usefully summarise the range of political positions to be found on globalisation which reflect the debate on whether globalisation is really changing things or not and also the form that it is and should be taking. They elaborate a six-fold typology of political positions regarding globalisation. Three are for globalisation as it is. Neo-liberals celebrate the deregulated global market. Liberal internationalists continue in the tradition of the founders of the UN and see the world as still essentially made up of intergovernmental processes. Institutional reformers make the case for reforming the creaking system of the UN and Bretton Woods. Three positions want to radically mend or abolish globalisation. The global transformers seek to fashion a global world with international social justice and international regulations. On the other hand, Statist/Protectionists believe both that states still matter and want to use them to conserve their country’s economic and

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social achievements against the cold winds of neo-liberal globalisation. Finally, Radicals (which includes both the localists who favour deglobalisation and a nurturing of local resources and the Marxists who may be either for the abolishment of global capitalism but may also be global transformers if they are Marxist social democrats) wish a more fundamental break with capitalist globalisation. They argue that cosmopolitan social democrats can be found occupying the Liberal Internationalist, the Institutional Reforming and the Global Transformer positions. This chapter and the recommendations that flow from it may be regarded as sitting, perhaps uncomfortably, between the Institutional Reforming and the Global Transformation positions. 2.2 Global social policy

Globalisation has affected the way social policy is to be understood and analysed. I have argued elsewhere (Deacon 2000) that globalisation: • Sets welfare states in competition with each other. This raises the spectre, but not the certainty, of a race to the welfare bottom. It raises the question as to what type of social policy best suits competitiveness without undermining social solidarity. • Brings new players into the making of Social Policy. International organisations such as the IMF,

World Bank, WTO and UN agencies such as WHO and ILO have become involved in prescribing country policy. Also relevant are regional organisations such as MERCOSUR, ASEAN and SADC. International NGOs have substituted for government in this context.

• Generates a global discourse about best social policy. Because supranational actors have become

involved, the traditional within-country politics of welfare have taken on a global dimension with a struggle of ideas being waged within and between International Organisations as to desirable social policy. The battle for pension policy in post-communist countries between the World Bank and the ILO was a classic example. (Deacon 1997)

• Creates a global private market in social provision. Increased free trade has created the possibility

of mainly USA and European private health care and hospital providers, education providers, social care agencies and social insurance companies benefiting from an international middleclass market in private social provision.

At the same time, globalisation ushers in an era where social policy issues have themselves become globalised. Social policy is, in essence, interventions by governments and other agencies altering the distributive outcomes of market activities. Social policy historically has been about interventions of a socially redistributive kind (from rich to poor, young to old), of a social regulatory kind (setting the social ground rules of a market economy) and of a social rights kind (delimiting the rights and duties of citizens with regard to access to services and incomes). Increased global interconnectedness has globalised


these policy issues. Redistribution across borders, social regulations across borders and entitlement to social rights regardless of borders are the global social policy questions needing to be addressed. To put this another way, globalisation is rendering this territorial basis of citizenship obsolete. Identities are increasingly cross border and solidarities arise as much within confessional groupings and ethnicities as within secular states. This raises the issue of international citizenship rights, entitlements and duties. The field of global social policy may therefore be defined as embracing issues of global redistribution, global regulation and global social rights as shaped by intergovernmental and non-governmental organisations, agencies and groups. The definition also embraces the ways in which such trans-national agencies seek to influence national policy. The governance of global social policy concerns, therefore, the way in which the UN and Bretton Woods institutions and other supranational actors are fashioning both a global social policy in the fields of social protection, education, health and habitat and are influencing national social policies in these fields. 2.3 Global social governance

Whereas within single countries, and even within the most advanced regional grouping of countries (the EU), there are established governance mechanisms and institutions for the formulation and execution of national and regional social policy, this is not the case for the world as a whole. The United Nations system was conceived in an era of inter-nationalisation (not globalisation) and is designed primarily to facilitate countryto-country co-operation. Alongside that have emerged the Bretton Woods organisations that are formally part of the UN system but actually, more often than not, in competition with it. In addition, there are a bewildering array of international civil society actors seeking to influence global policy. At the same time other exclusive groups of countries such as the G7/8 assume authority to make major global social policy initiatives such as forging agreement with international companies to reduce the price of drugs for poor countries. This chapter and this volume seeks to shed some light on this patchwork of agencies, networks and institutions and the complex ways in which they influence aspects of international social policy. In that sense, the chapter and volume takes the complex multilateralist framework as its analytical starting point. Governments still play a major part, but so do trans-border civil society actors interacting with trans-border corporations and international organisations. This work does not undertake a systematic review of all the component parts of this complex whole. We do not, for example, critically review the governance mechanism of the ILO or World Bank in any detail. What we are trying to capture is something of the ways in which, in the spaces within and between these overlapping and competing agencies, something that passes for a

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global governance mechanism, initiating and implementing something that passes for a global social policy, is emerging. At the same time we are arguing that this governance space and this policy is contested. Crucially we are trying to suggest ways in which primarily Northern reform minded governments might intervene in this contested terrain to nudge the world towards a more rules-based international social policy that has equity within and between countries as one of its goals.

3. Global social governance reform issues As was suggested above, what passes for a system of global governance in the social sphere is a complex of overlapping and competing agencies all seeking to influence policy. There are four areas upon which reform of this global governance ‘system’ centres: A. Institutional fragmentation and competition at the global level. B. The definition of and financing of global public goods. C. The extent of and mechanisms of global social regulation. D. The definitions and enforcement of global social rights. 3.1 Institutional fragmentation and competition

At the global level, there are a number of competing and overlapping institutions and groupings of countries, all of which have some stake in shaping global social policy towards global social problems. This struggle for the right to shape policy and for the content of that policy is what passes for an effective system of international social governance. The fragmentation and competition may be analysed as being made up of five groupings of contestations. First, the World Bank, IMF and WTO are in competition for influence with the rest of the UN system. The Bank’s health, social protection and education policy for countries is, for example, not the same as that of the WHO, ILO or UNESCO respectively. While the world may be said to have one emerging Ministry of Finance (with lots of shortcoming), it has two Ministries of Health, two Ministries of Social Security and two Ministries of Education. Then again, the UN social agencies (WHO, ILO and UNICEF) do not always espouse the same policy as the UN Department of Economic and Social affairs while the UN SecretaryGeneral’s initiatives such as the Global Compact or the Millennium Project may bypass and sideline the social development policies of the UN’s Department of Economic and Social affairs. Quite apart from conflicts between the UN and World Bank and within the UN system, there is also the G7, G20, G16, G77 and other groupings of


countries. While the rich G7/8 continue to assume the right make global policy, the newer G20 is struggling to forge a broader global consensus and the G77 remains more a party of opposition to the Northern agendas. Regional groupings of countries then have to be brought into the picture. Interaction between these has led to UN international social policy-making in recent years becoming stalemated as the EU, G77 and USA adopt entrenched positions. Bypassing all of this are the ad hoc international initiatives such as the ‘Marshall Plans’ for Africa, Afghanistan and the Balkans. These are worthy initiatives which are not systematically followed through and funding pledges evaporate when the international spotlight has moved on, while the alternative of independent funding for the UN system which might make follow up more reliable is firmly resisted by the global super-power. 3.2 International finance for global public goods

The increased recognition of and attention to cross border social problems such as disease transmission, illegal economic migration and international drug running has lead to the tabling of the idea of global public goods on the international agenda. A recognition exists that there may be global public goods that need to be provided from which all would benefit but that no particular country or corporation has an interest in providing. The paradox is that this increased recognition coincides with the historic decline of the means of funding such goods (donor AID). Among the policy issues associated with the global public good debate is the definition itself of global public goods. While economists contributing to the debate retain a strict technical definition of public goods, others would extend the definition in terms of what they regard as desirable international public provision. What is desirable then becomes contested. Elsewhere (Deacon 2000), I have criticised the adequacy of the international development targets; the Millennium goals that the OECD, UN and Bank have signed up to in the name of desirable public goods. While basic education for all and clean water should be priority goals, estimates of the costs of meeting them exceed donor commitments. At the same time, attention to the international public funding of basic services only detracts attention from the increased global privatisation of secondary and tertiary education, health and social protection which, if allowed to flourish, will undermine within–country social contracts where all classes have a stake in universal public provision. Regardless of what might be desirable as a shopping list of services that the international community should fund is the inadequacy of international funding mechanisms. The perpetuation (actually decline) of patronising and self interested ODA instead of new forms of international finance is the reality in 2002. Despite the long process leading to the 2002 Monterrey UN Finance for Development Conference, the UN is still struggling to maintain an authority to even consider

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innovative forms of international financing. At the same time, however, there are moves within the OECD and elsewhere to outlaw tax havens. Progress within the OECD to name and shame tax havens is making some progress in the light of September 11th, but any moves to standardise tax rates to combat tax competition, even within the EU, are firmly resisted by some. Instead of new systematic and reliable forms of international finance that would ensure that some global social problems were tackled seriously, we have the emergence of global public-private partnerships such as the GAVI and the Global Fund for AIDS/TB/Malaria (see Eeva Ollila’s chapter on global health-related public-private partnerships and the United Nations). In the absence of other systematic international funding, these new partnerships and funds attempt to fill the gap but are themselves open to the same donor-pledging shortfall and to the additional criticism that the governing bodies are unaccountable to the UN system and policy. 3.3 Global social regulation

Global or international social policy embraces issues of international social redistribution (discussed in the last section), global social regulation (addressed here) and the enhancement of global social rights (explored in the subsequent section). While fundamentalist neo-liberals see no need for the regulation of the international economy, those who do perceive this need are confronted with a number of seemingly intractable international policy stalemates. Among the current global social regulation issues is the question of how to preserve and improve global labour standards. While the most extreme expressions of Northern protectionism articulated at the 1996 WTO Ministerial Conference have given way to a more nuanced approach on the part of the EU, there is still a North-South impasse between those reformists in the North who would legislate globally now to outlaw ‘unacceptable’ labour standards and those in the South who argue that such improvement will arise only out of a struggle yet to be fought in the South in the context of development. In the meantime, new ILO core labour standards seem the basis of some interim global consensus. Caught up in the same North-South impasse was the attempt to establish a global set of social policy principles. This worthy idea, articulated first by the UK finance minister Gordon Brown, fell foul of the understandable Southern suspicion that such standards would be used as a new set of social conditionalities imposed on the South while the North still failed to fund their realisation in practice. Of equal importance in this category of global social regulation is the need to regulate emerging international markets in private health, education and social protection. The case for international regulation of these new international providers is only now being articulated. How equitable access to these service providers might be secured is even further down the agenda. Finally,


within this category may be put the fraught issue of whether and how to establish voluntary or mandatory guidelines for corporate social responsibility. Attempts to ensure Corporate Social Responsibility are currently focussed on the usefulness of the OECD’s guidelines on Multinational Enterprises and the extent to which the UN’s Global Compact will actually change business behaviour or merely change business images. 3.4 Global social rights

Citizenship claims have historically been articulated within confined borders and addressed to territorial entities. Globalisation is rendering this territorial basis of citizenship obsolete. Identities are increasingly cross border and solidarities arise as much within confessional groupings and ethnicities as within secular states. This raises the issue of international citizenship rights, entitlements and duties. Among the issues here are the moves to strengthen the attention given to social rights within the UN’s international rights agenda and procedures. The UN Secretary-General is proposing one annual country report to the High Commissioner for Human Rights that will cover the full range of international human rights treaties to which they are a party. At the same time, there is a tension between this trajectory of reform and the increased attention being given to cultural and regional diversity. A sharpening of the dissent expressed by some Islamic countries and the Vatican to established UN Human Social and Cultural Rights suggests that the fudged compromises on some of these questions at UN conferences is under pressure. At the same time, the implications of international labour mobility (both legal and illegal) for the social rights of migrants needs considering. The call for dual-citizenship rights for migrant workers is one expression of this. In the same policy terrain are the moves to establish an international social security and social assistance regime. Innovative work on universal socio-economic security within the ILO is breaking from the prior work-based systems of social protection to a citizenship or resident basis of social protection. While there has been some progress in bringing global social rights onto the international agenda, the World Bank until now has avoided using such a concept. But the World Bank has recently set up a working group to evolve its own approach to human rights.

4. Global social governance players and forums One of the complications of the global social governance reform issue is the large number of forums where agenda setting, policy debates and opinion formation take place. Among these are the Boards of the World Bank and IMF, the joint Bank/IMF Development Committee, and the IMF’s International Monetary and Financial

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Committee. In addition are the Annual Assemblies and periodic Ministerial meetings of the UN Social agencies (ILO, WHO and UNESCO) as well as the WTO. To these must be added the ad hoc reports to the UN Secretary-General, UN DESA, and UN agencies on aspects of globalisation. Among the most recent and important of these is the WHO Commission on Macroeconomics and Health that reported in December 2001. Upcoming is the ILO’s World Commission to examine the Social Dimension of Globalisation. More regularly are the UN ECOSOC meetings together with the UN Commissions on Social Development and on Sustainable Development. These have been punctuated in recent years by the several UN Summits on aspects of social development culminating from the standpoint of global social policy in the Copenhagen and Copenhagen+5 process which concluded in Geneva in 2000. To this complexity must be added the annual gatherings and working parties of several global think tanks and development networks. Among these are the ‘Davos’ World Economic Forum, the ‘Porto Alegre’ World Social Forum, the State of the World Forum’s Commission on Globalisation, the Global Development Net (GDN) initially sponsored by the World Bank, and the work of several international philanthropic foundations including the Ford, Rockefeller, Soros, Turner and Gates foundations. Also contributing to the babble of voices are the policy pronouncements of the major international NGOs and civil society organisations including Oxfam, the International Council on Social Welfare (ICSW), Transnational Institute (TNI) and International Confederation of Free Trade Unions (ICFTU)and Southern equivalents such as Third World Network (TWN) and Focus on the Global South. Then again is the work of the OECD, and in particular its recent activities on tax havens, globalisation and development together with its series of regional global forums. At a regional level, there are the meetings of the Trade, Development, Social Affairs, External Affairs, and Enlargement Councils of the European Commission and other regional groupings of countries. Alongside these are the meetings of G7/8, G20, G16 and G77 policymaking processes in international political alliances such as the Second International, and finally international scholarly gatherings and invisible college processes often allied to agenda setting activities such as Stiglitz’s Centre for Global Policy alternatives at New York’s Colombia University. Substantive proposals to reform the institutions of global social governance and strong arguments to reform global social policy have emerged from all of these forums. We will consider the substance of some of the more radical of these in the next section. The subsequent section then assesses their viability. Following this, the new form of policy-making process emerging out of this cacophony of stakeholders and voices is discussed.


5. Ambitious global social governance reform There have been a number of calls for global institutional reform and global social policy change in the past decade from international civil society and scholarly communities. These have included: • the establishment of a global tax authority; • the expansion of the G20 to include regional groups of countries; • the further democratisation of the UN by means of a world peoples’ assembly; • mechanisms to make the Bretton Woods institutions more accountable to those who receive loans; • the creation of an Economic Security Council. A range of recent international reports and publications were reviewed to form a basis for points made in this chapter1 . Taken as representative of what it is acceptable to place on the international policy agenda by those engaged directly in nudging reform forward, it can be seen that some of these reforms do find a place. UN democratisation and better inter agency co-operation is there. Greater accountability of the Bretton Woods institutions figures also. A strengthened ECOSOC crops up several times. Global taxation is, however, something that is felt to be difficult to defend against the world super-power. At the same time, some of the reports point in the direction of some of the newer global governance mechanisms which are discussed in a later section of this chapter, namely Global Policy Networks. In terms of recommendations from the scholarly community, we should include a major review of the World Bank and the UN, Dinosaurs or Dynamos by Bergensen and Lunde (1999), who concluded that the UN should retreat to fulfilling a normative function – setting guidelines and rules and doing this well – and should leave the Bank to implement development practice. It did, however, suggest that the Bank could alternatively aim to be the global repository of knowledge on development questions. This would, I believe, continue the constant tension between the UN and the Bank, both competing to define good policy and practice with different ideological slants. Two more recent books writing within this formal approach to global institutional change and to the reform of global social policy are those by Nayyar and Townsend. Reviewed were the UNDP Human Development Report 2002 which addressed issue of global democracy; the Outcome of the UN’s 2002 Finance for Development Conference; the Copenhagen+5 final report from 2000; the recent WHO Report of the Macro-Economic Commission; and the Millennium Report of the Secretary-General. The table produced is available from the Author. 1

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Deepak Nayyar (2002) in calls for three institutional changes in the sphere of social policy: a) full or partial independent UN funding, b) the establishment of a Global Peoples Assembly, and c) the creation of an Economic Security Council to parallel the Security Council. This Council would ensure that the United Nations provides an institutional mechanism for consultation on global economic policies. In terms of global social policy, Townsend (2002) has published a manifesto for international action to defeat poverty which makes 18 points such as the global legal enforcement of a right to an adequate standard of living, the global legal requirement on all developed countries to contribute 1% of GNP to overseas development and the introduction of new international company law. We return in the next section to the political viability of the implementation of such reforms and to whether it is appropriate any longer to think in terms of such major institutional change and major policy shifts. One way of imagining an even more radical global social governance reform is to project onto the global level those institutions and policies in the social sphere that operate at national and regional (EU) level. In the first table, we can see how far we are from establishing at a global level anything approaching a system of social governance that is already emerging at the European level. In the second table, we can see what kind of institutional reform would be required at the global level to emulate national and European governance and policy-making. Governing Globalisation

Table A. The social functions of governance at national, regional and global level FUNCTION/ POLICY FIELD

NATIONAL GOVERNMENT

EU REGIONAL GOVERNMENT

Economic stability

Central Banks

Central Bank in EURO zone IMF/ Bank of International Settlements?

Revenue Raising

National taxation

Customs revenues plus government ‘donations’ (talk of tax harmony and regional tax)

None but mix of UN appeals, ad hoc global funds, bi and multilateral ODA.

Redistribution

Tax and income transfers policy plus regional funds

Structural funds on social criteria.

None but ad hoc humanitarian relief, special global funds, debt relief and differential pricing (drugs).

Social Regulation (Labour and social standards)

State laws and directives. EU laws and directives.

Social Rights (Citizenship Court redress. Consumer Empowerment) charters. Tripartite governance.

EU Luxembourg Court Redress. Tripartite Governance.

CURRENT GLOBAL ARRANGEMENTS

Soft ILO, WHO etc conventions. UN Conventions. Voluntary codes. UN Commission For Human Rights but no legal redress. Civil Society Monitoring.


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Table B. The current institutions of social governance at national and EU level and suggested reformed institutions at the global level CONSTITUENT INTERESTS

NATIONAL INSTITUTIONS

EU REGIONAL INSTITUTIONS

POTENTIAL REFORMED GLOBAL INSTITUTIONS

The electorate

Parliament.

EU Parliament with fewer powers

World Peoples Assembly?

Government Ministers

Cabinet etc.

Councils of Ministers

Reformed UN ECOSOC?

Civil Service

Ministries.

EU Commission

Combination and Rationalisation of Overlapping Sector Functions of UNDESA, UNDP, ILO, WHO, UNESCO, World Bank, WTO, OECD, and NEW Tax Authority.

Judiciary

Courts

Luxembourg Court (And C of E Strasbourg Court of Human Rights)

New International Court with Human Rights Mandate.

Capital

Central Bank

Central Bank

Central Bank

Labour (civil society)

Trade Unions (TUs) and statutory consultations.

TUs on Economic and Social Committee and consultations.

Enhanced TU and civil society consultation mechanisms

To make this suggestion that we might model a reformed global governance on EU governance mechanisms is not to endorse uncritically as fully effective these EU mechanisms. Indeed, as I have argued elsewhere (Deacon 1999), the response of the EU to neo-liberal globalisation in terms of both its internal and external social dimension has been variable over time and between component parts of the EU system. The EU has not consistently been a model for a transformed socially responsible globalisation. The EU has exhibited tendencies to: • • •

accommodation to the liberalising global agenda in labour markets and associated social policy; social protectionist inclinations in some of its trade dealings; ineffectiveness in terms of World Bank discussions on global financial regulation.

Its parliament has limited powers, the Union has yet to enshrine its policy on human and social rights into law, the effectiveness of its social fund is questioned and it possesses no independent taxation authority.

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While ambitious reformist ideas of this kind may be regarded as utopian at best, it is to be noted that some of these issues do surface in the latest Report of the SecretaryGeneral to the 57th session of the UN which is entitled . It recognises (para.19) the growing role of the UN in helping to forge consensus on globally important social and economic issues and calls for the corresponding strengthening of the principal organ concerned with those issues, namely the Economic and Social Council (ECOSOC). It stresses the need for improved agendas and stream-lined business. At the same time, the report (para.130) says the Department of Economic and Social Affairs will be strengthened with the appointment of a new Assistant General Secretary and the creation of a policyplanning unit within it. Strengthening of the United

Nations: an agenda for further change

6. Obstacles to ambitious global social governance reform and likely pragmatic developments In practice, of course, there are many political and institutional obstacles to such radical reforms as the merging of the Bank and the UN agencies into one global civil service, and creating a new source of UN funding. Even the attempt to make the ECOSOC an effective body that would be taken seriously by the Bank and the US government is harder than the UN Secretary-General might imagine. Only the high level segment of ECOSOC brings together Ministers who have these issues as their brief. More often, lower level meetings are bedevilled by the basic problem that besets most UN meetings, the inability of the country delegate to address the substantive issues at hand. Ill worked out country positions on social and economic agenda items are conveyed by civil servants whose expertise does not lie in this area. While countries do not have a coherent and joined-up policy towards global economic and social issues such that each Ministry and hence each UN delegate speaks to the same brief, it is impossible to expect ECOSOC to evolve through debate a coherent global economic and social policy. At the same time, ECOSOC is structured such that the Second Committee considers economic matters and the Third Committee considers social matters, further preventing the development of a coherent UN economic and social policy. Quite apart from the unworkable political process flowing from the flawed UN concept of one nation one vote, even getting a coherent global economic and social policy within the Executive of the UN is problematic. For example, the Department of Social Policy Development did not collaborate with the upstairs Division for Public Economics and Public Administration (PEPA) on the PEPA’s new volume on (2002). The World Public Sector Report:

Globalization and the State


This in-house fragmentation is, of course, why the Secretary-General is proposing a strengthened policy unit inside the Department of Economic and Social Affairs. In the meantime, he is in effect creating his own UN Economic and Social Policy that emerges in practice through the networked processes of the Global Compact and the Millennium Project and bypasses those charged within UNDESA to fashion such a policy in dialogue with country delegates in ECOSOC and the Commission on Social Development. But the obstacles to such major institutional reforms or such mould-breaking global policy initiatives are greater than these. They include Southern resistance to the Northern reform agenda favouring de-globalisation. A number of writers from the South have pointed out that the history of Northern imposed conditions in the context of structural adjustment means that even well-intentioned Northern reform ideas are unlikely to be received readily (www.focusweb.org), (www.global-South.net), (www.undp.org/tscd). As we have seen, reaction against the worst excesses of global neo-liberalism gave rise in the 1990s to a number of mainly Northern generated initiatives to begin to challenge this policy drift, to reinsert a social purpose into the global economy and to counter some of the more obvious negative aspects of partial global economic integration. These included the suggestion to include a social clause in trade agreements; the proposition for a better-than-safety-net set of global social policy principles; the emergence of the discourse concerning global public goods; the increased emphasis given to social rights in the human rights agenda; and the emergence onto the UN agenda of global tax regulation. But in terms of reaching a North-South agreement on a global approach to national social policy that goes beyond safety nets, there are real obstacles to be overcome. An impasse now seems to have been reached in the global dialogue concerning desirable social policies to be implemented in an era of globalisation. Northern-based global social reform initiatives, such as the social policies principles initiative, that were concerned to modify the free play of global market forces with appropriate global social policies of international regulation have met with understandable but frustrating opposition from many Southern governments and some Southern-based NGOs and social movements. The debate in Geneva 2000 characterized this development when the proposal for a set of social policy principles was rejected on the grounds that these might become a new conditionality imposed by the North and that there was anyway no money forthcoming from the richer countries to help pay for the implementation of such principles. Moves beyond this impasse would seem to require two changes. One would be a greater commitment on the part of the North to support international resource transfers to pay for global public goods such as basic universal education combined with an opening of trade opportunities in the North for Southern countries. The other is for the South to own and develop for itself any such social policy principles or standards based on a review of best practice in the South.

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At the same time, there has emerged the very important Northern ‘neo-liberalism’ alliance with this Southern resistance that in part champions global neo-liberalism and unfettered increased free trade as being in the interests of the South. The UK, in criticising some of the EU and the USA’s worst policies of protectionism, are champions of Southern empowerment and development through trade (www.dfid.gov.uk). This is potentially a powerful North-South alliance that might challenge other North-South alliances that are more concerned to establish global social ground rules and effective global social institutions. But government ministers Gordon Brown and Clare Short, as central actors in this UK strategy, do also address the issue of global inequity. They initiated the stalled global social policy principles, pursued the reduction of drug prices for Southern countries, and are among the most articulate global players supporting the need for more finance for achieving the international development goals. Any serious attempt to build an alternative global political alliance for more systematic global social policy reform needs to engage them. (See Brown, A New Deal for the World, www.fabianglobalforum.net ). Finally, as a further obstacle to ambitious global social governance reform is the continued appeal of national sovereignty combined with a limited popular constituency for radical global reform. This and the appeal of cultural diversity will ensure that any attempt to construct a more effective system of international governance will meet with resistance. The national basis of democratic process feeds this conservatism. Unless the global reform agenda also addresses the case for a culturally pluralist world, progress will be limited. All of this suggests, therefore, that a reform agenda that is more circumscribed than Ambitious Reformism is the likely prospect for the next decade. This might embody elements of moves to a constructive regionalism with a social dimension as a building block to an inter-regional globalisation that acknowledges the case for pluralism. The problem is that, in some parts of the world, regional groupings of countries are underdeveloped. We may also expect increased International Institutional Cooperation and Policy Convergence rather than a realignment of power between the World Bank and UN. On the feasible agenda is funding and mechanisms to facilitate a more effective Southern voice(s) in the global debates and institutions such as the WTO. We will see more Global ‘Philanthropy’, donation and public-private partnerships rather than global taxation, and probably the improvement of the UN’s Global Compact with an element of monitoring and including voluntary regulation to encourage ‘socially responsible’ TNCs. Certainly, there will be more tasks forces and ad hoc initiatives of the Millennium Project kind, demonstrating in practice how global social policy change might be forged. This is not to dismiss some of these steps as unhelpful from the standpoint of the wider agenda to reform neo-liberal globalisation. In particular, the moves to constructive


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regionalism with a social dimension and the increasing empowerment of some Southern countries in the global arena is to be welcomed. Several emerging trading blocs and other regional associations of countries in the South are beginning to confront in practice the issues of the relationship between trade and labour, social and health standards, and the issue of how to maintain levels of taxation in the face of competition to attract capital. In this context, the potential advantages for developing countries of building a social dimension to regional groupings of countries are being considered. Such advantages may be summarised as having an external and internal dimension. In relation to the rest of the world, such an approach affords protection from global market forces that might erode national social entitlements and can create the possibility of such grouped countries having a louder voice in the global discourse on economic and social policy in UN and other fora. Internally, through intergovernmental agreement, regionalism would make possible the development of regional social redistribution mechanisms, regional social and labour regulations and regional sectoral social policies in health and education. They might also develop regional social empowerment mechanisms that give citizens a voice to challenge their governments in terms of supranational human and social rights. A regional approach could facilitate intergovernmental co-operation in social policy in terms of regional health specialization, regional education cooperation, regional food and livelihood cooperation, and regional recognition of social security entitlements. This in turn would facilitate the regulation of the de-facto private regional social policies of health, education and social protection companies. 7.

Global networks, partnerships and projects, or global political alliances?

Because significant global institutional reform seems check-mated and major global social policy change is difficult to achieve, and because there are now so many loci of action and initiatives on global social issues, we may be witnessing a shift in the locus and content of policy debate and activity from those more formally located within the official UN policy making arenas (whether of ECOSOC in New York or in the councils of the ILO and WHO in Geneva) and focussed on UN/Bretton Woods institutional reform such as the establishment of an Economic Security Council to a set of practices around Networks, Partnerships and Projects which, in some ways bypass, these institutions and debates and present new possibilities for actually making global change in particular social policy arenas. Ngaire Woods, in a chapter in Held and McGrew’s (2002) , argues: Governing Globalisation

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“The global governance debate is focused heavily on the reform and creation of international institutions....yet global governance is increasingly being undertaken by a variety of networks, coalitions and informal arrangements which lie a little further beyond the public gaze and the direct control of governments. It is these forms of governance that need sustained and focussed attention to bring to light whose interests they further and to whom they are accountable. (emphasis added)

Among examples of these networks, partnerships and projects are the UN SecretaryGeneral’s Millennium Project involving ten task forces to manage the implementation of the Millennium Development Goals. The essence of this emerging networking and partnership form of policy development and practice-shifting through a focus on specific projects is the collaboration between stakeholders in international organisations, the global corporate sector, international NGOs and civil society organisations. Such a shift in the locus and substance of global policy-making and practice has received support recently from commentators coming from very different intellectual positions. Rischard (2002), The World Bank’s Vice President for Europe, in High Noon: 20 Global Issues and 20 Years to Solve Them, argues that global multilateral institutions are not able to handle global issues on their own, that treaties and conventions are too slow for burning issues, that intergovernmental conferences do not have adequate follow up mechanisms and that the G7/8 type groupings are too exclusive. Instead, what is needed are Global Issues Networks (GINs) involving governments, civil society and business facilitated by a lead multilateral organisation which create a rough consensus about the problem to be solved and the task to be achieved, the norms to be established and the practice recommendations and which then report on failing governments and encourage good practice through knowledge exchange and a global observatory which feeds a name-and-shame approach. Charlotte Streck in Global Environmental Governance: Options and Opportunities argues for Global Public Policy Networks (GPPNs) which bring together governments, the private sector and civil society organisations. She insists that recent trends in international governance indicate that the focus has shifted from intergovernmental activity to multi-sectoral initiatives from a largely formal legalistic approach to a less formal participatory and integrated approach. Such GPPNs can agenda-set, standard-set, generate and disseminate knowledge and bolster institutional effectiveness. Streck is building here on the work of Reinicke and Bennet (2000) who argued that International Organisations had a particular role they could play in GPPNs as convenor, platform, net-worker and sometimes partial financier (see also www.gppi.net). There is clearly something in these accounts of the way policy-making has become projectised and task centred. A key question is how intervention in these tasks and projects might be anything other than opportunistic or self interested or pragmatic. Because so much of this kind of work is subcontracted in terms of its intellectual and policy content and in terms of implementation, principles that guide these actors


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become important. This raises the question again of how these principles are to come into being. There is a case, therefore, for not only the networks and partnerships focused on short-term projects and tasks but also for longer term that might fashion sets of principles and steer members of the task forces. If intervention to mend neo-liberal globalisation is project based, then the actors in those projects need a solid ethical reference point and set of policy principles against which they can assess their proposals for action. We are back to global social policy, but not a policy to be debated and won in the chambers of the UN or won in intellectual dialogue with Bank experts (though these activities need to continue): instead, a policy implemented in practice by those who find themselves on such projects. A global reformist political alliance would act as a reference point for actors in practice. Attempts to forge such global policy frameworks to guide practice exist. The Second Socialist International is one such mechanism which fosters a common approach to international policy issues in all countries which are run by parties affiliated to it but is becoming less effective as power shifts from governments to networks. A novel alternative is the International Simultaneous Policy Organisation (ISPO) (www.simpol.org) which attempts to foster a common policy agenda such as the Tobin Tax in all governments at the same time but, again, it is government focussed. Some global foundations have turned recently to global policy advocacy in an attempt to shift international practice. Rockefeller has a Global Inclusion Project. Carnegie within the framework of its Global Policy Programme has set up a Managing Global Issues Project to learn lessons within a value framework from attempts to solve different global problems. Stiglitz is encouraging reflection upon such issues within his new Centre for Policy Alternatives. The Helsinki Conference for Democracy and Globalisation might be another such seeking ‘Transformative Global Partnerships’ (www.helsinkiconference.fi). There are three kinds of already existing global political alliances that need to be taken into account in shaping what I am now arguing for. There is the global civil society alliance based on the Porte Allegro process. While this is a rich mix of organisations and interests, it is stumbling towards articulating an alternative globalisation. At the same time, the major thrust of the UN Secretary-General and some of the UN agencies at the moment seems to be toward cementing the global UN-business alliance. What is missing is global political alliance for a reformed globalisation that is centred upon reform-minded governments and reform-minded international civil servants. In its place is the other actually existing global political alliance described earlier. The UK-led North-South alliance for Southern involvement in the global economy fleshed out with ad-hoc initiatives such as support for the Millennium targets and reduced drug prices occupies this space. Space exists for a coalition to be formed of like–minded governments together with actors within the UN system and some major INGOs to work towards the articulation of a globalisation global political alliances

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with rules and justice governed by a more coherent global governance system. Work within the Second International could form a basis of this but the coalition needs to be much broader. Those who share this perspective and who are in a position to influence the direction of the G20 or have the opportunity to work to reform ECOSOC or who are able to influence the IMF/World Bank Development Committee or who are able to shape the outcome of the World Commission on the Social Dimension of Globalisation or are otherwise influential on the global policy stage need to address concrete policy options for improved global social governance. Is the call for an Economic Security Council viable or is reform of ECOSOC a better bet? Can USA objection to global taxation ever be overcome/bypassed and how? Is activity targeted at improving global governance misguided and effort better expended within each region to construct a decentred globalisation of constructive regionalism? At the same time, such a global political alliance could articulate principles for practice within the new governance modes of networks, projects and partnerships. If Global Policy Networks are the way forward and, as the Secretary-General says in his Millenium Report “need a more focused and systematic approach”, then such a global political alliance could be a systematic policy reference point for those engaged in such networks.

8. A Strategy for Finland and like-minded countries The Report on Globalisation of the Ministry of Foreign Affairs of Finland to the Foreign Affairs Committee of Parliament in 2001 stated “Finland supports the development of the UN as the principal actor in the democratic management of globalisation”. Finland “aims at managing globalisation by developing more comprehensive and effective mechanisms and rules for international cooperation”. Some other like-minded countries have begun to articulate similar globalisation policies. It might be hoped that Finnish and like-minded government policy on Global Social Governance will develop towards a more comprehensive and radical policy that embraces some elements of the radical social governance reform agenda described earlier. Thus it might aim for: 1. 2. 3. 4. 5.

A more equitable globalisation; A more socially regulated globalisation; A more powerful role for the UN in global economic and social affairs; The introduction of new international taxation to pay for global public goods. The empowerment of the South in international decision-making processes.


At the same time, such countries need to engage with the more limited viable reform agenda described earlier and will be engaged in networks, partnerships and projects seeking to change international practice. Among the tactics and strategies available to the Finnish and like-minded governments for furthering both the more ambitious reform agenda and for helping to ensure that project practice is governed by principle rather than just pragmatism might be the following: 1. Working within the EU to strengthen its voice as a ‘progressive’ global player in these policy discussions in several forums and work within other regions to argue for the replication of EU practices where appropriate. 2. Collaborating via the EU with the G77 to secure a greater EU – South understanding on global governance issues. 3. Increasing funding opportunities for South-South collaboration and Southern empowerment in the international governance system. 4. Utilising the placement of Finnish civil servants and experts in secondments to International Organisations and Task forces to spread by soft-means-best social policy practice. 5. Working to strengthen those actors in the UN system who are finding ways of applying the Nordic traditions of equity and universalism on an international scale (UNRISD, UNICEF and ILO-SES). 6. Maximising the impact of the Finnish joint Presidency of the ILO World Commission by engaging directly on the global political stage with other key national players such as the UK who are adopting a more neo-liberal global agenda. 7. Utilising the current Finnish membership of the ECOSOC Board in conjunction with new and subsequent President of ECOSOC to work quietly for the strengthening of the role of a reformed ECOSOC in the global management of the economy. 8. Work with like-minded countries such as Canada to give greater credence to the role of the G20 and especially argue for its potential for being a world economic authority that involves Southern regional blocs as members.

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9. Encourage Finnish based business to lead the way in accepting the importance of international social regulations rather than weaker international voluntary agreements. 10. Encourage (maybe after the ILO Commission has reported) the regular meetings of like-minded national and international actors who favour a reformed globalisation. One possibility is working to build upon the regular UNRISD retreats of UN Social Agencies and argue to expand these to include individuals in the World Bank, WTO as well as other key sympathetic global players such as those in the G20 and G77 in order to construct a global political intergovernmental alliance for global social governance reform. This intergovernmental and IO alliance would compliment and work with emerging international NGO/ civil society alliances such as the Porto Alegre process. It would be a global reformist policy alliance. It would be a complement to the UN’s compact with the business world. The Helsinki conference process is a possible starting point for such a global social reformist political alliance From the earlier analysis, four principles may be drawn out to guide the policy and practice of Finland and like-minded countries as they engage in the kinds of activities listed above: • • • •

Forging alliances with global Southern country partners and groups within which Southern voices are heard. Empowering developing countries in international forums should be a priority for Northern governments. Supporting approaches to world regionalism within which the social dimension of trading arrangements is given due attention. This way an alternative to global neo-liberalism can be built. Working always to achieve a more equitable access to services and provision both within and between countries. Establishing within-country policy synergy towards global questions across all Ministries. Contributing to an equitable and ruled based globalisation must become lenses through which all government policy is filtered. This point is developed below.

Key is within country synergy on a progressive approach to globalisation.

We conclude by insisting that, in order to secure a more effective role within the global governance reform debate and practice, a requirement is that Finnish all


Ministries and government agencies, (and to a lesser extent Finnish business and civil society) act with a common policy on globalisation that is guided by the equitable and rule-based principles suggested earlier. This is a reflection of the point made earlier about the difficulty at the UN level of forging a common consensus and compromise on globalisation policy when countries themselves do not have such a coherent approach. International equitable and sustainable social development should become not only the policy of the Finnish Development Agency and Finnish Social Policy but also the policy of the Ministry of Trade and the Ministry of Finance. Policy synergy is the key to effective national action on the global stage. Policy coherence between the UN social agencies and the Bank/WTO/IMF is predicated upon policy coherence between National Ministries of Social and Development Affairs and National Ministries of Finance and Trade and Agriculture. Ruth Jacoby, Director-General for International Development Co-operation for Sweden and Chair of the UN Conference on Finance for Development in Monterrey, speaking at the ICSW’international conference in June 2002, argued that synergy between the portfolios of national ministries of finance, trade, agriculture and those concerned with social development questions was the key to a better world. For Finland and other like-minded countries, the priority would seem to be a series of within country inter-Ministerial meetings to ensure a greater degree of policy coherence centred on achieving a progressive role for Finland in the international debates and practices with regard to the social dimension of globalisation. All Ministerial policy of all Ministers needs to be assessed against this benchmark.

Acknowledgements I would like to thank Minna Ilva for background research that informed this chapter and my other GASPP colleagues, Paul Stubbs, Eeva Ollila and Meri Koivusalo, for comments on earlier versions of this work. Bob Deacon, November 2002

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References Annan, K. A. (2000), ‘We the People’s’. The role of United Nations in the 21st century. United Nations, New York. Bergensen, H. O. and Lunde, L. (1999), Dinosaurs or Dynamos: The United Nations and The World Bank at the Turn of the Century, Earthscan, London. Brown, G. (2002), A New Deal for the World, [online] available: www.fabianglobalforum.net/forum/ article014.html. Castells, M. (1996), The Rise of the Network Society, Blackwell, Oxford. Deacon, B. (1999), Socially Responsible Globalisation: A Challenge for the European Union, Ministry of Social Affairs and Health, Helsinki. Deacon, B. (2000), Globalization and Social Policy, United Nations Research Institute for Social Development, Geneva. Deacon, B. (2001), The Social Dimension of Regionalism, Stakes, Helsinki. Deacon, B. (2003) The Prospects for Equitable Access to Social Provision in a Globalizing World, in: Krizsan, A. et al (eds) Reshaping Globalization: Multilateral Dialogues and New Policy Initiatives, Central European University Press, Budabest. Deacon, B., Hulse, M. and Stubbs, P. (1997), Global Social Policy: international organizations and the future of welfare, Sage, London. Falk, R. (1999), Humane governance for the world: Reviving the quest, Review of International Political Economy, vol. 7, no. 2 pp. 317–34. Held, D. and McGrew, A. (2002), Governing Globalization, Polity Press, Cambridge. Held, D., McGrew A. et al (eds.) (1999), Global Transformations: Politics,Economics and Culture, CUP, Cambridge. Ministry for Foreign Affairs of Finland (2001), A Report on Globalization for the Foreign Affairs Committee of Parliament, [online] available: www.formin.fi/english/. Mishra, R. (1999), Globalization and the Welfare State, Edward Elgar, Cheltenham. Nayyar, D. (Ed.) (2002), Governing Globalization. Issues and Institutions, Oxford University Press. O’Brien, R., Goetz, A. M., Scholte, J. A. and William, M. (2000), Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements, Cambridge University Press, Cambridge. Rischard, J. F. (2002), High Noon: Twenty Global Problems, Twenty Years to Solve Them, Perseus Books, Oxford. Scholte, J. A. (2000), Globalization: A Critical Introduction, Macmillan, London. Streck, C. (2002), Global Public Policy Networks as Coalitions for Change, in: Esty, D. and Ivanova, M. H. (eds), Global Environmental Governance: Options and Opportunities, Yale University, Yale. Therborn, G. (2000), Globalization: Dimensions, Historical Waves, Regional Effects, Normative Governance, International Sociology, 15. Townsend, P. and Gordon, D. (eds.) (1999), World Poverty: New policies to defeat an old enemy, Policy Press, Bristol. United Nations (2000), Further initiatives for social development, 5 Dec 2000. A/RES/S-24/2. United Nations (2002) Plan of Implementation of the World Summit on Sustainable Development, in: Report of the World Summit on Sustainable Development, Johannesburg, South Africa, 26 Aug – 4 Sep 2002, A/CONF.199/20. United Nations (2002), Report of the International Conference on Financing for Development, A/ CONF.198/11. ,

Social Policy & Society 4:4, 437–445 Printed in the United Kingdom C 2005 Cambridge University Press doi:10.1017/S1474746405002629

The Governance and Politics of Global Social Policy Bob Deacon Department of Sociological Studies, University of Sheffield Email: [email protected]

This paper does four things. It reviews recent contributions to the literature concerning ‘global social policy’ – understood here as global social redistribution, global social regulation and global social rights. It traces recent developments and initiatives in one of these aspect of global social policy namely mechanisms of global redistribution. It discusses developments in the governance of global social policy arguing that this is increasingly the province of global networks, partnerships and tasks forces somewhat removed from public scrutiny. Finally, it reflects upon the need for and prospects of a global social reformist project and the contribution that both research and political alliances might play in this.

I n t ro d u c t i o n This paper firstly reviews recent contributions to the scholarly literature concerning ‘global social policy’, understood in this context1 as global social redistribution, global social regulation and global social rights. It then traces recent developments and initiatives in one aspect of global social policy, namely mechanisms of global redistribution. It discusses developments in the governance of global social policy, arguing that this is increasingly the province of global networks, partnerships and tasks forces somewhat removed from public scrutiny. Finally, it reflects upon the need for and prospects of a global social reformist project, and the contribution that both research and political alliances might play in this. The paper reflects some of the findings of the Anglo-Finnish Globalism and Social Policy programme (www.gaspp.org) that I have been involved with for the past few years. Some parts of this paper are based upon other recent or forthcoming products of the programme, including recommendations made to the Finnish Government as to how they and like-minded governments might advance a socially just globalisation (Deacon et al., 2003) and a contribution to a recent UNRISD2 conference assessing the contribution that scholars working in and around the UN system have made to policy making at the global level (Deacon, 2004). This is part of a work in progress (Deacon, forthcoming).

Global social policy Global social policy – understood here as global redistribution regulation and rights – embraces the emerging mechanisms of global social transfer (Funds for AIDS/TB/Malaria, differential drug pricing, the projected Global Social Trust Network), global social regulation (The UN global compact, core labour standards, international food quality 437

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regulation) and global social rights (the advancement up the UN agenda of social rights and their monitoring and enforcement through soft law). In 1997 Deacon et al. asserted, ‘There is now a global social policy, constituted of global redistributive mechanisms, global regulatory mechanism, elements of global provision and empowerment’ (p. 213). Given this, we went to on to argue our preference for ‘a global social reformist project which would call for more rather than less redistribution of resources between states, for more rather than less global social and labour regulation as a framework for the operation of corporations, for more rather than less authority to be given to supranational bodies to intervene in the affairs of states where those states fail their citizens’ (ibid.). The argument continues by insisting on the linkages between the elements. ‘There should be no free trade without global social regulation. There should be no global social regulation without global redistribution. To ensure citizens (and not their governments) benefit there should be no global social redistribution without the empowerment of citizens before a global court of social rights. Trade, regulation, redistribution and empowerment go hand in hand.’ Since then we have seen the unfolding of the politics of this global project and its stumbling on four counts, all of which suggest the difficulty of developing an effective form of global social governance: 1. the unilateralism of the USA, which has delayed or set back improved UN governance in these field; 2. the social protectionism of the EU, which has lead to a North–South impasse in global policy negotiation (Van Reisen, 1999; Holland, 2002); 3. the opposition of many Southern governments and voices to a Northern-driven agenda, especially when the resources to fund one key element of the matrix – redistribution – is missing (Bello, 2004); and 4. a concern that this global social reformist project, which can be seen as a western modernist project, does not respect immense regional cultural differences (Rieger and Liebried, 2003). Or as Yeates put it, ‘It must be acknowledged that historical, cultural, ideological, religious and institutional differences render the pursuit of “universal” public goods, or an agreed global cosmopolitan form of progress particularly difficult’ (2001: 169). None-the-less others continued to develop the idea of a global social policy. Townsend and Gordon acknowledge that ‘what remains is perhaps the most difficult: to bring about extensive redistribution of resources between and within countries to eradicate poverty and establish decent human rights’ (2002: 421). But they assert that this objective ‘is more plausible to world opinion than it was even five years ago’. George and Wilding devote a whole chapter to ‘The future of global social policy’. They argue for seven major roles for social policy at a global level and conclude that ‘global social policy will be multi dimensional- a mix of regulation, redistribution, provision of services and guaranteeing of basic rights’ (2002: 192). They argue that the bringing into being of such a comprehensive global social policy will require ‘creative thinking about . . . a radically new approach to global governance’ (ibid.: 210). This is something we return to in a later section. The case for a social democratic approach to the management of globalisation has been made by scholars working in disciplines other than social policy. Political scientists (Patomaki, 1999; Patomaki and Teivainen, 2004; Held, 2004; Lent, 2005) are among such contributors. The political desirability and feasibility of this wider global social democratic 438

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project, given the objections to it that we have noted, will be returned to in the closing section of the paper. The next section of this paper, keeping its focus on global social policy, examines in some detail proposals and ideas arising in one of its three dimensions namely global redistribution.

G l o b a l s o c i a l re d i s t r i b u t i o n In the context of widening global inequity, there is a case for global redistribution and for establishing a global levy through international taxation and other means to facilitate such redistribution (Patomaki and Teivainen, 2004; Atkins, 2004). The case for a tax on airline fuel for these purposes is currently being argued for in the context of the July 2005 G83 meeting by the French government. How might this new money be spent? How might international social transfers take place? What mechanisms for global resource allocation might be developed? Who would decide and on what criteria would allocations be made? Are there steps being taken upon which this project could be built? Some initial answers to these questions are suggested below. How far these are developed further in practice will obviously be the outcome of a period of international and supranational debate and consensus building. Among existing mechanisms for international redistribution and the one we shall use here as an example are the ones used by the Global Fund to Fight AIDS, TB and Malaria (www.theglobalfund.org). This fund uses a combination of criteria and mechanisms to allocate its resources where they are needed most in the world. Using the World Banks’ categorisation of countries into low and middle income, the fund firstly distinguishes between low-income countries that are fully eligible for monies and lower-middleincome countries that must match international funds with national funds. A few uppermiddle-income countries are also eligible in much the same way as lower-middle-income countries, if they have exceptional need based on disease burden indicators. The procedure used by this fund for allocating funds, within the constraints above, is based on a competition between bids from Country Co-ordinating Mechanisms (CCMs) within each eligible country. CCMs are encouraged to develop partnerships with the private sector, the professions and users groups. Where governments are nonfunctioning, the applications can be made via non-governmental organisations. A board of internationally appointed technical experts adjudicate between competing applications, using the following list of criteria: epidemiological and socio-economic criteria, political commitment (of recipient governments), complementarity (to national effort), absorptive capacity (of governance mechanisms), soundness of project approach, feasibility, potential for sustainability and evidence of national evaluations and analysis mechanism in place. Critics (Ollila, 2003) have however pointed to a worrying aspect of the ad hoc fund for AIDS, TB and Malaria, as well as of other initiatives such as the Global Alliance for Vaccination and Immunization (GAVI). The concern is that such funds lack democratic accountability and detract from more systematic processes of global health funding which could be developed under the auspices of the World Health Organisation (WHO) (Ollila, 2003: 53). These criticisms stem from a wider concern that the bringing of corporate interests into partnership with the multilateral system may erode the existing governmentbased multilateral system, rather than lead to its strengthening and democratisation (Martens, 2003). My point would be that some of the technical allocation mechanisms used by the Fund might usefully be built upon by democratised and strengthened global 439

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social governance. It is to the topic of global (and regional) social governance that we now turn.

Global social governance What passes for a system of global governance in the social sphere is a complex of overlapping and competing agencies, all seeking to influence policy. At the global level, there are a number of competing and overlapping institutions and groupings of countries, all of which have some stake in shaping global social policy towards global social problems. This struggle for the right to shape policy and for the content of that policy is what passes for an effective system of international social governance (Deacon et al., 2003). The fragmentation and competition may be analysed as being made up of five groupings of contestations. First The World Bank, International Monetary Fund (IMF) and the World Trade Organisation (WTO) are in competition for influence with the rest of the United Nations (UN) system. The Bank’s health, social protection and education policy for countries and for the world is, for example, not the same as that of the WHO, International Labour Organisation (ILO) or United Nations Education Scientific and Cultural Organisation (UNESCO) respectively. While the world may be said to have one emerging Ministry of Finance (with lots of shortcoming), it has in effect two Ministries of Health, Two Ministries of Social Security and Two Ministries of Education. Then again the UN social agencies (WHO, ILO) are not always espousing the same policy as the UN Department of Economic and Social Affairs; and furthermore the Secretary General’s initiatives such as the Global Compact or the Millennium project may by-pass and sideline the social development policies of the UN’s Department of Economic and Social affairs. Quite apart from conflict between the UN and the Bank and within the UN system, there is also the G8, G20,4 G77,5 and other groupings of countries. While the rich G8 continue implicitly to assume the right to make global policy, the newer G20 is struggling to forge a broader global consensus and the G77 remains more a party of opposition to the northern agendas. The emergence of the alliance of the G4 (China, Brazil, India, South Africa) supported by some other low-income countries, African Union and AfroCarribean countries and Malaysia at the Cancun WTO talks suggests that some of the South may finally be finding a more effective independent voice. Regional groupings of countries also have to be brought into the picture to complete our understanding of the complexity of the situation. Interaction between all of these actors has led to international social policy making becoming stalemated, with the EU, G77 and USA adopting entrenched positions. Significant global institutional reform seems check mated and major global social policy change is difficult to achieve. This is the case notwithstanding the new proposals on institutions and policies by the World Commission on the Social Dimension of Globalisation (ILO, 2004). Because of this institutional and policy impasse, we may be witnessing a shift in the locus and content of global policy debate and activity from those more formally located within the official UN policy-making arenas (whether of ECOSOC6 in New York or in the councils of the ILO and WHO in Geneva) and focussed on UN/Breton Woods institutional reform. Becoming more important are a set of practices and initiatives around Networks, Partnerships and Projects which in some ways bypass these institutions and debates and 440


present new possibilities for actually making global change in particular social policy arenas. Ngaire Woods (Woods, 2002) argues: The global governance debate is focused heavily on the reform and creation of international institutions . . . yet global governance is increasingly being undertaken by a variety of networks, coalitions and informal arrangements which lie a little further beyond the public gaze and the direct control of governments. It is these forms of governance that need sustained and focussed attention to bring to light whose interests they further and to whom they are accountable.

Among examples of these networks, partnerships and projects is the UN Secretary General’s Millennium Project, involving ten task forces to manage the implementation of the Millennium Development Goals. The essence of this emerging networking and partnership form of policy development and practice is the collaboration between stakeholders in the international organisations, the global corporate sector, International Non-Governmental Organisations (INGO’s) and civil society organisations. Such a shift in the locus and substance of global policy making and practice has received support recently from commentators coming from very different intellectual positions. Rischard (2002), The World Bank’s Vice President for Europe in High Noon: Twenty Global Issues and Twenty Years to Solve Them argues that global multilateral institutions are not able to handle global issues on their own, that treaties and conventions are too slow for burning issues, that intergovernmental conferences do not have adequate follow up mechanisms and that the G8-type groupings are too exclusive. Instead, what is needed are Global Issues Networks (GINs):

r involving governments, civil society, and business, r facilitated by a lead multilateral organisation, r that create a rough consensus about the problem to be solved and the task to be achieved,

r that establish norms and practice recommendations, r that report on failing governments and r that encourage good practice through knowledge exchange and a global observatory which feeds a name and shame approach. There is clearly something in these accounts of the way policy making has become projectised and task centred. Indeed this trend has led to some sustained criticism that these initiatives are undermining the more formal multilateral system (Martens, 2003). My own view is that we have to work with such initiatives, while at the same time continuing to put the case for a more effective system of global social governance (Deacon et al., 2003; Deacon, forthcoming) A key question becomes how might some social policy principles of justice and equity guide these tasks and projects. We are back to global social policy, but not a policy to be debated and won in the chambers of the UN or won in intellectual dialogue with Bank experts (though these activities need to continue), but a policy made up on the spot and implemented in practice by those who find themselves on such projects. A global reformist political alliance would then act as a reference point for actors in practice. There is an important caveat or corrective to enter at this point, which unfortunately this paper does not have space to develop in any depth. It is conceivable that, because of 441

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the continued opposition by the world superpower to any kind of strengthening of the UN system and any talk of global taxation and redistribution, an alternative route to a more systematic global governance might need to be looked for. The concept of a strengthened Regionalism with a Social Dimension (Deacon, 2001; Yeates, 2005; Room, 2004) might be such an alternative. It this scenario of regional groupings of countries, each developing not only their own trading arrangements but also their own cross-border policies of cooperation in social and environmental fields, that could constitute the building blocks of a ‘federated’ world of regions. Thus the EU, that anyway ‘offers novel ways of thinking about governance beyond the state’ (Held and McGrew, 2002), would be joined by other regional groupings of countries such as ASEAN7 and SADC8 in a global federation of regions. Such regional groupings might be incorporated as members into, say, the G20 international governance mechanism. This would make the G20 not just representative of particularly large countries in each region, but representative of all the countries in the region. If such a federation of regions were to be developed, international redistribution from richer to poorer countries could be handled on an interregional basis. Global funds allocated on socio-economic criteria of need to some regions would then be allocated by that region to activities and projects within the region, using mechanisms such as those already established by the EU, or else by new mechanisms such as those being experimented with by the Global fund for AIDS/TB/Malaria discussed above. Such a regional approach to a global social policy might also chime with the sentiments of many southern voices who react against a northern-driven global social democracy as strongly as they react against a northern-driven global neo-liberalism (Bello, 2004). It might also embody at a global level the post hegemonic, relativist and multi-cultural global order that might be more acceptable to those who see the global social reformist project as western modernisation. It is to these global political issues and the place of global social policy research in it that we now turn.

G l o b a l s o c i a l re f o r m i s m : re s e a rc h a n d p o l i t i c s How then do intellectuals act in some kind of alliance with global social movements from below in relation to the existing global governance institutions to make progress in the fashioning of a socially just globalisation? What scope for influence might these intellectuals have? The problems of trying to fashion a common interest out of the myriad inter-group conflicts thrown up by globalisation has been usefully rehearsed by Cox (1999) and Gill (2003). Within this broader context, I argued at an UNRISD conference, convened in April 2004, to reflect upon the impact of research on international policy that the moment is ripe to work towards the establishment of a Global Social Policy Research Centre serving a Global Social Policy Observatory and acting as a Global Social Policy Think Tank. Its purpose would be to track, monitor and analyse for effectiveness all the elements of the emerging global policies of social redistribution, regulation and rights. However, as we noted earlier, the argument for attempts to create a socially just ‘capitalist’ globalisation need to be defended against those who might object to a northerndriven agenda of global social redistribution, regulation and rights. Indeed the comments of the discussant (Hopenhayn, 2004) on this proposal encapsulated some of these possible southern criticisms. While welcoming the call for such research and sharing the same political project of a socially just globalisation, coming from a Latin American context he 442


was exercised by the claims of what he saw as ‘this meta narrative’ and ‘all encompassing agenda’ to be set and monitored at a global level. He argued that this left no space for the disparate movements and diverse critiques of globalisation emerging in localities. The basic premise is that we are at a turning point, where the neo-liberal hegemonic model must be countered with a counter-hegemonic project, rooted in the emerging global civil society. Counter-hegemony, however, is not a univocal concept. On the one hand, it may be understood as global thinking that encompasses the United Nations system, a profuse range of non-governmental organisations and academics around the world, connected through crossborder networks and in which the production of knowledge advocates the three ‘musts’ that Deacon has advocated: greater social justice, greater regulation and a global order based on rights. In addition, counter-hegemony is rooted in a set of local actors who may or may not be part of trans-national networks and who construct practices and discourses from the margins and interstices of economics, politics and global culture. These actors undertake actions and send out messages that imply solidaristic and horizontal forms of sociability; denounce the violation of civil, social and cultural rights in different places and nations of the globe; champion the cause of cultural minorities and vulnerable and ethnic groups who are discriminated against; advocate environment preservation; and struggle for fair and egalitarian treatment in terms of gender, community management, local democracy and others. (Hopenhayn, 2004)

The task for UN research, policy analysis and policy dialogue, Hopenhayn argued, must ‘adapt to this emerging idea of bottom–up globalisation where all voices can be heard’. The same kind of criticism of a ‘top–down’ conceptualisation of a global social policy to create a more just globalisation has been articulated recently by Ronaldo Munck: One could argue that this approach reflects the institutional bias of academic social policy that not only privileges state institutions but also as Nicola Yeates notes, it brings into the equation only ‘the more institutionalised sectors of opposition movements’ (Yeates, 2001: 130). There is however a much wider and ‘wilder’ process of contestation going on across the globe in relation to the social impact of globalisation. It is these globalisation from below initiatives that are shaping global social policy every bit as much as the policies of enlightened reformers in the international forums. (2005: 79)

Progress towards the end of fashioning a global regulatory authority and a global process of ironing out social injustice needs therefore not only to be articulated at a global level, but also to engage with and to reflect on the disparate voices of opposition in localities. The suggestion in this paper of a decentred globalisation, involving strong regions, each with their own social dimension, is one possible response to this engagement. The political task that faces us (within which the global and regional social policy research agenda will play one part) is indeed quoting Cox: ‘to bridge the differences among the variety of groups disadvantaged by globalisation so as to bring about a common understanding of the nature and consequences of globalisation, and to devise a common strategy towards subordinating the world economy to a regime of social equity’ (1999: 26). This would seem to require dialogue based on humility and mutual respect between progressive social policy and social development intellectuals North and South (in the context of listening to social movement voices) in order that diversity in culture and experience can be married with a common set of values concerning social justice and rights and converted into a shared international political project to secure a socially just world through some combination of restored and equitable national social 443

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policies, strengthened and effective regional social policies and a measure of global social redistribution, regulation and rights articulation and realisation.

Notes 1 ‘Global social policy’ can be conceptualised in a number of ways reflecting the diverse ways in which the term ‘social policy’ itself has been used. In Deacon (forthcoming) global social policy as redistribution, regulation and rights is but one of several conceptualisations of the term. 2 United Nations Research Institute for Social Development. 3 The G7 (or G8 including Russia) is a self-appointed group of developed countries including USA, Canada, UK, France, Italy, Germany, and Japan. 4 The G20 is a wider group of developed and some middle-income countries established in 1999 by the G7. It is a meeting of Finance Ministers and Central Bank Governors of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi-Arabia, South Africa, Turkey, UK, USA and the EU. Its membership covers 90% of World GDP, 80% of World Trade and 66% of World Population. 5 The G77 was established in June 1964 to represent the interests of developing nations within the UN system. It now has a membership of 132 countries. 6 Economic and Social Council of the UN. It is a large body that was intended to enable the UN to act as overseer of global economic and social policy. Unlike the smaller UN Security Council, it never achieved effectiveness or legitimacy being marginalised by the World Bank and IMF. 7 Association of South East Asian Nations. 8 South African Development Co-operation.

R e f e re n c e s Atkins, A. B. (2004), New Sources for Development Finance, Milton Keynes: Open University Press. Bello, W. (2004), Deglobalization, London: Zed Press. Cox, R.W. (1999), ‘Civil society at the turn of the millennium: prospects for an alternative world order’, Review of International Studies, 25. Deacon, B. (2001), ‘The Social Dimension of Regionalism’, GASPP Occasional Paper No 8, STAKES, Helsinki. Deacon, B. (2004), ‘The politics of global social policy change’, UNRISD Conference, 20–21 April. Deacon, B. (forthcoming), Global Social Policy and Governance, London: Sage. Deacon, B., Hulse, M., and Stubbs, P. (1997), Global Social Policy: International Organisations and the Future of Welfare, London: Sage. Deacon, B., Ollila, E., Koivusalo, M., and Stubbs, P. (2003), Global Social Governance: Themes and Prospects, Helsinki: Finnish Ministry of Foreign Affairs. George, V. and Wilding, P. (2002), Globalization and Human Welfare, Basingstoke: Palgrave. Gill, S. (2003), Power and Resistance in the New World Order, Basingstoke: Palgrave. Held, D. (2004), Global Covenant: The Social Democratic Alternative to the Washington Consensus, Cambridge: Polity Press. Held, D. and McGrew, A. (2002), Governing Globalization, Cambridge: Polity Press. Holland, M. (2002), The European Union and the Third World, Basingstoke: Palgrave. Hopenhayn, M. (2004), ‘Global approaches, dispersed agents: comments on Deacon: the politics of global social policy change’, UNRISD conference, 20–21 April. International Labour Organisation (2004), A Fair Globalisation: Creating Opportunities for All, Geneva: ILO. Lent, A. (2005), Progressive Globalisation, London: Zed Press.

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Martens, J. (2003), The Future of Multilateralism after Monterrey and Johannesburg, Berlin: Friedrich Ebert Foundation. Munck, R. (2005), Globalization and Social Exclusion: A Transformationlist Perspective, Bloomfield, California: Kumarian Press. Ollila, E. (2003), ‘Health-related public–private partnerships and the United Nations’, in B. Deacon, E. Ollila, M. Koivusalo and P. Stubbs (Eds.), Global Social Governance: Themes and Prospects, Helsinki: Finnish Ministry of Foreign Affairs. Patomaki, H. (1999), Democratising Globalisation: The Leverage of the Tobin Tax, London: Zed Press. Patomaki, H. and Teivainen, T. (2004), A Possible World, London: Zed Press. Rieger, E. and Liebfried, S. (2003), Limits to Globalization, Cambridge: Polity. Rischard, J.F. (2002), High Noon: Twenty Global Problems, Twenty Years to Solve Them, Oxford: Perseus Books. Room, G. (2004), ‘Multi-tiered international welfare systems’, in I. Gough and G. Woods (Eds.), Insecurity and Welfare Regimes in Asia, Africa and Latin America, Cambridge: Cambridge University Press. The Global Fund (2003), ‘Guidelines for proposals’, Geneva (http://www.theglobalfund.org 1/04/04). Townsend, P. and Gordon, D. (2002), World Poverty: New Policies to Defeat an Old Enemy, Bristol: Policy Press. Van Riesen, M. (1999), EU: ‘Global Player’: The North-South Policy of the European Union, Utrecht: International Books. Woods, N. (2002), ‘Global; Governance and the Role of Institutions’, in D. Held and A. McGrew (Eds.), Governing Globalization, Cambridge: Polity Press. Yeates, N. (2001), Globalization and Social Policy, London: Sage. Yeates, N. (2005), Globalization and Social Policy: The Regional Dimension, Geneva: UNRISD.

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World Development Vol. 34, No. 10, pp. 1696–1712, 2006 Ó 2006 Elsevier Ltd. All rights reserved 0305-750X/$ - see front matter www.elsevier.com/locate/worlddev

doi:10.1016/j.worlddev.2006.02.001

A Comparative Welfare Regime Approach to Global Social Policy GEOF WOOD and IAN GOUGH University of Bath, UK

*

Summary. — Beginning from the framework of welfare state regimes in rich capitalist countries, this article radically redefines it and applies the new model to regions and countries which experience problematic states as well as imperfect markets. A broader, comparative typology of regimes (welfare state, informal security, insecurity) is proposed, which captures the essential relationships between social and cultural conditions, institutional performance, welfare outcomes, and path dependence. Using this model, different regions of the world (East Asia, South Asia, Latin America, and sub-Saharan Africa) are compared. For many poorer, partially capitalized societies, people’s security relies informally upon various clientelist relationships. Formalizing rights to security via strategies for de-clientelization becomes a stepping stone to protecting people against the insecurity of markets. Ó 2006 Elsevier Ltd. All rights reserved. Key words — Asia, Africa, Latin America, welfare regimes, social policy, insecurity

1. INTRODUCTION In the West and some other advanced capitalist countries, many of the security needs of individuals have come to be provided through formal ‘‘welfare states,’’ embracing a combination of pensions and social protection benefits, social services and labor market regulation. It is of course recognized that such state activities are embedded within financial and other markets and family/household systems; the resulting ensemble usually dubbed ‘‘welfare state regimes.’’ According to an influential conceptual framework, the impact of such regimes can be analyzed in terms of ‘‘de-commodification’’—the extent to which the state sets limits to the treatment of humans as mere commodities within capitalist labor markets. In many poor developing countries, by contrast, both states and markets are sufficiently problematic to the pursuit of livelihoods that people have to rely to a greater extent upon informal relationships. These can be reciprocal within small scale communities, but in the wider society, these relationships are more likely to be hierarchical and thus clientelist, reflecting severe inequalities in the control over resources and institutions (UNDP, 2002).

Of course, such a simple contrast has to be refined. In more successful parts of the developing world, rapid capitalist development has eroded absolute poverty, but frequently at the same time heightened insecurity and vulnerability. Elsewhere, managed development and growth, in parts of East Asia, for example, has improved human welfare. However, we have to recognize new hazards of insecurity (ILO, 2004) and new challenges to well-being, alongside pre-existing ones, in what is essentially still an unregulated global capitalist system. Yet, given this scenario, few attempts have been made to discuss non-western social policy experience in a comparative way. In this paper, we offer a framework and taxonomy for * This paper builds upon a joint project at the University of Bath, integrating the traditions of social policy and development studies into thinking about global social policy. The authors are indebted to their other colleagues on that project: Armando Barrientos, Pip Bevan, Peter Davis, and Graham Room. Their work is referred to in the text. The authors would also like to thank Liz Graveling for her continued editorial support to the outputs of this project. Final revision accepted: February 27, 2006.

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analyzing generic ‘‘welfare regimes’’ under different sets of societal conditions. In the process, we develop a parallel criterion of ‘‘de-clientelization’’ to complement ‘‘de-commodification’’ and to express a continuum of welfare options. In another discourse, familiar to some readers, this could be re-stated as social development (in the sense of enabling autonomy or empowerment) enroute to social policy understood as an acknowledged public system of rights and obligations involving state provision and the regulation of markets. In pursuit of this general argument, we develop a new conceptual framework within which to consider a wider range of institutions than is normally acknowledged in social policy discourses. Notwithstanding the unifying and converging forces of global capitalism, we emphasize the variegated and path-dependent patterns of development or underdevelopment across different zones of the world. This builds a middle-range theory of ‘‘welfare regimes,’’ which opposes both teleological functionalist approaches (as in liberal modernization and Marxist stances) on the one hand, and postmodern approaches emphasizing uniqueness and diversity on the other hand. A distinction between universal goals and context-specific means leads us to reject ‘‘one size fits all’’ policy solutions to poverty eradication, whether from the radical Right (unregulated market capitalism), the radical Left (Basic Income) or the fashionable reformist Center (participation and ‘‘good governance’’). In contrast, we contend that social policies must reflect the particular circumstances of a country or region’s welfare regime. In that sense, they are the outcome of country or region-specific political settlements. Our approach is to identify the essence of social policy principles as they have evolved in the West and ask what adaptations to theory are required to produce a more genuinely global yet comparative framework of analysis. Of course, any comparative analysis has to be sensitive to the history of difference between sets of countries as determined by the era of colonial relations and the corresponding variance in the formation and purpose of public institutions. Even in some areas not formally colonized, the combined and unequal organization of the global political economy has reproduced very different sets of conditions and expectations, with reference to security on the one hand and the respective responsibilities of the state and non-state institutions on the other. 1

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The experience of poorer countries in the South, and now of transitional countries, reminds us of the central contribution of personal and family resources to the universal human need for security. 2 Outside the West, the preoccupation with security is more starkly observed as a fundamental driver of human survival behavior both individually and collectively. It is more starkly observed precisely because the formal institutional frameworks for the provision of security are so precarious and fragile, if not altogether absent. The legitimacy and governance of public institutions are too contested and personalized to guarantee longterm rights to those groups that are in greatest need. As a result, people have to engage in wider strategies of security provision, risk avoidance and uncertainty management. In Doyal and Gough’s (1991) language, the ‘‘need satisfiers’’ are necessarily much more diverse, and certainly not derived only from the state. This is where the knowledge derived from poverty-focused studies in poor countries questions the institutional assumptions of Western social policy. In accepting certain facts about globalization, we are essentially settling for a principle of social capitalism, or mixed economy capitalism. We are also accepting that neither markets, nor states, nor communities alone can provide an adequate framework for meeting human needs (Gough, 2000, Chapter 2). Thus political economies which manage (by default or deliberation) to mix these three institutional domains provide a more sustainable and flexible framework for enhancing human wellbeing. Accepting global reality for the foreseeable future entails that this mix will operate within a framework characterized by extensive private property, in other words a capitalist framework. However, agreeing with Polanyi, capitalism needs to be regulated in order to achieve equitable social objectives and secure welfare outcomes for all. This has been, and continues to be, the major rationale for Western social policy and Western ‘‘welfare states.’’ Yet how well does this apply under conditions of peripheral capitalism, low levels of development and absent or partial commodification? This question represents our key point of departure for analyzing the relationships between the institutional options for poverty eradication in different sets of socio-economic conditions within the global political economy. Five specific principles underpin our wider, comparative framework. First, that states in

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poor countries have problems of legitimacy and that well-functioning labor and financial markets are not pervasive. Second, that these problematic conditions limit the capacity of the state to act in a compensatory way for the inequitable outcomes of the market in highly unequal societies (unequal in both a vertical and horizontal sense). Third, that a comparative conception of social policy has to embrace non-state centered actors. This implies, fourthly, that rights and entitlements may also be found (in some instances, securely) in the informal domains of social relationships and cultural expectations. Some of these domains are more formally organized (churches and mosques, charities, NGOs and philanthropy generally), while others are more personalized in a range of clientelist and reciprocal (perhaps kin) arrangements. Finally, attached to the notion of ‘‘regime’’ is the assumption of path dependency, whereby outcomes from political economy and the deliberate interventions of state and non-state actors reproduce stratification, inequalities and power differences. Within this there is some variation: simple reproduction totally enshrines path dependency, whereas ‘‘extended reproduction’’ introduces possibilities of new mobilizations, identities and solidarities with the potential to alter the regime’s direction. These arguments are developed and defended in the following sections. First, we distinguish welfare regimes from welfare state regimes, and go on to define two new meta-regimes: informal security regimes and insecurity regimes. Second, we provide a theoretical framework to understand and analyze all regime types, and spell out in more detail the community and global dimensions of our approach. Third, we provide empirical evidence to support the regime framework, of two kinds: a large-N cluster analysis to identify different regime types across the world, and summaries of four regional case studies, covering Bangladesh and South Asia, Latin America, East Asia, and Africa. Last, we propose a strategy of de-clientelization as the route to move informal security regimes toward de-commodifying welfare state regimes. This strategy is derived from our central premise that formally guaranteed rights to welfare and employment security, embodied in legitimated states and regulated labor markets, will always be superior to a clientelist, or even reciprocal, system of informal rights which deliver dependent rather than autonomous security. We conclude by re-affirming that position.

2. THE THREE REGIMES In adopting a regime approach we are placing ourselves within the historical-institutional school of social research. This integrates structures and actors within a framework which promises a comparative analysis of socioeconomic systems at different stages of development and different positions in the world system (Giddens, 1971; Gough, 2000, Chapter 2). Similarly it seeks to reconcile the rival ‘‘structural’’ and ‘‘actor’’ approaches within development sociology (Buttel & McMichael, 1994; Long & van der Ploeg, 1994). We recognize that structures are socially constructed, reproduced and changed through the actions of people in real time, but that, at given points in time, actors occupy different interest and power positions within structures, giving them different goals, levels of autonomy and clout. ‘‘Regime’’ refers to a set of rules, institutions and structured interests that constrain individuals through compliance procedures (Krasner, 1983, pp. 1–3; North, 1990, pp. 200–202). Analytically speaking, these rules and norms may be imposed from above using forms of political power, or they may ‘‘emerge informally’’ out of regular face-to-face interaction. Empirically there is an interaction between the two: regimes are always related to issues of power, conflict, domination and accommodation (O’Connor, Orloff, & Shaver, 1999, Chapter 1). Regimes tend to reproduce themselves through time as a result of the way that interests are defined and structured. In situations of rapid change, disruption or crisis regimes can break down, to be replaced by a different regime or by regime competition or by institutional breakdown. In order to use this framework to analyze issues of welfare and security, we modify EspingAndersen’s (1990, 1999) concept of ‘‘welfare state regimes’’ and his analysis of the ‘‘three worlds of welfare capitalism’’ in the West (Gough & Wood et al., 2004; Wood, 2003b). Esping-Andersen’s concept of welfare state regime contains four elements, not entirely congruent. First, it applies to capitalist societies that have been transformed into welfare states, that is, not countries that happen to engage in a bit of social policy on the side, but societies so deeply affected by their non-residual, pervasive social policies that they are best defined as welfare states. 3 Second, the concept denotes the ways in which states, markets and households interact in the provision of welfare: the welfare


state is embedded in a broader ‘‘welfare mix.’’ Third, it identifies a process of de-commodification through state action and measures this as the degree of social protection provided against total dependence on market forces. The OECD countries vary greatly here. Fourth, in these circumstances social policies not only reflect but also reproduce ‘‘stratification’’ outcomes in terms of power, as well as class and other forms of inequality. In this way, social policies shape political divisions and alliances and, usually, reproduce them through time in a path-dependent way. On the basis of the last three dimensions, Esping-Andersen distinguished three welfare state regimes in the OECD world, which he labels liberal, conservative and social democratic. However, we want to probe further the common features underlying all these varieties of welfare state regime. We contend that the following nine elements are integral to the welfare state regime paradigm. 1. The dominant mode of production is capitalist. There is a division of labor based on the ownership or non-ownership of capital; the dominant form of coordination is ex post via market signals; the technological base is dynamic, driven by a never-ending search for profit. 2. A set of class relations is based on this division of labor. The dominant form of inequality derives from exploitation of wage laborers by owners of capital and land. 3. The dominant means of securing livelihoods is via employment in formal labor markets; conversely, the major threats to security stem from interrupted access to labor markets, due to ill health, old age, unemployment or other contingencies. 4. Political mobilization by the working classes and other classes and the ensuing democratic class struggle shape an interclass ‘‘political settlement.’’ 5. There is a relatively autonomous state bounded by the structural power of capital but open to class mobilization and voice and able to take initiatives on its own behalf. 6. These factors, together with inherited institutional structures, shape a set of state institutions and practices which undertake social interventions. This state intervention combines with market and family structures and processes to construct a ‘‘welfare mix.’’ 7. This welfare mix de-commodifies labor to varying degrees (and provides social services as well as investing in human capital).

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8. Together the welfare mix and welfare outcomes influence the definition of interests and the distribution of class power resources which tend to reproduce the welfare regime through time. 9. Within each regime, ‘‘social policy’’ entails intentional action within the public sphere, normally intended to achieve normative, welfare-oriented goals. Each one of these elements must be re-examined when our attention turns from the North to the South. There is no space here to elaborate this in detail; rather the results of our interrogations are summarized in Table 1. The upshot is that, alongside the above welfare state regimes, we identify two other quite different meta-welfare regimes: informal security regimes and insecurity regimes (Gough & Wood et al., 2004, part I). The latter two embrace extensive non-state as well as state institutions in the reproduction of security and insecurity, and acknowledge the wide and varied experience of peripheral capitalism. Informal security regimes describe institutional arrangements where people rely heavily upon community and family relationships to meet their security needs, to greatly varying degrees. These relationships are usually hierarchical and asymmetrical. This results in problematic inclusion or adverse incorporation, whereby poorer people trade some short-term security in return for longer-term vulnerability and dependence. The underlying patron–client relations are then reinforced and can prove extremely resistant to civil society pressures and measures to reform them along welfare state lines. Nevertheless, these relations do comprise a series of informal rights and afford some measure of informal security. Insecurity regimes describe institutional arrangements which generate gross insecurity and block the emergence of stable informal mechanisms to mitigate, let alone rectify, these. These regimes arise in areas of the world where powerful external players interact with weak internal actors to generate conflict and political instability. Insecurity regimes are rarely confined within national boundaries. The unpredictable environment undermines stable patterns of clientelism and informal rights within communities and can destroy household coping mechanisms. In the face of local warlords and other actors, governments cannot play even a vestigial governance and securityenhancing role. The result is a vicious circle of insecurity, vulnerability and suffering for

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WORLD DEVELOPMENT Table 1. The comparative welfare regimes framework Welfare state regime

Informal security regime

Dominant mode of production

Capitalism: technological progress plus exploitation

Dominant social relationship

Exploitation and market inequalities

Dominant source of livelihood

Access to formal labor market

A portfolio of livelihoods

Dominant form of political mobilization

Class coalitions, issue-based political parties and political settlements Relatively autonomous state

Diffuse and particularistic based on ascribed identities: patron–clientelism ‘‘State’’ weakly differentiated from other power systems

Institutional landscape

Welfare mix of market, state and family

Welfare outcomes

Varying degrees of de-commodification plus health and human investment Liberal, conservative and social democratic regimes Countervailing power based on institutional differentiation and positive permeability

Broader institutional responsibility matrix with powerful external influences and extensive negative permeability Insecurity modified by informal rights and adverse incorporation

State form

Path dependent development Nature of social policy

all but a small elite and their enforcers and clients. Thus, we retain the idea of ‘‘welfare regime’’ to refer to repeated systemic arrangements through which people seek livelihood security both for their own lives and for those of their children, descendants, and elders. 4 Substantively, the notion of a welfare regime embodies the relationship between sets of rights on the one hand and the performance of correlative duties on the other. The manner in which that relationship is specified is a product of history, especially a history reflecting the interrelation in different epochs between domestic institutions and the global economy. Those interrela-

Peasant economies within peripheral capitalism: uneven development Variegated: exploitation, exclusion and domination

Less autonomous path dependency with some regime breakdown Less distinct policy due to permeability, contamination and foreign actors

Insecurity regime Predatory capitalism

Variegated forms of oppression, including destruction A portfolio of livelihoods with extensive conflict Diffuse and fluid, including flight

Shadow, collapsed and criminal states with porous, contended borders Precarious: extreme negative permeability and fluidity

Insecurity: intermittently extreme

Political disequilibrium and chaos Absent

tions circumscribe the relative autonomy and legitimacy of the state, and bring a range of non-state actors at global as well as local level into our generalized account of social policy. Thus, for many societies today, rights cannot only be understood in a strict statutory sense; and correlative duties will come, if at all, from domains other than the domestic state. Of course, reality is more complicated than such a classification, in the sense that regions or countries within them can combine elements of all three types within a single social formation. Thus, different categories of a country’s population can experience different primary regimes: some might be successfully incorporated


into state protection; others reliant upon community and family arrangements; and others more excluded from formal or informal mainstream arrangements and reliant upon highly personalized politico-militia patrons, in which a sense of insecurity is prevalent. But within that complexity of hybrids, we are certainly clustering different countries of the world into a primary association with one of these three regime groups. 5 3. THE THEORETICAL FRAMEWORK We derive these broad types of welfare regimes within a theoretical framework presented in Figure 1. It comprises four components: the institutional framework, the institutional responsibility matrix (IRM) or welfare mix, the welfare situation of the population, and the pattern of stratification and mobilization. Let us begin at the bottom right of Figure 1 with the final evaluative principle: the welfare outcomes of the population. These refer to the extent of poverty and other measures of low or inadequate resources, the need-satisfactions of the population (the extent to which their basic and intermediate needs are met), and the insecurity they experience. These welfare outcomes are explained most immediately by the IRM or welfare mix (top right of Figure 1). This is the institutional landscape within which people have to pursue their livelihoods and well-being objectives, referring to the role

of government, community (informal as well as organized, such as NGOs and Community Based Organizations), private sector market activity, and the household in mitigating insecurity and well-being, alongside the role of matching international actors and processes. The welfare mix in turn is greatly shaped by the basic institutional conditions in a country (top left of Figure 1): the pervasiveness and character of markets, the legitimacy of the state, the extent of societal integration, cultural values and the position of the country in the global system. Finally, the stratification system and pattern of political mobilization by elites and other groups (bottom left of Figure 1) is both cause and consequence of the other factors. The stratification system refers to the existing distribution of power in a society and the range of societal inequalities. These shape—but do not determine—the attendant mobilizations of different groups and coalitions. These will frequently reproduce the institutional conditions of the society, but they may act to undermine them and thus alter the welfare mix and patterns of welfare of the country. On the other hand, the welfare mix and welfare outcomes also influence the nature of political mobilizations in the future. Within this framework, two features of the institutional responsibility matrix are especially innovative: the community and global dimensions. In Esping-Andersen’s approach the state is privileged as the key institutional actor— even when its role is to ‘‘roll back the state’’

INSTITUTIONAL CONDITIONS

• • • • • •

Labor markets Financial markets State form: legitimacy and competences Societal integration Culture and values Position in global system

INSTITUTIONAL RESPONSIBILITY MATRIX Domestic Supra-national Domestic governance International organizations, national donors Market Domestic markets Global markets, MNCs Community Civil society, NGOs International NGOs Household Households International household strategies State

STRATIFICATION AND MOBILIZATION: REPRODUCTION CONSEQUENCES • Inequality • Exploitation • Exclusion • Domination • Mobilization of elites • Mobilization of poor

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WELFARE OUTCOMES • • •

Human development (e.g. HDI) Need satisfactions (e.g. MDGs) Subjective well-being

Figure 1. Theoretical framework for comparing welfare regimes.

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as under neo-liberal governments in the 1980s. However, to deal with the different conditions in poorer and transitional countries, we transform his triad of state–market–family into an octagon (see Figure 1, top right box). First, we add a ‘‘community’’ domain to the other three. The notion of community here refers to the multitude of sub-societal organizational forms, including NGOs, and the related notion of civil society. The addition of ‘‘community’’ results in what Wood (2000, 2003a) previously called the ‘‘institutional responsibility square.’’ But here, we add a global dimension, recognizing that poorer, and now transitional, countries have a greater over-reliance in all four domains upon international actors and transfers. This results in a supra-national equivalent of the four domestic components: global markets; donors and other international governmental organizations; international NGOs and other ‘‘voice’’ organizations; and the ‘‘internationalized household’’—trying to avert risk predominantly through migration and remittances. Four further points need to be made about the significance of this simple modification. First, we are explicitly moving on from a legal discourse about rights and entitlements which sees them only existing in a statutory sense with formal sanctions to ensure the fulfillment of correlative duties. Rather we are adding the possibility that for poor people in poor countries, meaningful rights and correlative duties may be found through informal community arrangements. Thus we offer a sociological rather than essentially legal discourse about rights. And we also recognize that rights and correlative duties in all four domains may degrade and break down. This, alas, is the institutional reality for many of the poorest parts of the world whether in sub-Saharan Africa (Bevan, 2004b), or Afghanistan or the West Bank and Gaza. Second, the notion of ‘‘community’’ has to be deconstructed with subtlety. It is not just a reference to small scale, homogenous reciprocity. Rather it represents a wider range of institutional practices between the state and the household involving hierarchy as well as reciprocity, thus inequality and power. It also represents a continuum from immediately local and ascriptive relations (kinship groups, clans, villages, and so on) to wider, more organized and purposive ones (civil society organizations, including non-governmental organizations). In another language, it represents the range of institutional practices from personal networks to more abstract social capital.

Third, the international dimension connects to all four domestic domains. Within poorer countries with high aid dependency as well as reliance upon foreign direct investment and household incomes diversified through migration and remittances, the relationship between informal and formal rights and correlative duties clearly extends beyond the domestic arena; the international dimensions should therefore be included within the welfare regime. In effect the international dimension expands the risk pool within which security is sought and uncertainty managed. Fourth, a crucial feature that the IRM shares in common with welfare regime analysis is that these institutions do not operate independently from the others in terms of rules and pervading moralities. In other words, there is ‘‘permeability.’’ This in turn sets limits to the possibility of one set of institutions counteracting or compensating for the dysfunctional effects of another. It has been familiar to assert that the state can compensate, in distributional terms, for the market. 6 While there is truth to this argument, this truth re-affirms permeability rather than challenges it. So, in developed, politically settled, societies, we might acknowledge a consistency between the publicly espoused principles of fairness, equity, transparency and trust as they operate in all domestic institutions of the IRM. Of course people are selfish and engage, for example, in tax avoidance and cheating, but not to the point of allowing anarchy and chaos to prevail over order. It is as if people know their own predilections for selfishness in their private ‘‘market’’ and ‘‘community’’ domains and deliberately accept the obligations of citizenship enacted through the state domain. They accept the state because they acknowledge their own propensity along with those of others to otherwise free-ride. It is the qualified freedom of much bourgeois political philosophy. The problem arises when permeability functions with the opposite effect and when alternative principles prevail: of privilege; of natural superiority of rights and entitlements; and of selfishness; of private short-term gain; of fission; and of social closure. Here all the domestic components of the IRM exhibit failures. Markets are imperfect, communities clientelist and socially exclusive, 7 households patriarchal and states marketized and/or patrimonial. Under such conditions, how does it make sense to expect the state to disentangle itself from


deep social and political structures and function to compensate for them? As Poulantzas (1969) once put it, ‘‘the state is a condensate of class relations.’’ In this situation all are prisoners. The issue is whether the prison is worth living in or not, and what functions it performs. But do not expect its west wing to ‘‘compensate’’ for its east wing! (Wood, 2000). We return to this issue in the final section. 4. MAPPING WELFARE REGIMES We adopt two methods to empirically ground this analysis. First, Gough (2004c) uses measures of two components of welfare regimes noted above—welfare mix and welfare outcomes—to undertake a simple cluster analysis of a large set of countries outside the OECD area. Second, our collaborators researched and wrote detailed studies of three world regions (Latin America, East Asia, Africa) and one country within South Asia (Bangladesh). We summarize these in turn. The cluster analysis aims to explore cross-national patterns of welfare mixes and welfare outcomes: unlike much regression analysis the

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goal is to reveal patterns of difference as much as relations of similarity. We rely on commonly available data covering all the transitional, underdeveloped and developing countries outside the OECD, though inevitably their validity, reliability and comparability are open to question. To keep the analysis simple, the exercise below uses just two indicators of the welfare mix and one measure of welfare outcomes. The former combines the domestic state, international state and household components of the mix: (1) public spending on health and education as a share of GDP; and (2) the sum of international inflows of aid and remittances as a share of GNP. As an indicator of welfare outcomes we use the widely known HDI. Applying k-means cluster analysis yields four identifiable clusters, shown in Table 2. At a very crude level of interpretation we may label these clusters as follows: (1) Actual or potential welfare state regimes: with high state commitments and relatively high welfare outcomes. This cluster includes much of Central Europe (with some representatives in Eastern Europe); the southern cone of Latin America; Kenya, Algeria and Tunisia in Africa; and Thailand.

Table 2. Cluster analysis of welfare mix and welfare outcomes: toward welfare regimes Final clusters and standardized centers (1) HDI high (.8), Public spending high (.9), International flows low ( .7)

Countries (grouped by world region) Thailand Belarus, Bulgaria, Czech Republic, Hungary, Lithuania, Poland, Slovak Republic, Ukraine, Uzbekistan Algeria, Tunisia Kenya Argentina, Bolivia, Brazil, Chile, Colombia

(2) HDI medium-high (.5), Public spending low ( .6), Indonesia, Philippines, Vietnam International flows low ( .3) Sri Lanka Armenia Iran, Lebanon, Morocco, Syria Dominican Republic, Ecuador El Salvador, Guatemala, Honduras, Paraguay, Peru, Uruguay (3) HDI low ( .9), Public spending low ( .8), International flows medium (0.0)

Cambodia Bangladesh, Nepal, Pakistan Cameroon, Central African Republic, Madagascar, Tanzania, Togo

(4) HDI very low ( 1.4), Public spending low ( .5), International flows high (1.1)

Laos Benin, Burkina Faso, Burundi, Chad, Ethiopia, Ghana, Malawi, Mali, Mozambique, Senegal, Uganda

Number of countries: 61. k-means clustering is used with k = 6 (the other two clusters comprise one country each and are omitted). ANOVA F-score: HDI 60.5, Public spending 42.1, International flows 28.6.

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(2) More effective informal security regimes: with relatively good outcomes achieved with below-average state spending and low international flows. This includes parts of Southeast Asia, Sri Lanka, the remaining countries of Latin America for which we have data, together with parts of the Middle East. (3) Less effective informal security regimes: with poor levels of welfare coupled with low public commitments and moderate international inflows. This cluster comprises South Asia (excluding Sri Lanka) and certain countries in sub-Saharan Africa. (4) Externally dependent insecurity regimes: heavily dependent on aid and/or remittances with very poor welfare outcomes. This comprises the bulk of sub-Saharan Africa as revealed in the available data. More detailed description of regime types in different regions of the world can be summarized as follows. (a) Bangladesh and South Asia In the discussion of the informal security regime above, we recognize that there is a heavy reliance upon the community and family (or broader kin) to meet the need for security. In a historical sense, this reliance is in spite of a British colonial legacy which bequeathed several states in South Asia with recognizable territories and competences. A formal system of law exists, and within India at least liberal democratic practices are also well established. This has produced a welfare regime combination of ‘‘stateness’’ (with relative autonomy—see Alavi, 1972) alongside absent or uneven capitalist development and large scale rural and rising urban poverty. Under these conditions, the state has also been characterized by widespread rent seeking and corruption. But the problem with the community and family locations in the South Asian IRM is that relationships within them are typically hierarchical and asymmetrical, and indeed patriarchal. As Wood has argued elsewhere (2003b), this asymmetry typically results in adverse incorporation (i.e., problematic inclusion rather than social exclusion) in which poorer people trade some short term security in return for longer term vulnerability by adopting forms of client dependence. This reproduces the underlying patron– client relations as a stratification outcome, and functions to disrupt the arrival of civil society pressures to reform such precarious welfare

relationships along welfare state lines. In the meantime this short term security does provide certain informal rights which have more immediate predictability and reliability than formal statutory ones. The characteristics of a South Asian informal security regime within our framework are displayed well in Bangladesh, where the global dimension of the welfare mix is particularly evident through aid and remittances, alongside community level institutions (Davis, 2001, 2004). Welfare outcomes are generally poor and insecurity is endemic. The welfare mix in Bangladesh is much more reliant on family, kinship, community, local government and ‘‘civil society’’ forms of welfare provision, which together establish some informal but nevertheless reasonably stable claims to low level entitlement. In addition, the foreign aid community and other bilateral and global actors, as well as significant flows of external remittance income to a sub-set of families, mediate the welfare mix in critical ways. Aid dependency brings an external discourse about rights and correlative duties into the society, offering the policy objective of a welfare state regime via well governed and targeted state interventions underpinned by a growing economy alongside successful agrarian subsistence. However, that model is difficult to establish or reproduce under conditions of elite capture of aid and continuing economic vulnerability to volatile global markets, in which a new transparent settlement between rights and correlative duties, for example in the garments industry, cannot be realized without losing comparative advantage. This is the contradictory fix for many similar societies. Under such conditions, deep social and political structures continue to define the relationship between rights and correlative duties as highly personalized, segmented, preferential, discretionary and clientelist, as patrons of various kinds 8 intermediate between the needs of poor people (shelter, employment, etc.) and the imperfect institutions in the state and market domains. Patron–clientelism provides some security of welfare, but it comes at the cost of adverse incorporation—individual or collective—which blocks more radical reform and the structuring of domestic interests within a welfare state discourse. Davis (2004) has argued that there is a lack of a citizenship link between the foreign funding of development and social sector programs and their disbursement. 9 Moreover, a key class of potentially active citi-


zens can exit from this domestic regime, either via the purchase of overseas education and health services, or via migration and remittances. All this blocks the emergence of a positive feedback link between citizenship and public welfare provision, characteristic of western welfare states. Instead, the informal security regime prevails, with de-clientelization rather than de-commodification as the prime task of social policy. (b) Latin America Latin America reveals similar patterns of informalization of security but, in the more developed countries at least, this coexists alongside a more extensive sector of state welfare. One reason for this is much earlier decolonization and political independence together with the subsequent emergence of export economies and partial industrialization. This fostered a capitalist class and an urban proletariat alongside the land-owning class and a hard-pressed peasantry, manifesting problems of vertical and horizontal integration. The inter-war global depression brought about a switch from export economies to import substitution strategies. This fostered the emergence of social insurance and employment protection schemes for formal sector workers, endorsed by the state. On this basis, an alliance of industry, public sector workers and urban industrial workers emerged which acted to protect and extend these incipient welfare institutions. As a result, a welfare regime emerged in post-war Latin America, most clearly in the more developed Southern Cone, not unlike that of southern Europe. There were aspirations toward universal access in health and education. Social insurance and employment protection institutions provided a substantial degree of protection against risk for formal sector workers and their dependants. Small wonder that some have characterized the Southern Cone countries as welfare states (Huber, 1996). However, the dualized economy left the mass of informal sector workers (peasants, landless laborers, urban unemployed, and marginal workers) unprotected, reliant on unregulated labor markets, residual public assistance programs and above all their own resources. Throughout the region, household provision and livelihood mixing were important, and the private sector was not clearly distinguished from the public. For this reason, Barrientos (2004) describes this as a combined conservative-informal welfare re-

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gime—with, in southern countries, an incipient conservative-informal welfare state regime. He goes on to argue that this post-war Latin American regime type was substantially transformed during the late 1970s and 1980s as import substitution (increasingly ill-adapted to the liberalization of trade, investment and finance) was replaced by export-oriented growth models as a response to debt crises and the impositions of structural adjustment (Gwynne & Kay, 1999). With such harsh modifications to the economy, corporatist and syndicalist politics gave way to authoritarian political regimes (O’Donnell, 1979). In the face of this combined onslaught, the political constituency of industry, public sector and formal sector workers crumbled. As a result, according to Barrientos (2004), by the 1990s, the welfare regime began to shift to a liberal–informal one. Employment protection withered in the face of labor market deregulation. Social insurance began to be replaced by individual saving and market provision. The private financing and provision of health and education was encouraged. The state origins of protection were weakened, with workers of all kinds more exposed to informal sources of support. Looking to the future, the experience of instability and crisis during the last decade is stimulating the resurgence of political democracy across the region which might offer opportunities for new, perhaps more inclusive, social programs and forms of social development to emerge. Unlike South Asia, there is a tradition of extensive stateinduced social policy to refer back to. (c) East Asia The middle-income countries in East Asia 10 provide a radically different model of combined informal and formal welfare, described as productivist welfare regimes. These regimes are based on dynamic emerging capitalist market economies, which have driven the commodification of labor over many decades under state guided pursuit of economic growth as the main policy goal, with the emergence of marketized social welfare as a corollary. Moreover, they continue to be governed by unified, relatively strong states with substantial steering and infrastructural capacities. They have pursued this developmental agenda with remarkable economic success. In the absence of seriously unequal Latin American-style land and income distribution, attributable in part to post 2nd world war imposed land reform agendas, this

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growth has generated steadily improving welfare outcomes (Gough, 2001, 2004a). The term productivist welfare regime signals that the East Asian countries differ from the types of welfare state regime identified in the West. First, social policy is not an autonomous agent in society or even an autonomous sphere of government; rather it is subordinated to the dominant economic policy goal of maintaining high rates of economic growth. Following on from this, social policy is concentrated on social investment notably in education and basic health rather than social protection. Third, this policy has largely been driven by the imperatives of nation building and regime legitimation. Fourth, the state is mainly confined to regulation rather than provision and plays only a contributory role to the broader welfare mix, which is sustained by strong families and household strategies, high savings and marketized provision and, in Korea, enterprise welfare. However, the sustainability of this regime and the threats to welfare are now open to doubt because of its vulnerability in the East Asian financial crisis of 1997 when the open economies of the region were exposed to short-term inflows of hot money from the US and Japan which financed unsustainable bank lending and investment projects. The ultimate collapse of the Thai baht triggered a currency and banking crisis with major impacts upon incomes, poverty and living standards. As a result, the absence of social protection measures and the lack of social investment in higher education were exposed. The advent of democratization and sustained citizenship campaigns coupled with greater international economic

Welfare State Regimes

exposure has driven the governments of Korea and Taiwan to develop incipient welfare states, albeit of a distinct productivist bent. It remains to be seen whether this sets a pattern for the transformation of the productivist social development regimes elsewhere in the region. (d) Stretching the typology: insecurity regimes Some commentators 11 are prone to divide the world’s 6 billion population into three parts in the ratio 1:4:1. The first billion enjoy the wealth and security of rich developed countries (not to deny poverty within them, but to see it as easily solvable with present institutions); the next 4 billion are improving societies, with poverty declining and social capital slowly transforming informal security; but the final 1 billion will remain as the main target of development aid for at least the first half of the 21st century. This final one billion is significantly concentrated in sub-Saharan Africa, which has been characterized by Bevan (2004b) as a regional insecurity regime with high uncertainty, and clearly representing problems of vertical and horizontal integration. She develops a generic model of ‘‘in/security’’ regimes (Bevan, 2004a) which has more relevance to peripheral, dangerous and powerless zones of the world system, not only in sub-Saharan Africa (see Figure 2). Here the very essence of the nationstate is itself contested, partly as a result of colonial history and post-colonial settlements which transgressed other, competing, primordial loyalties and identities. But these are also zones which are not articulated into the global political economy as national economies, and

Informal Security Regimes

Soc Dem Conservative Liberal English Nordic West/South Europe speaking countries

South Asia Liberal-Informal Latin America

Emerging Productivist Welfare States Korea, Taiwan

Insecurity Regimes

Productivist East Asia

Figure 2. A taxonomy of global welfare regimes.

Sub-Saharan Africa Afghanistan Gaza


which thereby experience highly unregulated market conditions and collusions with foreign capital, mediated by patron, warlord and comprador economic agents. Weak states are therefore open to powerful external forces ranging from the world powers, through external governmental organizations, transnational corporations, international NGOs, to criminal networks. These interact with local patrons to reinforce patronage relationships, resulting either in precarious adverse incorporation and dependence of the population, or the exclusion of groups from any form of livelihood and welfare and their consequent destruction. The result is a combination of predatory capitalism; variegated forms of oppression; inadequate, insecure livelihoods; shadow, collapsed and/or criminal states; diffuse and fluid forms of political mobilization reproducing adverse incorporation and exclusion; and political fluidity if not outright chaos. The outcomes have been deteriorating health, denial of education and rising poverty in many areas. Superimposed on this, in many parts of the subcontinent, the HIV-AIDS pandemic and/or war and civil conflict have generated extreme levels of suffering. The pursuit of secure welfare in these circumstances can presume none of the institutional performance labels, which apply to the other two families of welfare regime. Insecurity regimes thus exhibit a far more tenuous relationship between rights and correlative duties, seeing survival mechanisms as more transient and contingent upon the particular alliances fabricated by power holders. Thus the poor have to adapt continuously, negotiating short term solutions to welfare in the absence of longer term ones. This is a world of unstable and frequently violent fission and fusion in which the pursuit of secure welfare is virtually divorced from any recognizable sense of social policy. Reaching poor people with weakened personal social resources in these circumstances of dysfunctional social capital and weak public goods becomes more of a relief process than even a rehabilitation one. Furthermore, one may question, especially in sub-Saharan Africa, whether the regime label can be confined to the national level. Bevan argues that major areas of Africa resemble more an open field of play for powerful external interests. Many states are ‘‘incoherent’’ in two senses: they are not institutionally differentiated from the societies within which they are embedded, and they lack meaningful territorial bor-

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ders. As a result, the external players intrude into and enmesh with domestic elites in a novel and menacing way. This can enhance the power of the military, criminals and informal elites in ways which establish a perverted form of path dependency. The World Bank and the IMF, recently converted to pro-poor growth, now earnestly wish to reverse this downward spiral, but this entails confronting the results of past international involvements. To summarize this description of sub-Saharan Africa and regions with similar conditions, the strongest test of a regime analysis, there are systemic patterns in the interaction between individuals and institutions. The overwhelming reliance on individuals in households generates gross insecurity and poor levels of need satisfaction. The emergence of stable informal mechanisms at some kind of community level is blocked by the predatory behavior of actors within the state and market corners of the IRM, including internationally. Thus powerful external players interact with weak internal actors to generate conflict and political instability. These regimes spill over national boundaries, which have been weakly constructed in the face of alternatively enduring solidarities and identities, based on ethnicity, language and religion—that is, problematic horizontal integration. Under such conditions, governments cannot play even a vestigial governance and security-enhancing role. The outcome is a vicious circle of insecurity, vulnerability and suffering for all but a small elite and their enforcers and clients. Pockets of social development and African success stories qualify but do not alter this conclusion. Putting together the cluster analysis and regional case studies, we tentatively propose the following taxonomy of welfare regimes across the globe (see Figure 2). 12 5. DE-CLIENTELIZATION We are arguing, from a wider comparative welfare regime perspective, that significant parts of the world are characterized by informal security and insecurity regimes, much more reliant upon unorganized community or organized aspects of civil society. Thus the principal focus for social policy has to shift from de-commodification toward de-clientelization. If informal arrangements within the community are characterized by patron–clientelism, we must then look to de-clientelization as the basis of

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improving the quality of rights and correlative duties. This term is deliberately etymologically constructed as a conceptual alternative to decommodification. It refers to the process of de-linking client dependents from their personalized, arbitrary and discretionary entrapment to persons with intimate power over them. There is a need to dis-establish clientelist forms of representation and provisioning and establishing more formal rights to welfare and security. Institutionalized micro-credit has been a classic widespread attempt at de-linking poor people from rapacious and usurious moneylenders. Mutual assurance societies, cooperatives, trades unions and other civil society forms of mobilization are all contributors to the principle of de-clientalization. In this argument, social movements of empowerment become a precondition for the evolution of a statutory rights-based social policy. 13 The central problem for poor people is whether they can risk such a process of de-clientelization if the alternatives are unknown and uncertain. A policy of de-clientelization can only be ethically contemplated if the processes that achieve this outcome also offer alternative welfare functions, effectively delivered. This is a tall order. What then are the implications of our analysis for social policy in the South? If social policy is the public pursuit of secure welfare, we must first dwell upon the meaning of public action. To circumvent a long history of debate on this subject, we begin with an account of social policy in the West as the product of a dual movement: pressures from below and reforms from above (Gough, 1979, Chapter 1). We consider each in turn before considering the implications for social reforms in development contexts. It is no coincidence that welfare state regimes in western industrial societies evolved alongside the proletarianization of labor. As we learn from Marx, mature capitalism brings about the social conditions under which alienation becomes a shared experience and labor can be organized to confront or remedy that alienation. Thus the forms of public action that brought about the ‘‘welfare state’’ included struggles of the increasingly organized labor movement. In many northern European countries, these developments were linked to a range of other class mobilizations, notably by agricultural workers and later the ‘‘service class,’’ other social movements (such as the temperance movement in Scandinavia), and self-help institutions,

such as Friendly Societies in Britain. Thus concessions were progressively wrung from the bourgeois state through public action. On the other hand, social policies have also been introduced from the top down by farsighted elites exhibiting ‘‘enlightened self-interest,’’ recognizing the various ‘‘functions’’ that social policies can perform and their beneficial results for accumulation, legitimacy and stability to pursue their own interests. ‘‘Stable inequality’’ (Tilly, 1999) can only be achieved if poverty is somehow managed either through meaningful chances of upward mobility or through moderated exploitation. This is also the ‘‘public goods’’ argument for social reform, whether public health measures to control epidemics, social programs (alongside social control) to prevent runaway crime and physical insecurity, schooling for skills and citizenship, or housing and town planning to counter the social costs of unplanned urbanization. ‘‘Concessionary capitalism’’ tends to formalize some public goods as social rights in order for stable inequality to persist. What are the chances of similar mechanisms taking hold in the South and transforming informal into formal welfare regimes? First, can we expect serious, sustained and effective bottom-up pressure from organized labor? Outside a few areas, no; so we have to search for public action in other quarters. How then do we assess the claims made across the world for a civil society alternative? We certainly need to be wary of much rhetoric from the official bilateral agencies and the international financial institutions. In this rhetoric, the good governance agenda is combined with optimism about participatory social action as the means to improve public institutional performance, poverty-focused policy implementation, and community based social development. Yet, there is some contrast of judgment between gloomy academics on the one hand (Cooke & Kothari, 2001; Wood, 2000) and the evidence of widespread NGO/Civil Society movements operating at local, national and global levels with increasing sophistication as lobbyists and pressure groups on the other hand. The ‘‘de Tocqueville’’ understanding of civil society as critical and independent, able to exert restraining pressure upon the state (Davis & McGregor, 2000), confronts the hegemonic pessimists. 14 At the same time, the preoccupation with hegemony overlooks the many small gains made by civil society action, social movements and collective action. With some


finite exceptions, states cannot rule for long by coercion alone. Concessions to struggle are made, rights do get extended, policies do get changed, reforms do happen. Perhaps the hegemonic pessimists have simply been too impatient and have not attributed enough significance to small victories. In examining the hegemonic implications of authoritative labeling, Wood (1985) also points out that ‘‘targets strike back.’’ In other words, the ways in which the state might seek to organize and reorganize its population for convenient, limited policy concessions can itself produce new solidarities and social bases for critical social action—a process of extended, or dynamic reproduction. One way or another, the achievement has been to organize solidarities outside the category of organized labor. Post-class analysis has drawn our attention to these possibilities as identities and interest groups outside the historic capital–labor confrontation have emerged as significant. This has been reinforced by the evidence from transforming, recently agrarian, societies where peasants, quasi peasants, tenants, landless agricultural labor, informal sector workers, migrants, and women from these categories have been mobilized in the ‘‘reformist’’ era following the great ‘‘peasant’’ revolutions associated with Russia, China, Mexico, Vietnam inter alia (Webster & Engberg-Pedersen, 2002). Turning to top-down reforms, elites in the South typically have contradictory relationships to the state. Some are definitely part of the problem of the state, while others lament its irresponsibility. From experience in South Asia and Latin America, it is clear that even well connected elites have insufficient trust in the state to commit to it wholeheartedly. Typically, a desire for public goods coexists with an unwillingness to collectively invest in them, resulting in widespread tax avoidance and evasion. It also results in public squalor alongside private—and privately protected—wealth. A social policy agenda in poor countries has to include converting the elite’s objective interest in, and frequent desire for, public goods into the corresponding public action to deliver them. In other words it needs to pursue a regime change, in which the elite’s correlative duties are expanded in response to the rights claimed by others. In a nutshell, the transformation of informal security regimes into welfare state re-

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gimes entails a subtle and complex process of de-clientelization. Finally, the transformation of insecurity regimes into even informal security regimes requires more basic preconditions: stable, legitimate states with some minimal jurisdiction over their territories; international curbs on the actions of threatening outside actors and regulation of global markets; and moves to enhance civil society and norms of governance. Some of this agenda is now embraced by the World Bank and aid agencies, but as Gore (2000) argues, this paradigm is contradictory and thus naı¨ve. The discourse of normative standards at the international level (such as the Millennium Goals) does not displace the responsibilities of national governments. Yet the severe and intensifying international constraints on nation states are barely recognized. If, however, as we argue, international factors and actors must be fully integrated into the analysis, then the prospects for countries in unstable zones to improve on their insecurity regimes are dependent on changes in the global architecture of nations and institutions. 6. CONCLUSION Our argument implies a moral hierarchy of regime types on a continuum from ‘‘insecurity’’ to ‘‘informal insecurity’’ to ‘‘formal security.’’ There can be no doubt that such a formulation poses a theoretical dilemma. Are we simply repeating a liberal modernization mantra and in effect unfavorably contrasting traditional with modern social arrangements? Not really. On the one hand, we have indicated that we are sensitive to history, colonialism and neocolonialism, and persistent conditions of unequal exchange in the global political economy. We are acknowledging path dependency and not assuming that globalization reproduces a homogeneity of modern social systems. On the other hand, we do claim that the ‘‘formal security’’ of welfare (in the sense of individual, guaranteed, non-personal and justiciable rights independent of birth, wealth, gender, status or other ascribed characteristics) is the most satisfactory way of meeting universal human needs including those for security. That condition must be better for most people than either the clientelist, though partially protected, conditions of ‘‘informal security,’’ and certainly

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better than the persistent instability and violence of ‘‘insecurity’’ regime types. Yet we are not suggesting a global program of catching up. We are not suggesting for the foreseeable future (i.e., at least during the lifetime of the Millennium Development Goals) that the welfare regimes of poor countries can somehow be transformed into the welfare state ones of the West, or even that this would be desirable. That would be to deny path dependency and to be insensitive to the different historical ways in which societies and geographic zones are represented within globalization, and as a result are able to construct different welfare mixes. Improvements toward formal security have to be judged in each situation according to its particular circumstances, and we have to be realistic rather than utopian.

This middle-range regime approach enables us to retain a universalism about ends while being relativist about means. 15 This relativism essentially reflects the basic ways in which poverty needs to be understood in different sets of societies, leading to the conceptual basis for defining appropriate security of welfare, and the institutional room for maneuver in any meaningful time frame. This relativism certainly requires us to box more clever in considering the repertoire of social policy initiatives by a wider range of actors in the public domain, not confined to the state. This is the basic contrast with Western social policy. The relationships between rights and correlative duties have to be sought more subtly and supported in ways which do not presume the absolute authority of the state and which respect the sustainable contribution of other agencies.

NOTES 1. Compare with Therborn (1992) on the four paths to modernity.

8. Urban broker patrons or ‘‘touts’’ are known in Bengali as mastaan.

2. Wood (2001) would offer ‘‘security’’ alongside Doyal and Gough’s (1991) ‘‘autonomy’’ and ‘‘health’’ as a universal human need. For them, childhood security, physical and economic security are intermediate needs contributing to these basic needs.

9. This has long been argued by nationalists in Bangladesh. They consider that the high dependence on aid has weakened voice and civil society development in the country.

3. This feature poses immediate problems for the biggest developed country of all—the United States— where 45 million people lack health insurance and two million people, mostly poor and black, are in prison. Is this a welfare state or a ‘‘carceral state’’? 4. See Collard (2000) for an analysis of the intergenerational bargain. 5. This method resembles an Althusserian Marxist approach which conceives of a social formation embracing several co-existing modes of production, but identifies the formation with the dominant mode of production in a particular epoch (Brenner, 1977). 6. Indeed, it is this Polanyian assumption which underpins the de-commodification basis of EspingAndersen’s welfare state regime approach. 7. And of course, racially, ethnically and linguistically too—the problem of horizontal integration.

10. With the exception of the Philippines and excluding consideration of China. 11. For example, Paul Collier (at the Centre for the Study of African Economies, University of Oxford, and recently Director of the Development Research Group at the World Bank) argued in these terms at a seminar at St. Anthony’s, Oxford, in October 2003. 12. But this excludes the Middle East and North Africa and some other sub-regions of the world. 13. This could be understood as a bottom-up process of realizing an Hegelian objective of political order, seeking to overcome problems of vertical and horizontal integration as the precondition for rights-based welfare. 14. For example: Gramscian arguments about civil society incorporated into the state’s project; in the 1970s, Althusser’s ‘‘ideological state apparatuses’’; and the critical theory of Habermas, Marcuse and others associated with the Frankfurt School.

A COMPARATIVE WELFARE REGIME APPROACH TO GLOBAL SOCIAL POLICY 15. In the contemporary world, Gough (2004b) has recently argued, the opposite pertains, due to the combined influence of post-modern denials of universal conceptions of human well-being and one-size-fits-all

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policy recommendations by global agencies. ‘‘In this topsy-turvy world, core values and needs are relative and local, while means and policies are global and universal’’ (p. 291).

REFERENCES Alavi, H. (1972). The state in post-colonial societies: Pakistan and Bangladesh. New Left Review, 74(July– August), 59–81. Barrientos, A. (2004). Latin America: Towards a liberalinformal welfare regime. In I. R. Gough & G. D. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 121–168). Cambridge: Cambridge University Press. Bevan, P. (2004a). Conceptualising in/security regimes. In I. Gough & G. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 88–118). Cambridge: Cambridge University Press. Bevan, P. (2004b). The dynamics of Africa’s in/security regimes. In I. Gough & G. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 202–252). Cambridge: Cambridge University Press. Brenner, R. (1977). The origins of capitalist development: a critique of neo-Smithian Marxism. New Left Review, 104(July–August), 24–92. Buttel, F., & McMichael, P. (1994). Reconsidering the explanandum and scope of development studies: towards a comparative sociology of state–economy relations. In D. Booth (Ed.), Rethinking social development (pp. 42–61). Harlow: Longman. Collard, D. (2000). Generational transfers and the generational bargain. Journal of International Development, 12(4), 453–462. Cooke, B., & Kothari, U. (Eds.) (2001). Participation: The new tyranny? London: Zed Books. Davis, P. (2001). Rethinking the welfare regime approach: the case of Bangladesh. Global Social Policy, 1(1), 79–107. Davis, P. (2004). Rethinking the welfare regime approach in the context of Bangladesh. In I. Gough & G. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 255–286). Cambridge University Press, Cambridge. Davis, P., & McGregor, J. (2000). Civil society, international donors and poverty in Bangladesh. Commonwealth and Comparative Politics, 38(1), 47–64. Doyal, L., & Gough, I. (1991). A theory of human need. Basingstoke and London: MacMillan. Esping-Andersen, G. (1990). The three worlds of welfare capitalism. Cambridge and Oxford: Polity Press.

Esping-Andersen, G. (1999). Social foundations of postindustrial economies. Oxford: Oxford University Press. Giddens, A. (1971). Capitalism and modern social theory. Cambridge: Cambridge University Press. Gore, C. (2000). The rise and fall of the Washington consensus. World Development, 28(5), 789–804. Gough, I. (1979). The political economy of the welfare state. London: Macmillan. Gough, I. (2000). Global, capital human needs and social policies. Basingstoke: Palgrave MacMillan. Gough, I. (2001). Globalization and regional welfare regimes: the East Asian case. Global Social Policy, 1(2), 163–189. Gough, I. (2004a). East Asia: the limits of productivist regimes. In I. Gough & G. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 169–201). Cambridge University Press, Cambridge. Gough, I. (2004b). Human well-being and social structures: relating the universal and the local. Global Social Policy, 4(3), 289–311. Gough, I. (2004c). Welfare regimes in development contexts: a global and regional analysis. In I. Gough & G. Wood with A. Barrientos, P. Bevan, P. Davis, & G. Room, Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts (pp. 15–48). Cambridge: Cambridge University Press. Gough, I. & Wood, G. with Barrientos, A., Bevan, P., Davis, P., & Room, G. (2004). Insecurity and welfare regimes in Asia, Africa and Latin America: Social policy in development contexts. Cambridge: Cambridge University Press. Gwynne, R., & Kay, C. (Eds.) (1999). Latin America transformed: Globalisation and modernity. London: Edward Arnold. Huber, E. (1996). Options for social policy in Latin America: neoliberal versus social democratic models. In G. Esping-Andersen (Ed.), Welfare states in transition: National adaptations in global economies (pp. 141–191). London: Sage. ILO (2004). Economic security for a better world. Geneva: International Labour Organization, SocioEconomic Security Programme. Krasner, S. (1983). International regimes. Ithaca: Cornell University Press. Long, N., & van der Ploeg, J. (1994). Heterogeneity, actor and structure: towards a reconstitution of the concept of structure. In D. Booth (Ed.), Rethinking social development (pp. 62–89). Harlow: Longman.

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North, D. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press. O’Connor, J., Orloff, A. S., & Shaver, S. (1999). States, markets, families: Gender, liberalism and social policy in Australia, Canada, Great Britain and the United States. Cambridge: Cambridge University Press. O’Donnell, G. (1979). Modernization and bureaucraticauthoritarianism: Studies in South American politics. Berkeley: Institute for International Studies. Poulantzas, N. (1969). The problem of the capitalist state. New Left Review, 58(November–December), 67–78. Therborn, G. (1992). The right to vote and the four world routes to/through modernity. In R. Thorstendahl (Ed.), State theory and state history (pp. 62–92). London: Sage. Tilly, C. (1999). Durable inequality. London and Los Angeles: University of California Press. UNDP (2002). Human development report 2002. Oxford: Oxford University Press.

Webster, N., & Engberg-Pedersen, L. (Eds.) (2002). In the name of the poor: Contesting political space for poverty reduction. London and New York: Zed Books. Wood, G. (1985). The politics of development policy labelling. Development and Change, 16(3), 347– 373. Wood, G. (2000). Prisoners and escapees: Improving the institutional responsibility square in Bangladesh. Public Administration and Development, 20(3), 221–237. Wood, G. (2001). Desperately seeking security. Journal of International Development, 13(5), 523–534. Wood, G. (2003a). Governance and the common man. In P. Mosley, & E. Dowler (Eds.), Poverty and social exclusion in North and South: Essays on social policy and global poverty reduction (pp. 83–121). London and New York: Routledge. Wood, G. (2003b). Staying secure, staying poor: the Faustian bargain. World Development, 31(3), 455–471.

Social Policy & Society 4:2, 227–234 Printed in the United Kingdom C 2005 Cambridge University Press doi:10.1017/S1474746404002350

A Global Political Economy of Care N i c o l a Ye a t e s School of Sociology and Social Policy Queen’s University, Belfast E-mail: [email protected]

Care is an important analytical concept in social policy because of what its social organisation reveals about social formations and the nature of welfare states. To date, social policy analyses of care have focused on the social (re)organisation of care within nation states, which are largely treated as ‘sealed’ entities. Consequently these analyses neglect to examine the impact of transnational processes on the socio-organisational shifts observed. This article outlines the contours of a global political economy (GPE) of care with a view to elucidating the transnational dimensions to care restructuring. It focuses in particular on domestic care labour because of the extensive internationalisation of domestic services and its significance for the social relations of production and the division of labour. The discussion reflects on analytical issues for the academic study of social policy and care raised by a GPE approach.

I n t ro d u c t i o n The concept of ‘care’ occupies an important position in social policy analysis because of what its social organisation reveals about social formations and the nature of welfare states as well as about changes to these socio-institutional arrangements (Williams, 2003). Care connects the micro and macro dimensions of our lives and embeds personal practices within the context of social structures and social relations. Social policy analyses of care have been largely informed by sociology, but ‘care studies’ is a multi-disciplinary field of enquiry to which political science and economics (particularly feminist perspectives in each) have also made significant contributions. Drawing on insights from these disciplines, particularly from political economy perspectives, this article examines the relationship between social policy and care. More particularly, it examines this subject from a global political economy (GPE) perspective since my focus of analysis lies with the transnational dimension of social policy and the global structures of power and inequality that bear on ‘national’ processes of socio-institutional reorganisation. The discussion begins in the first section by briefly reviewing the strengths and limitations of social policy analyses of, and political economy approaches to, care. It then proceeds in the second section to outline the contours of a GPE analysis of care. The global care services economy extends across a wide range of care services but my focus here lies with domestic care services because of their special significance for the social relations of production and the social division of labour. The final section reflects upon the implications of this discussion for care studies and social policy analyses more generally. 227

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S o c i a l p o l i c y, p o l i t i c a l e c o n o m y a n d c a re Contrasting with psychological approaches to care-giving that emphasise individual motivations, emotional attachments and identities of care-givers, a prominent stream of social policy analysis conceptualises care-giving as labour, be this physical labour involved in ‘caring for’ another or emotional labour involved in ‘caring about’ another (Hooyman and Gonyea, 1995). Care labour can accommodate an incredibly wide range of social reproduction activities, ranging from highly intimate social, health and sexual care services to less intimate ones such as cooking, cleaning, ironing and general maintenance work offered on a waged and/or non-waged basis in domestic and/or institutional settings. Because of this diversity, a more restrictive meaning of care is used in social policy, referring to ‘custodial or maintenance help or services, rendered for the well-being of individuals who cannot perform such activities themselves’ (Waerness, 1985, in Hooyman and Gonyea, 1995: 3, emphasis added), typically ill, disabled, elderly and young people (Daly, 2002). Even then, the care services sector is highly diverse, embracing a range of groups with different ‘skill’ levels/occupational positions, working in different settings and under different conditions (Yeates, 2004). A particular preoccupation of feminist analyses is the conditions under which unpaid care labour is provided. Questions such as who provides care, how much of it, to whose benefit and whose cost have been central to linking ‘private’, household-level arrangements with wider social relations between men and women and emphasising the mediating role of welfare institutional arrangements. These analyses have contributed important insights into the ideological and material bases to the prescription of gender roles, the ethical relations underpinning social relationships and public policy, and the range and nature of benefits and services for those in need of care and for those providing care (Daly, 2002). Feminist scholars have typically emphasised the close relationship between non-waged and waged labour: the work women undertake for wages outside the home often mirrors that which they undertake within it; women’s provision of unpaid care labour subsidises public expenditure savings; and because the provision of this labour negatively impacts on their availability for paid work it also shapes their share of the social wage and long-term socio-economic security (Pascall, 1997). It is, however, Marxian analyses that are most explicit about situating unpaid care labour within the gendered social relations of production, emphasising household reproductive labour as a basic input into capitalist production processes and the importance of social policy in maintaining gendered household relations underpinning the production of surplus and its unequal division (Mies, 1986; Delphy and Leonard, 1984). It is this insistence on care as labour, the strong connections between productive and reproductive labour and gendered social relations of welfare that have particular resonance for political economy analyses of the welfare state. ‘Critical’ political economy has, however, largely been silent on these matters, focusing instead on patterns of social (class) conflict and cooperation between state, businesses and organised (male) waged labour as played out in the welfare arena. This is not to deny the existence of a ‘dialogue’ between political economy analyses of welfare states and feminist analyses; these exchanges have most recently been rehearsed in the welfare regimes literature subsequent to Esping-Andersen’s (1990) ‘three worlds of welfare’ thesis that is charged with having seriously failed to attend to the gendered social relations of welfare. 228

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There is an important element missing from both feminist and political economy analyses of the social relations of welfare. Both have developed and been applied in the context of national settings, neglecting processes that cut across state borders and that need to be understood with reference to ‘external’ socio-political contexts. Indeed, developments such as the internationalisation strategies of social and health care corporations, the cross-border supply of care services and the consumption of care services abroad and their implications for the social relations of distribution and redistribution are only now beginning to be addressed within academic social policy. Although ‘care studies’ is fully conversant with the importance of domestic care economies and the divisions of paid and unpaid care work in the context of different national settings it has paid little attention to either the existence of an international division of reproductive labour and the repositioning of countries within it or to the ways in which transnational processes intersect with ‘internal’ social policies to mediate gendered social relations of care within national settings. Although otherwise cognisant of the international context of ‘national’ social relations, GPE approaches to welfare restructuring (Blackburn, 2002; Navarro, 1982, 1998) pay little or no heed to the gender dimensions of the changing social relations of welfare. In 1992 Pettman commented that mainstream G/IPE models, be they liberal, nationalist or structural, ‘ignore the vast amount of women’s labour – in domestic and subsistence production, in reproduction and community care . . . gender relations as power relations are not pursued’ (pp. 158, 160). A decade later, Peterson, otherwise noting the critical vantage points of ‘critical’ political economy models to understanding changes in the organisation of production, global divisions of labour, accumulation and regulation dynamics, and class and geopolitical hierarchies, similarly emphasised their continued ‘deafening silence’ on gender (2003: 26, 179, fn 16). Notwithstanding these limitations, feminist GPE and social policy are best suited to advancing an appreciation of the global social relations of care. The following section accordingly fleshes out the broad form and characteristics that a feminist global political economy approach to welfare might take. Given the word constraints, I do little more than outline the broad contours of a global political economy of domestic care to illustrate some connections between global hierarchies, the (re)organisation of production and social policy.

C o n t o u r s o f t h e g l o b a l d o m e s t i c c a re re g i m e Although care services are predominantly financed, organised and provided on a local basis, internationalisation strategies of households, corporations and states have created a buoyant international care services economy. Central to this economy lies domestic labour. Underpinned by a massive and increasing demand for migrant domestic workers throughout wealthier countries of the world and a supply of them by less wealthy ones, this global ‘labour intimacy regime’ (Chang and Ling, 2000) entails massive international transfers of ‘motherly’ care labour and, for some, signifies the establishment of a ‘post˜ 2000). Conceptualised industrial household structure with pre-industrial values’ (Parrenas, by Hochschild as ‘global care chains’ these transfers typically entail ‘an older daughter from a poor family who cares for her siblings while her mother works as a nanny caring for the children of a migrating nanny who, in turn cares for the child of a family in a rich country’ (2000: 131). Not only do these transfers establish ‘personal links between people across the globe based on the paid or unpaid work of caring’, particularly between the 229

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children of service providers and those of service consumers (Hochschild, 2000: 131), they also link economic and welfare systems of different levels of ‘development’ and countries occupying different positions in the international political economy (Yeates, 2004). This transnational trade in domestic care labour is an important aspect of international and regional divisions of labour. Thus, young women from poorer Asian countries typically travel to richer countries of Asia, the Middle East, Europe and the US to work in various branches of the international care service economy (Heyzer et al., 1994; Chang and Ling, 2000). Young women from Mexico and Central and South American countries travel to the US, and those from Central and Eastern Europe travel to Western Europe and the US do similarly. Insofar as overseas work allows them to improve their living conditions and provide for the welfare of relatives remaining at home, this trade and the divisions of labour it embodies is integral to welfare financing, organisation and provision. This international trade in care labour reflects a basic inequality of access to material resources arising from uneven development globally, but it reinforces these inequalities by redistributing care resources from those in poorer countries for consumption by those in richer ones. As Hochschild argues, the labour involved in caring for children of parents further down the global care chain is displaced on to children of parents living further up it. At one level, global care chains can be regarded as a trade mechanism for importing/ exporting care labour; however, they embody social relations of exploitation insofar as they extract physical care labour from poorer countries for consumption by richer ones. In so doing they generate ‘emotional surplus value’: the US’ import of maternal love is resulting in the ‘Beverly Hills child getting “surplus” love’ (Hochschild, 2000: 136). Of course, neither the outsourcing of household tasks nor the transnational domestic service economy are without historical precedent (Katzman, 1978). A substantial transnational domestic service economy can be dated back to (at least) the nineteenth century when this economy contributed to industrialisation processes in labour exporting and labour importing countries in ways characteristic of the contemporary industrialisation strategies of certain Asian countries (Chin, 1998; Huang and Yeoh, 1996). Furthermore, in the US and Europe, domestic service has long been a key source of employment for immigrant women, while the employment of domestic servants constituted an important means through which social relations – particularly those that relate to lifestyle and status – are expressed and reproduced (Katzman, 1978; Anderson, 1997, 2001). While there are historical continuities in the development of this economy, there are also important disjunctures. New are the corporatisation of service provision and the spread of the domestic services market outside elite sections of society. The corporate care industry is a major area of economic growth and employment generation (especially for women) in many advanced industrialised and newly industrialising countries. In the US, for example, home cleaning is amongst the fastest-growing areas of the care services sector, and ‘house cleaning professionals’ are still strongly drawn from immigrants and ethnic minority groups (Ehrenreich, 2002). It is difficult to quantify the number of domestic workers because the work they do is often undeclared by employers and employees, but available figures hint at their importance. Migrant domestic workers in Spain, Germany and France number over two million and the demand for such work is rising. In Britain, household spending on paid domestic labour quadrupled over the space of a decade (1986–96) and the number of people employed as domestic workers increased by 17 per cent during the 230


late 1990s when average growth in employment was just 3 per cent (Anderson, 2001; Cox, 2000; Gregson and Lowe, 1994). Social policies are deeply implicated in these commodification and internationalisation processes. Ehrenreich (2002) draws attention to how in the US domestic care corporations recruit labour by plugging into state welfare-to-work programmes, whose embodiment of the ‘work first’ principle renders them a source of cheap, available labour. Thus, although social policy has long been implicated in sustaining the supply of unpaid social reproductive labour, it is now also facilitating the outsourcing of (at least some of) that labour by households, and women’s entry into paid employment. In Europe, the spread of welfare-to-work programmes and public subsidies for paid domestic labour is expected to stimulate households to outsource personal services. The Danish Home Service Scheme, for example, subsidises companies providing domestic services (e.g. shopping, cooking, cleaning, gardening, collecting children from school) that customers could otherwise perform themselves in, or in close connection to, their home Platzer (n.d.). Cancedda (2001) estimates the potential for the commercialisation of household services in the EU to generate up to a million personal services jobs. The international trade in domestic services must be placed in the context of greater population movements generally and the feminised nature of contemporary international migration in particular that is in part a response to the problem of uneven development. Social policies of the IMF and WB may require governments to spend more on debt repayments than on social services provision and they support policy reforms promoting the ‘free’ market economy that erodes livelihoods, suppresses wages, devalues currencies and promotes export-oriented development. This, together with the fact that countries may have little else to sell on the world market but labour, means that the export of female labour is central to the international politics of debt. Through the income generated from work abroad, household internationalisation strategies are often key to the economic survival of the households concerned and to the welfare of individual members therein and the communities in which they live. International remittances are, moreover, one of the few means for some states to generate foreign currency, and for poorer labourexporting countries they may exceed the value of exports and official aid (Faini, 2002; Orozco, 2001). Not surprisingly, then, international export of female labour is explicitly sponsored or tacitly condoned by many governments. While not all migrants set out to provide care services abroad, many of them may end up doing so with the encouragement of the policies and practices of state and non-state entities operating in a host of ways and with various shades of il/legality (Stalker, 2000). It remains to be seen how far this outsourcing of social reproductive work extends. Platzer (n.d.) suggests that home cleaning accounts for most services provided under the Danish scheme, and that intimate personal care needs remain overwhelmingly provided for by families and public services. In the US, despite the growth of commercial care services, public and informal providers remain a major source of less- and nonprofitable, social and custodial services that are essential to the long-term maintenance of dependent, low-income populations (Hooyman and Gonyea, 1995). It also remains to be seen whether this outsourcing prompts greater gender equity in the division of social reproductive labour. Many are sceptical. As Anderson (1997, 2000) points out, although the purchase of domestic labour serves the purpose of relieving women from doing the ‘double burden’ of performing the bulk of unpaid work as well as holding down a fulltime job it helps avoid gender (and generational) conflicts over the unequal division of 231

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social reproductive labour. In labour-exporting countries the emigration of the primary care-giver usually prompts the use of substitute female family labour or women recruited from poorer regions within the country and who are themselves too poor to emigrate ˜ (Parrenas, 2000). Social relations of inequality and labour exploitation among women are key features of this re-organised division of social reproductive labour. The sub-contracting of domestic care labour to migrant women in particular requires attention to ‘race’ and class divisions among women as well as social relations between men and women. Thus, employers reportedly express a preference for domestic care workers with (assumed or real) behavioural, cultural, linguistic or religious traits thought to bear on the service provided, and in practice this often entails preference for migrant workers. This preference for migrant workers cannot simply be reduced to labour cost issues; it must also be explained in terms of the control of labour. The option to leave an abusive employer is restricted by the reliance of the migrant worker’s family on the remittances she sends home, by the fact that domestic work in households is often the only alternative to sex work and by the worker’s precarious legal status (Anderson, 1997, 2001). On this latter point, the dependence of poor states on international remittances compounds migrant workers’ vulnerability abroad as their embassies’ concern with maintaining ‘national’ trade and aid interests may override their obligation to protect their nationals’ human rights (Pettman, 1992). Overall, this use of female migrant labour does not indicate that a ‘new’ sexual division of labour – either national or international – has emerged from the ashes of the old one; rather, it has built on the existing one, including local patriarchal social and welfare structures, with the effects disproportionately borne by women migrating from poor countries to serve women, men and children in richer ones.

Rethinking social policy and global political economy Whatever one’s position in the ‘globalisation’ debate, there is no denying that contemporary social structures require us to reflect on how people and institutions are entangled in trans-territorial processes and attend to the connections between the global, national and sub-national spheres. The now-extensive international market in domestic care services suggests that care studies specifically, and social policy analysis more generally, must integrate the transnational dimensions to, and the international context of, the social (re)organisation of care into their conceptual and theoretical frameworks. These academic fields of study are already familiar with the marketisation and commodification of social reproductive labour, but they must also attend to the transnational dimensions of these processes. The treatment of ‘national’ care regimes as enclosed entities, decontextualised from the global political economy in which they are embedded is no longer justifiable, if it ever was. Unequal relations within households similarly have to be situated within an international division of reproductive labour that is structured by social class, ‘race’/ethnicity as well as by gender inequalities. The ‘global care chain’ concept (Hochschild, 2000) offers an important route into this terrain, capturing as it does care service economies linking the social organisation and reorganisation of care across countries of different levels of ‘development’ and unequal position in global and world-regional hierarchies. The concept’s emphasis on household internationalisation strategies and international sub-contracting networks, that were formerly analysed only in relation to the emergence of global production systems, is a 232


useful way of capturing the global social organisation and re-organisation of reproduction and its associated divisions of labour. This article emphasised domestic care services but similar analyses can fruitfully be undertaken of other sections of the care services economy (Yeates, 2004a, b). None of this in any way denies the continued need to focus on national-level institutions and arrangements, but only to place them in a broader global political economy context. Doing so expands the remit of social policy analysis from a primary focus on ‘internal’ policies to also encompass ‘external’ finance, trade, labour, development and debt policies formulated and implemented on a bi-lateral, plurilateral or multilateral basis; it also enhances appreciation of the global power structures and hierarchies in which social policy is situated. Ultimately, it is only by situating social policy and care arrangements within the context of social relations of global production and reproduction that the contemporary roots and forces of inequality within and across societies are revealed.

R e f e re n c e s Anderson, B. (2001), ‘Why madam has so many bathrobes: demand for migrant domestic workers in the EU’, Tijdschrift voor Economische en Sociale Geografie, 92, 1, 18–26. Anderson, B. (1997), ‘Servants and slaves: Europe’s domestic workers’, Race and Class, 39, 1, 37–49. Blackburn, R. (2002), Banking on Death Or, Investing in Life: The History and Future of Pensions, London: Verso. Cancedda, A. (2001), Employment in Household Services, Dublin: European Foundation for the Improvement of Living and Working Conditions. Chang, K. and Ling, L. (2000), ‘Globalization and its intimate other: Filipina domestic workers in Hong Kong’, in Marianne Marchand and Anne Sission Runyan (Eds.), Gender and Global Restructuring: sightings, sites and resistances, London: Routledge. Chin, C. (1998), In Service and Servitude: Foreign Female Domestic Workers and the Malaysian ‘Modernity’ Project, New York: Columbia University Press. Cox, R. (2000), ‘Exploring the growth of paid domestic labour: a case study of London’, Geography, 85, 3, 241–251. Daly, M. (2002), ‘Care as a good for social policy’, Journal of Social Policy, 31, 2, 251–270. Delphy, C. and Leonard, D. (1984), Close to Home: A Materialist Analysis of Women’s Oppression, Amherst, University of Massachusetts Press. Ehrenreich, B. (2002), ‘Maid to order’, in Barbara Ehrenreich and Arlie Hochschild (Eds.), Global Woman: Nannies, Maids, and Sex Workers in the New Economy, New York: Metropolitan Books. Esping-Andersen, G. (1990), The Three Worlds of Welfare Capitalism, Cambridge: Polity. Faini, R. (2002), ‘Migration, remittances and growth’, September (www.wider.unu.edu/conference/ conference-2002-3/conference%20papers/faini.pdf) Gregson, N. and Lowe, M. (1994), Servicing the Middle Classes: Class, Gender and Waged Domestic Labour in Contemporary Britain, London: Routledge. Heyzer, N., Lycklama, G., and Weerakoon, N. (Eds.) (1994), Trade in Domestic Helpers: Causes, Mechanisms and Consequences of International Migration, Kuala Lumpur: Asian and Pacific Development Centre. Hochschild, A. (2000), ‘Global care chains and emotional surplus value’, in Will Hutton and Anthony Giddens (Eds.), On The Edge: Living with Global Capitalism, London: Jonathan Cape. Hooyman, N. and Gonyea, J. (1995), Feminist Perspectives on Family Care: Policies for Gender Justice, Thousand Oaks, CA: Sage. Huang, S. and Yeoh, B. (1996), ‘Ties that bind: State Policy and Migrant Female Domestic Helpers in Singapore’, Geoforum 27(4), 479–493.

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Katzman, D. (1978), Seven Days a Week: Women and Domestic Service in Industrialising America, New York: Oxford University Press. Lutz, H. (2002), ‘At your service madam! The globalization of domestic service’, Feminist Review, 70, 89–103 Mies, M. (1986), Patriarchy and Accumulation: Women in the International Division of Labour, London, 2ed Books. Navarro, V. (1982), ‘The crisis of the international capitalist order and its implications for the welfare state’, Critical Social Policy, 2, 1, 43–61. Navarro, V. (1998), ‘Neoliberalism, “globalisation”, unemployment, inequalities, and the welfare state’, International Journal of Health Services, 28, 4, 607–682. Orozco, M. (2001), ‘Globalization and migration: the impact of family remittances in Latin America’ (www.chicagofed.org/unbanked/conferences/pdfiles/globalization%20and%20migration.pdf) Parrenas, ˜ R. (2000), ‘Migrant Filipina domestic workers and the international division of reproductive labour’, Gender and Society, 14, 4, 560–581. Pascall, G. (1997), Social Policy: A New Feminist Analysis, London: Routledge. Peterson, S. (2003), A Critical Rewriting of Global Political Economy: Integrating Reproductive, Productive and Virtual Economies, London: Routledge. Pettman, J.J. (1992), Worlding Women: A Feminist International Politics, London: Routledge. Platzer, E. (n.d.), ‘Domestic services and the division of labour: the example of the Danish home service scheme’, Växjo¨ University, Sweden (http://www.hum.vxu.se/publ/humanetten/nummer10/art0207. html) Stalker, P. (2000), Workers without Frontiers: The Impact of Globalization on International Migration, London: Lynne Rienner. Williams, F. (2003), ‘Rethinking Care is Social Policy’, paper presented to the Annual Conference of the Finnish Social Policy Association, University of Joensuu, Finland, October 24th. Yeates, N. (2004a), ‘Global care chains: critical reflections and lines of enquiry’, International Feminist Journal of Politics, 6, 3, 369–391. Yeates, N. (2004b), ‘A dialogue with ‘global care chain’ analysis: nurse migration in the Irish context’, Feminist Review, 77, 79–95.

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Sectors, Agents and Rationale A Study of the Scandinavian Welfare States with Special Reference to the Welfare Society Model Ka Lin University of Turku, Finland abstract: The widely held assumption that the welfare society model is superseding the welfare state model has restructured the common view of the future of social policy all around the world. This study brings local issues into focus with an investigation of the applicability of the welfare society model in the Scandinavian context. The study first examines the strength of the various welfare agents sector by sector to define the sectoral rationale, and second it seeks to reveal the system rationale of the Scandinavian welfare state by using the perspective of private–public interplay. The basic argument is that the public sector-led structure of welfare provision prevents non-public agents from realizing their full potential. The farreaching institutional integration of the private and public spheres leaves little room for voluntary (welfare) agents to operate; the weak sense of reciprocality, combined with a strong notion of welfare right, still renders normative support for a system of state welfare. These conditions will surely vitiate the high hopes that some hold for the welfare society model in Scandinavia. keywords: private–public interplay ◆ Scandinavia ◆ sectoral relation ◆ social policy ◆ welfare regime ◆ welfare society

1. Introduction The idea of the welfare society has been part of the international debate on social policy for two decades (since OECD, 1981), and although its attraction has not completely faded today (see, e.g., Rodger, 2000), the context of discussion has changed. The enduring legitimacy of the welfare state, along with its institutional resilience (see Castles, 2001: 196; Taylor-Gooby, 2001; Sainsbury, 2001; Palme et al., 2002), has defused the sense of crisis and weakened faith in the welfare society as the only model for the future (see Eräsaari, 1985; Wiman, 1989). Methodologically, the welfare regime theory has drawn attention to the specific nature of a regime’s rationale, and this, too, is challenging the belief that all countries should be advancing towards the welfare society. These developments are creating a new set of circumstances for discussion of the welfare society issue. This article is a conceptual and theoretical investigation of the welfare society model and its applicability in the Scandinavian states. There are several reasons why the Scandinavian examples are particularly valuable in the study of this model. First, these states provide generous social security benefits for their citizens, which conflicts with the principle of civil self-management inherent in the welfare society model. Second, as the welfare society thesis Acta Sociologica ◆ June 2004 ◆ Vol 47(2): 141–157 ◆ DOI: 10.1177/0001699304043852 Copyright © 2004 Scandinavian Sociological Association and SAGE (London, Thousand Oaks, CA and New Delhi) www.sagepublications.com

Acta Sociologica 47(2) was generated by the crisis thesis (OECD, 1981), the durability of the Scandinavian model (Ploug, 2000; Lindbom, 2001; Kautto and Kvist, 2002) challenges the belief that the future lies in the welfare society model. Third, the fact that Scandinavian scholars often describe their welfare states in terms taken from the welfare society (e.g. Abrahamson, 1994) makes it vital to maintain a conceptual distinction between the two models. Accordingly, this study takes the Scandinavian states as its research objects and focuses on the nature of their civil societies. It departs from the conventional approaches to the Scandinavian welfare states in a number of ways. While in many studies of this kind efforts have been made to demonstrate the strength of the public sector, this study instead illustrates the weakness of the non-public agents. It differs from those studies which seek to explain how a universal model came to be established in Scandinavia by asking another question: why are alternative options such as the welfare society model so difficult to implement? Consequently, this study should reveal some of the areas missed in current Scandinavian research and so complement the more conventional approaches.

2. Conceptual issues The welfare society First, I examine various meanings of the term ‘welfare society’ and the relationship of these meanings to the idea of the welfare state. At least four contexts of usage can be recognized. In one case the two concepts reflect different perspectives on welfare systems, either a view from on high or one from the grass-roots level. In Robson’s (1977: 7) words, the welfare state is ‘what Parliament has decreed and the Government does’, while the welfare society concerns ‘what people do, feel and think about matters which bear on the general welfare’. Robertson (1988: 222), too, described the welfare state as a ‘legal state’ entitling its citizens to welfare provisions, and the welfare society as ‘an organic part of everyday life’. Thus, in this view, the welfare state deals with matters of public administration while the welfare society concerns the perspective on welfare systems from the bottom of a social organization. Since a welfare system can be viewed from both a top-down perspective and a bottom-up one, the relationship between the two concepts here is parallel but complementary. Changing the discussion context from research approaches to the actual social systems, a welfare state generally means a system of state welfare (see Veit-Wilson, 2000), while welfare society refers to the welfare of society at large. Because no state can be separated from its society, the welfare state can be interpreted as being part of the welfare society, or as residing within it. In this sense these two concepts are closely linked; in fact they overlap. Understood in this way, researchers have been able to label these welfare states as the ‘Scandinavian welfare society’ (see Abrahamson, 1994: 120–130), and, furthermore, because strong bonds of mutual obligation between the state and citizens existed in these societies, some authors (i.e. Altman, 1992) have even regarded them as ‘the most developed welfare societies in Europe’. In the third usage context, the welfare society is an ideal stage of society with the goal of ‘welfare for all’. An early exemplar of the term used in this way was Titmuss (1968), who took welfare society to be largely the equivalent of ‘a welfare world’ and predicted a move ‘toward welfare society’ in the next phase of social progress (ibid.: 127, 136). It is interesting to note that this usage can also be found in Scandinavia. Ahn (1996: 153) argued that in Sweden the idea of the welfare society originated with the democratic movement of the 1910s, which raised the policy goal of ‘welfare for its (i.e. society’s) members’. Mörner (1989: 255–6) also linked the welfare society to the social democratic idea of the ‘People’s Home’ (‘folkhemmet’ in Swedish). In this context, the welfare state is a means of pursuing the ideal of the welfare society. Accordingly, it is not hard to grasp what the Finnish government meant when it 142

Lin: Sectors, Agents and Rationale proclaimed recently that ‘the government’s premise in social policy is the preservation of the Nordic welfare society’ (MSAH, 2001a). In the fourth context, the welfare society is seen as a social policy model based on the core principle of civil self-management, in contrast to the welfare state model, which entrusts the state with a comprehensive duty to provide welfare for its citizens (OECD, 1981; Cox, 1998: 3–5). The welfare society model underscores the roles of family care, voluntary help and private charity, while the welfare state model emphasizes the state’s actions to pool the common risks (Rose, 1986; Eräsaari, 1985; Wiman, 1989: 5–6). With such dissimilar assumptions, these two social policy models surely conflict. In this article I use these concepts in this context, since in social policy debates the merit of the welfare society idea lies mostly in its potential to compete with the welfare state model.

Sectoral analysis Any study of the welfare society should be examining the role of civil self-management. This role cannot be defined by civil society itself, but by its relation with the private and public sectors. To deploy an analysis of sectoral relations is not easy, because the boundary lines between welfare sectors are vague. For example, Rose (1986: 14) emphasized household, state and market as the three main sectors, while Friedmann (1996) listed family, state and civil association. It is surely unrealistic to hope for a standard classification, and indeed each classification serves only its author’s particular purposes. In this study, I take four types of agent into consideration: the commercial/private for-profit agents, the family, the local community and voluntary associations; these reflect the private, informal, local and voluntary sectors, respectively. The private for-profit agents provide commercial services for welfare clients, and the strength of this sector reflects the power of the welfare market. If families as welfare agents have obtained a dominant position in the system (as in the example of East Asia), this indicates the strength of the informal care network. The voluntary agents are non-profit and non-statutory by nature (see Seibel and Anheier, 1990: 7; Wuthnow, 1991: 5–7) and their strength reflects the capacity of civil society for self-management. In the case of the local community, Streeck and Schmitter (1985) see it as an independent agent parallel to state, family and civil society agents, while others (see Nilsson and Wadeskog, 1986) go further by regarding it as a fourth sector. In this study, I treat the local community sector as separate from the voluntary associations. As far as social policy is concerned, sectoral relations can be examined in both the areas of income security and welfare services. With income security, income transfer among family members is the best indicator for testing the strength of family welfare, and the role of commercial insurance in people’s life security is a useful indicator of the power of the welfare market. Nevertheless, for an examination of sectoral relations the area of welfare services seems a better one than income security. The latter area is largely a matter of state policy, but in the former the different agents act and interact directly. Therefore this study takes welfare services as its main focus. Through sectoral analysis I present a general profile of the welfare sectors in service provision. This profile is constructed on a certain empirical basis, but this basis is not fully presented since, in essence, no empirical data can ‘prove’ any general statement about sectoral relations. The basis for constructing this profile is the logic that supports a certain welfare sector, or, in other words, the ‘sectoral rationale’, with empirical data used mostly as illustrations. It has to be borne in mind that the sectoral relations revealed in the service area may differ from those found in other areas. For instance in Scandinavia, private agents play a bigger role in the field of health care than they do in the field of welfare services (see, e.g., Palme et al., 2002: 339). By examining the sector rationale in depth it becomes possible to produce a general sector profile. 143

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The private–public interplay The analysis of the sectoral rationale leads this study to the system rationale that encourages or discourages the growth of certain welfare sectors. For ascertaining the logic of the system rationale the welfare regime theory is a useful tool because it reveals the particular logic, structures and ideological presumptions of regime types. Following the regime theory, in this article I adopt one of the three classic welfare regimes as my research object: the social democratic regime that covers Sweden, Denmark, Norway and Finland. These four welfare systems vary to some extent, but their common traits have been identified by a number of regime analyses (Esping-Andersen, 1990; Abrahamson, 1994; Pierson, 1998: 779–80; etc.). Nevertheless, this study departs from the popular form of regime analysis that deals with redistribution effects. It aims to provide an interpretation of this regime in the light of private–public interplay, which can be seen on both the societal and the individual level. On the societal level it displays a particular kind of institutional relationship constructed between the private and public spheres. On the individual level this interplay reflects the relationship of the private and public worlds in individual life (as can often be seen in feminist writings). Studies made on both of these perspectives will eventually arrive at the same logic, so facilitating a better understanding of the system’s rationale. In this study of sectoral relations I therefore approach the issue of private-public interplay by examining aspects of the institutional features and of the normative basis, and then, by combining these analyses, aim to uncover the system rationale. The issue of interplay has been discussed by scholars studying the third sector and gender issues. The first group are interested in the institutional relations between the state and voluntary agents (see Evers and Wintersberger, 1988; Wuthnow, 1991), while the second group (e.g. Hernes, 1984; Wærness, 1987; Siim, 1993) assess the impacts of social policies and public services on the reconstruction of the private and public boundaries in women’s lives. As the interplay issue is directly connected with the system rationale, it can be used to make a new contribution to regime analysis. An analysis of this interplay should have at least two sorts of policy implications. Theoretically, it reveals the very foundations of the Scandinavian social democratic order that determines the context of the state’s social policy-making. As this interplay is historically formulated, it constitutes an institutional legacy for the system evolution. Thus the study of this interplay could disclose the contexts of Scandinavian societies that shape their ‘policy paths’.1 In the light of social policy practices, meanwhile, a focus on institutional interplay could provide an explanation as to why the Scandinavian welfare state model survived basically intact during the economic recession in the early 1990s (in Finland and Sweden). In the following, I study this interplay through an investigation into the sectoral relations.

3. Sectoral relations – a stereotype There is general agreement among researchers that the Scandinavian countries have a strong public sector that receives a large financial input from taxes and has a large number of employees. According to Castles’ (1998: 129) data, these states had the highest levels of civilian public consumption expenditure as a percentage of GDP among the major welfare states in the 1990s. With regard to employment, the public sector in all these countries has taken around one-third of the total workforce, which is much higher than the 20 per cent European Union average (see Rauhala et al., 1997: 145). The OECD (1999) data also rank these states as the top 4 among 23 industrial countries in regard to the percentage of the workforce in public employment (excluding the employees of public enterprises). Assessing the strength of the non-public sectors, though, is difficult. The state’s policy measures may support the operation of the nonpublic agents, but they might also subordinate these agents to the public sector. We thus need 144

Lin: Sectors, Agents and Rationale to examine the strength of these agents sector by sector in terms of institutional profile, normative basis and the influence of state policies.

Private for-profit agents and the welfare market In the international context, the private (for-profit) agents are frequently presented as the key actors in leading a move toward the welfare society. In Scandinavia, however, the institutional power of these agents is weak. In the fields of elderly care and child day-care, only a small percentage of welfare outcomes have been produced by private agents (see Rostgaard and Lehto, 2001: 148; Lehto et al., 1999).2 This output is connected with the small input into this sector, as indicated by the smallness of user charges relative to the total costs in many services areas, for example home help (NOSOSCO, 2001: 154). Thus, when the welfare market available for these agents is small, there is little incentive to provide private services (notwithstanding the recent development caused by the reductions in public services). This is largely because of the welfare state mechanism that channels most welfare finance to the public sector (or through it to subsidise non-public sectors), leaving little money in the hands of individuals to purchase services themselves. Meanwhile, so long as the public agents provide comprehensive welfare services, the occasions when people have to buy services from private agents are rare. Normatively speaking, three factors discourage people from using private agents to satisfy their welfare needs. First, the easy access to public services with low prices but high standards surely induces clients to choose public services ‘voluntarily’. In this sense, it can be said that the private agents in these states encounter public agents as the competitors in the service sector. Second, as Taylor-Gooby (1999) maintains, trust in private agents is a prerequisite for the growth of a welfare market, and this trust is not strong in Scandinavia. Although the image of commercial agents is now more positive than it was in the past, people’s confidence in the public agents still gives them little reason to turn to private agents. Third, the principle of decommodification tends to render Scandinavians cautious about exaggerating the role of private (for-profit) agents. These normative reasons affect people’s decision-making on service purchases. As for state policy, the public authorities subsidize private agents to some extent, and these subsidies constitute an important part of the financing of their operations. Sweden made the finance and supervision of elderly care in both private entrepreneurial and public institutions a municipal duty (MHSA, 2001), and in the case of child care, the Norwegian government provides grants to approved day-care institutions in both the private and public sectors (MCFA, 1998: 7). The private care institutions in Denmark are often financed by public funds and have even been regarded as an integral part of the public service provision system (see Csonka and Boll, 2000: 4), while in Finland, in addition to public subsidies, municipalities are making increasing use of contracts with private agents (MSAH, 2001b). While these measures support private agents, they also subordinate them to the public agents, thus making them vulnerable to changes in state policies.3 Thus, although there has been an increase in the number of private welfare producers, the public agents maintain their roles as financiers, contractors, regulators and controllers of welfare services (see Lindbom, 2001: 186; Timonen, 2001: 47).

The family and the informal sector In addition to the private for-profit agents, the great potential of families in the production of welfare is frequently articulated by researchers in international social policy debates (see Rose, 1986; George and Wilding, 1994). The advantages of using family care lie in low costs and in the emotional engagement between care-givers and receivers. As elsewhere, Scandinavian families provide welfare services for their members. Care for children is the duty first of all 145

Acta Sociologica 47(2) of the parents, particularly so in Norway (see MCFA, 1998). Even so, the public services supporting childcare are so generous that the significance of informal care has been reduced. As far as elderly care is concerned, most Scandinavian elderly are accustomed to living independently with the support of public home help or in a service institution. The informal care for needy elders offered by relatives (excluding spouses) is less plentiful. As Bonke and KochWeser’s (2001: 18) study has shown, in Sweden and Denmark informal care for the elderly provided by adult children takes a smaller percentage of the total care provision than the work done by public home helpers. When the obligation for elderly care has been declared to be a public one (see MHSA, 2001), many elders see their entitlement to public services as a right, although they may in reality live independently of service support. They see support from kin as an extra (Millar and Warman, 1996). In Sweden, for example, a majority of elders want to get care from the public sector unless they can obtain care from their spouses (Bergmark, Thorslund and Lindberg, 2000: 245). This attitude has also been reflected among disabled groups. Many disabled people as welfare clients consider that the duty of caring for them is a public one, despite the availability of their relatives (see Johansson and Ahlfeldt’s survey, 1993: 78). Child day-care has been declared to be a municipal duty in these states (e.g. MSA, 2001b) with the exception of Norway, but Norway still provides public support for day-care services. The generous provision of public services dilutes people’s belief in the family ethos, and this is a trend that is intensified by women’s complaints about the double burden of paid work and domestic work (see Lappalainen and Motevasel, 1997: 193). Consequently, informal care today seems more likely to depend on people’s individual wishes than on their social responsibilities. The Scandinavian states have developed various policy schemes in support of family care, including child allowances, parental leave benefits and child-care allowances, etc. (see NOSOSCO, 1999, 2001). These measures promote positive relations among the state, family and individuals, and make it possible for women to combine paid work with child-caring (Siim, 1993; Kjeldstad, 2001). The fact that the state plays a role as a sponsor of family care, however, undermines the economic and welfare functions traditionally belonging to families. When support from public sources becomes indispensable for families, the result is a de-privatizing of family life (e.g. Hernes, 1984: 24; Lin and Rantalaiho, 2003), thus blocking the way for a return to an older model of family care. Privatization measures such as increases in user charges, staff reductions in public services and restrictions imposed on home-help services all stimulate the demand for family care; nevertheless, the availability of care resources from relatives to meet with this demand is problematic.

Local community The welfare society idea involves an expectation that community organizations will solve welfare needs with local resources, local initiatives and local participation. Using means such as organizing mutual help groups and voluntary teams, and building up local welfare centres, community work is envisaged in the international context as a cheap and effective way of coping with welfare needs. Nevertheless, certain conditions in the Scandinavian countries may hinder local communities from going very far down this path. In these states, the institutional position of the community in the provision of social welfare is barely recognized, and much of the welfare function of a locality is implemented by municipalities (Ronnby, 1996; MSA, 2001d, etc.). Given these institutional characteristics, researchers in Scandinavia have called municipal home help ‘communal home help’ (e.g. Nupponen and Simonen, 1979) and municipal services ‘public community services’ (Wærness, 1987: 133). In some cases, neighbourhoods or residential communities may set up their own projects, such as an old-age home built by villagers (see Ronnby, 1996: 178–9), but in most cases these projects are planned in coordination with municipal agents and implemented with the support of public subsidies. 146

Lin: Sectors, Agents and Rationale The functional integration between community and municipality has its normative reasons. First, the smallness of the Scandinavian municipalities – there are municipalities that have only a few hundred residents (Nupponen and Simonen, 1979: 33; Albæk et al., 1996) – enables people to attach their local sense of belonging to their municipalities. Second, owing to the limited capacity of local networks of relatives and neighbourhoods, which is not big enough to operate a local system of self-managed welfare, this duty is left to the municipalities. Third, the municipality plays an active role in the promotion of civil activities at grass-roots level, where to some extent it acts as the organizer of local society. Thus, while community organizations in other parts of the world are often understood as self-regulating civil society agents that stand in contrast to municipalities as public agents, no such sharp contrast exists in Scandinavia. The idea of community experiments appeared on the policy agenda in these states mainly after the 1970s, when the international discussion about the welfare society idea stimulated a wave of community work practices. Though this wave abated during the 1990s, some aspects of the work continue today. The de-institutionalization of elderly care remains popular, especially in Denmark (Csonka and Boll, 2000: 4; also MSA, 2001c: 26), and the participatory approach, for example in Norway (MHSA, 1999), generates a need for developing local cultural centres. Decentralization is still bringing about new initiatives of developing community services, as in the cases of Sweden and Finland (see Montin, 1993; Niiranen, 1999). Nevertheless, we can scarcely claim that the state’s goal of promoting community work as a means of shifting the welfare burden from public to civil society agents has been effectively achieved. When public funds are a prerequisite for the organization of these community projects and they are allocated for set periods, the working of these projects is not stable and permanent, which impedes their integration into local networks.

Voluntary associations Scholars have commented on the large number of voluntary organizations and their members in these states (see Ronnby, 1996; Keränen, 1997: 6–7; MSA, 2001d) and these data would support the Scandinavians’ claim of having an active civil society. However, beneath the surface we can observe three basic features of these voluntary organizations in regard to their welfare functions. First, most of them act in the fields of politics, culture and adult education, and only a small percentage act in the field of social welfare (Nylund, 2000: 69, 115; MSA, 2001a). Second, most of the voluntary welfare agents belong to national associations for welfare and health care (especially the Red Cross) and their local branches (Keränen, 1997). In a survey covering the four Scandinavian countries and Iceland, it was discovered that among young volunteers, 80 per cent were involved in work for the Red Cross, with the rest in ‘voluntary centres’ (Nylund, 2000: 146). Third, the welfare outcomes produced by these voluntary welfare agents are generally small. The Finnish example is typical: the voluntary welfare organizations consisted of 10 per cent of the total voluntary organizations, but produced only 3–4 per cent of the total welfare services (Keränen, 1997: 7). The idea of voluntary work is unquestionably valued by Scandinavians, but it has been undermined by certain popular perceptions. Nylund (2000: 13) refers to a bias that links a model based on voluntary work to a residual model, and Lappalainen and Motevasel (1997: 193) point out that the idea that social welfare is by nature voluntary work belongs to the liberal model of social policy. Indeed, Scandinavian voluntary organizations have adopted the notion of welfare right as one of their working principles, and so these organizations maintain an ethos that is not very much different from that of the public agents. It is hardly surprising, then, that voluntary agents can often work as the associates (or assistants) of public agents. The state and municipalities promote voluntary agents in various ways with both financial and legislative measures. Two issues have therefore become central in the debate on voluntary work: one is the cooperation between the public and voluntary agents; the other is the role of 147

Acta Sociologica 47(2) public funding (see, e.g., MSA, 2001d: 14). Generally speaking, however, these voluntary organizations are usually less concerned with the running of services than with campaigning and lobbying, although recently their interest in services has increased. Their ideology is associated more with democratic values than with an ideal of civil self-management (see MSA, 2001a: 49). Consequently, the state’s policies in support of voluntary organizations is functionally on enhancing the democratic order more than on strengthening their welfare roles. To sum up, the above description of sectoral relations shows the dominance of the public sector in welfare in these states, while ‘the role of private and voluntary services has, in comparison with other countries, been minimal’ (see the comments on the Swedish system in Bergmark, Parker and Thorslund, 2000: 313). The social policy reforms of recent years have reduced the weight of the public sector. But while the cuts in public expenditure and reducing public employment may strengthen the position of the non-state sector as the alternative to the public sector, this effect, which is expected by the advocates of liberalism, has not become evident in Scandinavia. Now we need to seek a theoretical interpretation of these phenomena and explain why the public sector should be so powerful, why it affects the operation of the non-public sector so much, and why it is that the non-public agents cannot extend their role in civil society.

4. Interpreting the system rationale in light of private–public interplay The above description of sectoral relations shows the significance of institutions in the private–public interplay embodied in the Scandinavian welfare systems. To understand the nature of this interplay, as well as its origins and development, we need a view of ‘pathdependency’ which asserts that institutional legacies limit the options for institutional reform and prevent the shift of the ‘policy path’ (see Pierson, 1994, 2001; Torfing, 2001). In this section, I outline some of the basic features of institution-building in the contemporary Scandinavian societies to reveal the role of the institutional legacies in shaping the ‘policy path’.

Preconditions The development of the private–public interplay in Scandinavia has its historical preconditions. Building this interplay requires an interventionist state, and in Scandinavia the legitimacy of the interventionist state is ensured by a tradition of statism, which was established in the Reformation period. The continuance of this tradition in later years was associated with the positive relationship built between the king and peasants. Farmers did not suffer very much from tyrannical rule once their taxes had been paid, and the kings (especially in Sweden) sought to build a political alliance with the free farmers in order to check the power of the nobility in the diet. Land reform, too, enabled peasants to see the state not as an oppressive monolith, but as a benefactor of the common people (see Allardt, 1986: 100–11; Alestalo and Kuhnle, 1987). In return, this positive relationship increased the state’s interest in the living conditions of peasants and cultivated a sense of state responsibility for welfare. This statist tradition does not exist in a vacuum. Questions about how people living at the bottom of society react to it can be answered by looking at two other traditions, the weak communal power and the early development of democracy. In agrarian Scandinavia, the family was not extensive in structure, as brothers’ and/or sisters’ families usually did not live altogether. The residential community had only limited functions. There was a lack of leadership in local self-administration: the power of nobles was challenged by the free farmers, but the free farmers were not particularly energetic in organizing the locality into a selfadministered community force. The parishes did offer welfare services to local people, and the neighbourhoods did cooperate in farming and everyday activities, but these activities did not result in strong local organizational power: they merely produced a weak collective world between the private and public spheres. 148

Lin: Sectors, Agents and Rationale On the other hand, while local familial and neighbourhood networks remained weak, the Scandinavians did develop democratic political institutions. This tradition has its roots in an ancient ideal of governance by assembly, which was a characteristic feature of politics in Scandinavia during the Middle Ages (see Línda, 1981: 36). Later, as in Sweden, these protodemocratic institutions evolved into a diet with four estates. The free farmers constituted one of the estates, making the diet not only a tool of the monarch and aristocrats, but also a forum where the free farmers could express their views (see Allardt et al., 1981). This democratic tradition, which broke down the inclusiveness of the private world, acted as a bridge between people’s private interests and public concerns. It planted the seeds of the democratic order of modern times.

Formation and influence Within these cultural–historical contexts, a Scandinavian form of public–private interplay was constructed during the growth of a mass democratic social order from the late 19th century onwards. Through participating in popular movements and later in democratic politics that linked individuals and the state directly with each other, people organized themselves into pressure groups to promote their rights, and in this way ‘public participation has not been in contrast to the private and individual world’ (Allardt, 1986: 111). This changed the way people pursued their interests: instead of extending their network of private dependence, they participated in politics. When people seek welfare resources from the public domain, social policy becomes a central area of interest bargaining. Later on, the development of a welfare state system further incorporated individuals into a statist mechanism, and therefore reconstructed the boundaries between the public and private in individual and family life. The reform policy of privatization, which strengthens the private power but reduces the public power, may challenge this social order so that the issue of dismantling the social democratic order will have to be debated. However, so far no substantial evidence has been presented that dismantling has commenced.4 With this in mind, we have a basis for explaining sectoral relations. These Scandinavian systems characterized by private–public interplay link individuals closely to the public power and this restricts the use of private arrangements as the chief means of defending the individual’s interests. In this system, families have to connect with the public agents, at least on matters of family care, which pushes families to ‘go public’ (Hernes’s term, 1984: 24, 27). Democratic politics still encourages voluntary agents to act in the public sphere, and they do not have a strong desire to construct an extensively self-administered voluntary world. If they did try to do so, they would encounter great difficulties because in this interplay system the buffer zone between the public and private spheres available for these agents to operate in is small. The private agents cannot be very strong as an independent social force in the system and a tendency towards decommodification still imposes limits on the growth of a welfare market. In the public sphere, the Scandinavian systems are characterized by a high degree of integration, legalization and institutionalization. Central, provincial and local government all work together for public welfare and they are the basic components of the welfare state. The political institution of ‘state corporatism’ (Micheletti, 1991: 149), the corpus of legalization and the orientation towards cooperation all prevent the system from fragmenting. For balancing the interests of municipalities, the state enacts laws to regulate municipal practice; it allocates ‘general grants’ for subsidies and it sets up equalization schemes to level out differences between municipalities. Counties make a contribution through their role of coordinating municipalities, and the municipalities themselves build programmes for cooperation (see Nupponen and Simonen, 1979; Albæk et al., 1996; MSA, 2001b: 16). These activities reinforce the system integration and protect the power of the public agents, which ensures the 149

Acta Sociologica 47(2) continuation of a public sector-led private–public interplay. Reforms promoting decentralization (see Albæk et al., 1996; Bergmark, Thorslund and Lindberg, 2000) have reshaped the operational responsibilities for welfare between the state and municipality, but this has not meant a decrease in the interaction and integration between these two parties, nor a redrawing of the boundary lines between the private and public spheres.

Normative support If the institutional interplay is to work effectively it has to rest on a normative basis that supports the prevalent sectoral relations. From the rich variety of norms, this study takes the following three as the main indicators of the normative basis of the Scandinavian welfare state: reciprocal obligation, altruistic motivation and a sense of welfare right. Reciprocal obligation endorses family care, mutual help and community work; altruistic motivation initiates charitable and voluntary work, collective welfare efforts and social assistance; the notion of welfare rights legitimizes social redistribution and publicly subsidized services. Reciprocal obligation is weak in the minds of contemporary Scandinavians for both cultural and social policy reasons. Culturally, Scandinavians uphold notions like egalitarianism and individual autonomy, which were produced in a cultural ecology of the past. A set of elements such as small populations scattered over vast areas, a production pattern of fishing and forestry demanding simple organizational forms, and small-scale farming, fostered the growth of a less interactive type of personal relations and a cultural preference for independence and individual autonomy. Moreover, modern social policies offer individuals greater opportunities to live independently, but decrease family members’ mutual dependence on economic and care needs. These conditions weaken the capacity of the family and informal sector in welfare production. As far as the altruistic motivation for voluntary work is concerned, Scandinavians feel compassion for those with welfare needs, which seems to be a precondition for developing a universal type of social policy. However, there is a general belief that altruistic actions are unable to cope with real welfare needs (see Nylund, 2000), and therefore the significance of volunteerism should not be exaggerated. Another factor to be taken into account is that altruistic giving may unintentionally put recipients in a morally inferior position, which sounds odious to Scandinavians, who have a strong sense of equality. Moreover, one of the most significant normative reasons is a belief that welfare is a public duty, and not a matter for private charity (Lappalainen and Motevasel, 1997). To receive private charity is especially shameful for Scandinavians because it implies either exclusion from the public help system, or exhaustion, by misuse, of the resources received from the public agents. Given such a normative basis, it is understandable that the voluntary sector gets only a limited input of human resources (volunteers for welfare work) and financial resources (private donations). The notion of welfare right is located at the very centre of welfare ideology in Scandinavia (see MSA, 2001a; MHSA, 1999, etc.). Egalitarian and redistributive ideas are actualized through social benefits and public services in the name of social rights. Welfare right is accompanied by notions such as social equality, social citizenship and social justice, and growth of this concept is related to the influence of the social democratic ideal of turning the country into a ‘People’s Home’. With this ideal, the state’s provision of welfare is not paternalistic or charitable giving, but the means for ensuring citizens’ rights. These features lead people to be supportive of a state welfare system and public services. Survey data show that support for state welfare is stronger in Scandinavia than elsewhere (see, e.g., Taylor-Gooby 2001: 139, table 2) and this support has persisted for many decades with no substantial change (see tables in Andersen et al., 1999). Through the above analysis, this study has illustrated some background factors explaining why the public sector is so powerful in Scandinavia, with other agents being left disempowered. 150

Lin: Sectors, Agents and Rationale It takes the key factor to be the institutional feature of private–public interplay, which leaves only a very narrow space in which voluntary welfare agents can establish. Since this underlying structure creates functional demands for public welfare endorsed by its normative basis, it imposes limits on policy choices. From this point of view, a study of the institutional legacy and its continuing influence would be helpful for understanding the direction of system evolution. In what follows, I discuss the social policy implications of the institutional legacy with specific reference to the welfare society model. After all, social policy studies should be concerned with practical policy implications and not just with purely theoretical interpretations.

5. Policy discussions Although implementation of the welfare society model is encountering great difficulties in Scandinavia, as this study has demonstrated, its attraction for policy-makers remains strong. Policies to reduce the size of the public sector have been introduced in all these states and cutbacks have continued as economic growth has resumed (see NOSOSCO, 1999, 2001; Ploug, 2000). These phenomena can be partially explained by a decisive change in the vision for the future of social policy. As Enjolras and Lødemel (1999: 478) have pointed out, there has been no fiscal crisis in the Norwegian welfare state, and reductions in entitlements were made mainly because of a change in ideological perceptions. Abrahamson (1999: 31) also stresses that the ongoing debates in Scandinavian social policy are very much influenced by outsiders. We would be interested to see just how effective these policies inspired by outsiders would be if fully implemented in the Scandinavian societies.

Impacts on social policy reform In the international context, the idea of the welfare society has been interpreted in various ways, each emphasizing different development strategies. The liberal advocates tend to talk about the principle of self-reliance and to take privatization as the strategic policy for achieving civil self-management. This is related to the liberal belief that society and the state ‘are comprehensible only in terms of the activities of their constitutive individuals’ (see Lavalette and Pratt, 1997: 34). Conservatives for their part promote a strategy of empowering civil associations, and this is especially true of Social Catholics, who see welfare not as a public nor a private matter, but as a civic and collective one (George and Wilding, 1994; Spicker, 2000). In the hope of finding new solutions, the Scandinavian states have experimented with policy ideas from both these schools of thought. For instance, a privatization policy was adopted in the other Scandinavian countries in the late 1980s (see Lehto et al., 1999: 125; Kautto, 2000), while the policy of empowering voluntary agents has been promoted by means of financial and legal measures, a development to which the new label of ‘using social capital’ has been attached (see Kajanoja and Simpura, 2000). Nevertheless, the indigenous institutional and normative backgrounds undermine the working of these polices. Privatization policies stimulate growth of the private welfare sector (Lindbom, 2001: 179; Timonen, 2001; Palme et al., 2002), but as described above this sector has so far remained small. Measures to mobilize voluntary agents have indeed increased their numbers, but their capacity to produce a wide range of welfare services remains questionable. The state’s support for family welfare in the informal sector raises the degree of the family’s dependence on public resources rather than reduces it. It therefore seems that the performance of this new set of policies has not lived up to the expectations of the policy-makers who wanted to find a way out of the system of public welfare. Indeed, we may conclude that far from dismantling this public sector-led system the reforms have reinforced it by increasing its flexibility and sustainability. The above-mentioned phenomena imply that in Scandinavia public–private interplay 151

Acta Sociologica 47(2) would ensure the sustainability of a social democratic welfare regime model. Thus, even if the state intended to follow neo-liberal ideas about policy reforms, as some early signs in the late 1980s and early 1990s indicated (especially in Sweden), this intention has not been fully realized even after a decade of reform practice. As in Sweden, which has led the wave of privatization in Scandinavia, the change brought about by privatization has not been strong enough to alter the fact that the Swedish welfare system is still dominated by the public sector (see Lindbom, 2001: 179). In Denmark, the state’s privatization measures in the public sector have ‘never come to play any significant role’ (see Torfing, 2001: 300). In Finland and Norway, the process of privatization has not encroached very far upon the domain of public welfare. The politicians can, of course, make their own policy choices in response to urgent political and economic challenges, but the institutions will validate or nullify certain types of social policy, and thus prevent any radical change of their policy types.

A functional demand? If the welfare society has a positive image in the minds of policy-makers, it is largely because it offers the advantage of low operating costs. However, when underscoring this advantage we must not lose sight of the social costs that the new model may bring. It is indeed crucial to consider the social costs if the welfare society model is to be applied in a society where there are many contextual factors that will impede its operation, because there is a risk of system dysfunction which would render social costs high. For instance, increasing user charges would ease the burden of welfare finance, but it would also give people a sense that they were losing their welfare rights and it would sharpen their awareness of social or class inequalities. We can see some evidence of this in the social policy reforms undertaken recently in the Scandinavian states. Generally speaking, a welfare society model that provides a safety net should be able to contribute to the elimination of social exclusion. In Scandinavia, however, a shift from a redistributive welfare state toward a welfare society seems likely to result in an increase of social exclusion instead. This effect can be observed in Sweden, which has gone farther down the road of privatization and where the rates of poverty and social exclusion have increased most (see Gustafsson et al., 1999; Kautto, 2000). This outcome can be understood in the Scandinavian context of private–public interplay, which has weakened people’s informal networks of reliance and produced only a small welfare market. The withdrawal of public welfare may therefore leave a service vacuum. Once the non-public agents cannot fill it, the model of civil self-management will become a mechanism creating social exclusion. In politics, a welfare society model entrusting welfare to civil society may serve to diminish political strains because it reduces the need for public welfare. This is not the case in Scandinavia, however. With the democratic institutions there, public consensus readily transforms into actual political demands, so once the withdrawal of state welfare undermines the living standards of many people, public dissatisfaction will accumulate and produce political strains. This issue has been dealt with by Sundström and Tortosa (1999: 358), who argue that the tightened access to public home help is likely to promote a feeling of exclusion among many elderly. The process of privatization seems inevitably to mean some social groups suffering more than others. The losers are typically welfare dependants, who, perhaps without economic power, do have the political power to defend their interests. Thus, as Lindbom (2001: 171) pointed out, spending cuts that are very unpopular among voters could be dangerous for politicians or parties that hope to be re-elected. There is also the question of legitimacy. So far the public sector-dominated system has maintained its legitimacy in Scandinavia (see Bergmark, Thorslund and Lindberg, 2000; Kautto and Kvist, 2002). A shift from a welfare state model to a welfare society model, if it were to take place, would require the construction of a new ideological framework with notions of 152

Lin: Sectors, Agents and Rationale subsidiarism, selectivism, reciprocality and private dependence, along with a perceived need for institutional change in sectoral relations. Certain questions would inevitably be raised: how can a welfare society model based on private or collective interests be combined with a social democratic order? How can a new institutional balance between different welfare sectors be built? To what extent can the non-state agents fulfil their potential without public support? And how can the normative conflict between the ideas of welfare right and interpersonal dependency be resolved? While such questions remain unanswered, a welfare society model cannot really take root in Scandinavian societies.

6. Conclusions I began this article with a conceptual inquiry into the welfare society and defined the analytical framework. After presenting an institutional profile of the welfare sectors, I presented an interpretation of sectoral relations in the light of the private–public interplay. This led to the conclusion that the system dominated by public agents in Scandinavia has its roots in the institution of private–public interplay. In this way, this study provides some clues as to why the welfare state has proved so durable in Scandinavia. Because of the functional necessity for this system, the various current policy reforms have not changed the basic sectoral relations; they have merely improved the effectiveness of the system. Obviously, this conclusion provides little encouragement for those who advocate a welfare society model. However, it is my view that we should not regard the welfare society model as being superior to the welfare state model. The best model for policy choices should be the one that suits the circumstances best. In the Scandinavian context, the redistributive welfare state is an outcome of policy evolution in a particular socio-cultural context, and experience of its more than 50 years of operation has proved its adaptability and durability in the Scandinavian social climate. If an attempt is to be made to change this system, changes will have to be made in the associated social contexts. A new ideological basis would have to be built in order to create a new legitimacy, and a new institutional balance between the different sectors would have to be constructed. We cannot therefore expect the policy discourse to change simply through a process of policy bargaining, or through the will of the state, without a substantial change taking place in sectoral relations and the associated norms and institutions. These changes may occur gradually, but again, during such a change, the contextual factors which I have described will still have a major impact on the future discourse.

Notes This research is supported by the Academy of Finland and the Finnish Cultural Foundation. 1. From this point of view we may refer to Piersons’ (1994, 2001) concept of ‘path dependency’ (also see Torfing, 2001). 2. The Norwegian case of child-care is an exception. In Norway, public day-care is not a right of children and the growth of private day-care centres is encouraged by public subsidies. 3. As in Finland, it has been reported (see Lehto et al., 1999: 112) that the cuts in public funds during the early 1990s ‘deprivatized’ the provision of welfare services, since the cuts affected private more than public providers. 4. As Bergmark, Thorslund and Lindberg (2000: 244) commented, the Swedish system ‘today is hardly different from ten years ago’. Lindbom (2001: 176) even claimed that at the end of the 1990s the Swedish welfare state seemed ‘more social democratic’ than other welfare states, as other countries had pushed the process of privatization much farther.

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Biographical Note: Ka Lin is Senior Research Fellow at the Department of Social Policy, University of Turku. His research interests are in comparative social policies and the cultural study of welfare regimes. His recent work includes articles published in Social Policy & Administration and International Journal of Social Welfare. Address: Department of Social Policy, University of Turku, Assistentinkatu 7, FIN-20014 Turku, Finland. [e-mail: [email protected]]

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S P & A  0144 – 5596 V. 38, No. 2, A 2004, . 204 –219

Original Articles Blackwell Oxford, Social SPOL  © April  Blackwell –  Policy UK Publishing Publishing & Administration LtdLtd. 

The Path-dependency of an Idea: Why Scandinavian Welfare States Remain Distinct Robert Cox

Abstract Examining reforms that have taken place in the s, this article explores the hypothesis that the most distinctive characteristic of the Scandinavian model today is the “stickiness” of its reputation, rather than the institutions and policies that make up the model. Borrowing the concept of path-dependency from institutional analysis, the article argues that because there is a strong commitment to the idea of a Scandinavian model, there is a tendency to expand conceptions of the model so that policy changes appear to be consistent with it.

Keywords Welfare state reform; Path-dependency; Scandinavian model Introduction The Scandinavian welfare model is a powerful image of an advanced democratic society with a generous system of social support. Since the s, this model has come under strain, as many reforms have been adopted in all Scandinavian countries which seem similar to those adopted in other welfare states in Europe and North America: e.g. more contributory pensions, shorter periods of eligibility for sickness and unemployment, user fees for social and medical services, and work requirements for public assistance and unemployment benefits. Despite these changes, much scholarship on the welfare state suggests that the distinctiveness of the Scandinavian model remains intact (e.g. Huber and Stephens ; Lindbom ; Rothstein ; Kuhnle ). Scholars who make this point acknowledge that many (neo-)liberal reforms have been adopted in Scandinavian countries, but that they have not crossed the line that separates the Scandinavian from other welfare models. There is, however, disagreement on this point. A carefully researched article by Richard Address for correspondence: Robert Henry Cox, Associate Professor and Director, School of International and Area Studies, University of Oklahoma,  Elm Street, Norman, OK , USA. Email: [email protected] © Blackwell Publishing Ltd. ,  Garsington Road, Oxford OX DQ , UK and  Main Street, Malden, MA , USA

Clayton and Jonas Pontussen (; see also Fulcher ) claims that important changes have taken place in Sweden, the quintessential case of the Scandinavian model, and that Sweden is coming to look more like those welfare states that make up the “Continental model” of welfare. Others have put forward similar arguments for the case of Denmark (Andersen and Larsen ; Cox ). The dispute is based on disagreements over where the line between the different welfare models is to be drawn (Goodin and Rein ) as well as over differing interpretations as to which reforms uphold the model and which challenge it. If the Scandinavian model has clear contours, then reforms must either conform to or challenge the model. How can there be such dispute over the effect of policy change on the model? This article explores one possible answer to this question by positing that the Scandinavian model is an idea whose core characteristics are broad and potentially in conflict. The core characteristics of the Scandinavian model are the values of universalism, solidarity and decommodification (freedom from the market), not the specific policies that one finds in any one Scandinavian country. The level of generalization and the potential for contradiction between these basic values allow almost any interpretation of policy reforms to fit some definition of the model. The basic values of the Scandinavian model are subject to a variety of operational definitions, and this adds to the confusion. On the one hand, some scholars employ narrow conceptions of the model, arguing that its core values logically lead to specific policy solutions (e.g. Rothstein ; Cox , ; Clayton and Pontussen ). Narrow definitions, however, inevitably lead to the conclusion that the old model is no longer relevant or, as Bo Rothstein argues, that proposed reforms would mark a serious departure from the model. This is because the basic principles of the Scandinavian model are assumed to have reached near perfection during the “golden age” of welfare expansion (Esping-Andersen ). Any reform after the golden age, by contrast, must mark a departure from the ideal. It is an operational problem: by employing narrow definitions of the model, reality is doomed to disappoint. Other scholars correct this problem by adopting broad conceptions of the Scandinavian model. Recognizing that a number of policy combinations could be employed in the pursuit of any specific goal, they look for evidence whether policy reforms remain consistent with the core values (e.g. Furniss and Tilton ; Palme ; Lindbom ; Huber and Stephens ). But broad conceptions of the Scandinavian model lend themselves to problems of operational vagueness and logical contradiction. The problem is twofold. On the one hand, broadly defined values allow for many varied interpretations as to which reforms are appropriate and encourage dispute over the appropriateness of the policy instruments. On the other hand, there are different assessments of which value takes priority for a selected policy. Though the three core values are related and often support each other, occasionally they stand in conflict. When the values are in conflict, deciding which takes priority has a strong impact on whether the policy change is or is not seen to be consistent with the model. Occasionally, scholars who see a policy reform as a logical result of universalism differ from those who see solidarity as the priority for that particular policy. © Blackwell Publishing Ltd. 

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Narrow conceptions of the core values require specific policy solutions. Broad conceptions of the core values allow for a number of different policy combinations. Differences between these narrow and broad conceptions of the core values are one of the major sources of dispute. Despite its potential for value conflict, and despite the vague policy prescriptions that the core values provide, the idea of a Scandinavian model continues to provide a strong point of identity for policy-makers and the general public in Scandinavia. This attachment to the idea of a Scandinavian model, despite the potential conflict among its basic values, allows for what I call the stickiness of the model’s reputation.

The Path-dependency of Ideas Scholars agree that the distinctive characteristics of the Scandinavian model are its particular combination of the values of universality, solidarity and market independence (decommodification). Here there has been general agreement over time that these are the important values, and debates over the efficacy of the model center on interpretations of whether the era of austerity has disrupted the ability of Scandinavian welfare states to successfully promote these values. The stickiness of the Scandinavian model arises because these core values continue to dominate expectations of what should happen, as well as interpretations of what has happened to Scandinavian welfare states. To study the values that underlie welfare policies requires an ideational perspective, a perspective that has gained in prominence in recent years. In the burgeoning literature on the role of ideas in politics, there are two directions taken by most of the research. In the first approach, the emphasis is on identifying the causal effect of an idea on a specified outcome. This line of research has done much to illuminate the role of ideas in changing the preferences of actors (Blyth  ), bringing together political coalitions (Berman ), or changing the course of political development (Rochon ; Torfing ). Yet studying the causal significance of ideas can be methodologically frustrating because one can only prove that ideas matter when they cause a change to occur. It is fairly easy to demonstrate when ideas were decisive in affecting a certain event, but it is harder to demonstrate that ideas matter when their impact cannot readily be seen, for example when no change has taken place. Moreover, for research of this type, the emphasis is usually on new ideas. In other words, it is new ideas that shift the priorities of actors and thereby facilitate change. Old ideas, the assumption holds, are the foundation for preserving the status quo. Both these limitations make it difficult to use this ideational perspective to study the Scandinavian model. Because the model is not a new idea, it cannot cause these new reforms. Yet another perspective seeks to address this concern by exploring how ideas have a constant impact on everyday life, even when no dramatic change occurs. Everyday ideas help people develop cognitive maps of the world and interpret complexity. This approach to the study of ideas draws heavily from Max Weber’s fact–value dichotomy, and has recently been elaborated by Peter Hall (). According to Weber, a large part of our 

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understanding of the world is constructed. This is not to say that we imagine reality, but our perception of reality is filtered through our values and preferences, causing us to highlight some aspects of reality as more important than others and thereby to create an understanding of the world that has a decided bias. These values and preferences help us to define strategies for action and are an important reason for the political goals we choose to pursue. Therefore, values and action reinforce one another. Values influence action, action helps to reinforce the values that inspire it, and so on. In this approach, ideas are the linkage mechanism between values, which are fairly constant, and immediate circumstances, which change. This article employs this second approach to the study of ideas, positing that the stickiness of the Scandinavian model arises because, though there is strong agreement on the core values of the model, these three values have a potential to lead to conflicting policy prescriptions. Therefore, while scholars recognize the same basic values, the way they define them and the particular emphasis they place on one value over another in interpreting a particular policy change will allow for a variety of interpretations of the impact of welfare reforms. The core values of the Scandinavian model are not only important to the scholars who observe the model, but they are widely shared by the citizens of Scandinavian countries and constitute an important component of national identity in those countries. When political values possess this degree of shared attachment, they create what March and Olsen () called a “logic of appropriateness” for the consideration of policy options. Because of the strong attachment to values, some policy options will be viewed more favorably than others. In the process of promoting reform, policy leaders appeal to the shared values to gain support for their reforms. But, because these abstractions are so broad and encompassing, they often are difficult to operationalize with precision at the micro level. Moreover, across different micro phenomena, there might be discrepancies in the degree to which specific events actually conform to the model. At the same time, different values might lead to different policy prescriptions. If policies represent a combination of numerous values, which values are deemed most crucial will afford a greater appropriateness to some policy options than to others. The model, therefore, can cover a lot of inconsistency and contradiction. These points are especially important when assessing the relevance of a welfare model in a changing environment. If the model offers a picture of reality, and reality changes, does the model do the same? If the model is strict in its connection between values and policy options, then the model would necessarily change, or become irrelevant as policy changed. But, if the model were conceptualized broadly, incorporating values that had very general application, or which even potentially contradict one another, then policy reform need not lead to a change in one’s perception of the efficacy of the model. Rather, one need only adjust the priority given to different values to create an interpretation of the model that would resolve the conflict with the changing policies. This tendency to hold on to comfortable values in a changing world is what I refer to as the path-dependency of an idea. People interpret changes © Blackwell Publishing Ltd. 

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through the perspective of the values they hold dear and seek to shift their ideas to make the changing circumstances fit their expectations. This point has been elaborated more fully by Peter Hall (), who argues that policy paradigms have a powerful effect on people’s thoughts and expectations, and that they are reluctant to alter their paradigmatic views, sometimes even in the face of overwhelming evidence that does not fit the paradigm. Here the causal effect of ideas is not to influence the world, but to alter our individual or collective perceptions of it, so that our value systems are preserved. In practical terms, the result is a conceptual stretching of our ideas to make them accommodate change. David Arter has presented a similar assessment of the Scandinavian model, arguing that what is left of the model following the three decades of welfare reform is really only the “social democratic consensus” that created ideological support for the expansion of welfare states. Arter’s argument, like the notion of path-dependency being sketched here, is that the values and expectations created by Scandinavian welfare states have continued to shape discussions of what constitutes appropriate policy reform. The result is a conceptual reinvention of the ideological priorities that underlie social democratic consensus. Insightfully described by Urban Lundberg and Klas Åmark (), the social democrats have managed to reinvent their interpretation of the model to accommodate change. Where they once argued that their ideological goal was to lead the struggle of labor against capital, Scandinavian social democrats now portray themselves as the globalization vanguard, using the welfare state to keep their economies globally competitive. This “neo-liberalization” of social democracy (Arter ), has been associated with policies of fiscal conservatism and, ironically, liberal parties have voiced support for welfare programs to take advantage of the voter disdain for welfare cutbacks. The path-dependency of the Scandinavian model is a reaction to two types of change. The first is the empirical issue of whether policy reform has marked a change from the model. Whether it has is the question that has dominated much of the literature on welfare reform in Scandinavian countries. The second type of change concerns a broadening of the Scandinavian model itself. On this point, the model has been subject to less critical reflection. Narrow conceptions of the Scandinavian model lend themselves to specific policy prescriptions. Recently, broader conceptions of the model have appeared which outline general principles that are sometimes vague, or which offer new first values in place of the older ones. And these changing conceptions of the model can occasionally lead to contradictory policy prescriptions.

Core Values of the Scandinavian Model Most definitions of the Scandinavian model of welfare identify three fundamental values that inspire welfare policies: universality, solidarity and market independence (decommodification). In terms of policies and programs, however, how these principles are implemented becomes a matter of difference in interpretation. Universalism is the fundamental principle of the Scandinavian 


model. Universalism exists when welfare programs are available to all citizens. But there are sharp differences between narrow and broad conceptions of universalism. According to the narrow definition, universalism requires that welfare benefits be available to all citizens. This definition excludes programs that require means-testing or which target certain populations as violating the principle of universalism (Rothstein ). A broad conception of universalism, by contrast, focuses on the nature of the entitlement rather than the benefit. Joakim Palme’s conception of universalism posits not only that entire populations should be covered within the same framework, but also that benefits and services should be adequate enough to really provide protection for people in different situations and with different income levels. In order to make the system of protection work in practice, it is vital that we find techniques that, in essence, help to increase the number of tax-payers and, whenever possible, to decrease the number of benefit recipients. (Palme : ; emphasis added) Palme clearly distinguished between programs that provide coverage to everyone and those that actually provide benefits to every citizen. The narrow conception of universalism is often applied to social insurance programs, while the broader conception includes other programs such as universal health care where everyone is covered, but only sick people receive a benefit. Moreover, as Bo Bengtsson has noted in his discussion of social rights in the area of housing policy, the distinction between universal and selective can quickly become muddled at the level of program operation (Bengtsson ). Indeed, Walter Korpi and Joakim Palme (  ) have argued that a mixture of programs that provide universal benefits and those that provide means-tested benefits constitute a stronger overall floor for social protection, and greater security for the universality of the system. At this broad level of conceptualization, however, it is hard to distinguish the universalism in Scandinavia from universalism in any other country, except on the level of generosity in the system (Hicks ). At the broad level of conceptualization, the Scandinavian model is distinctive because it provides more services and because they are often more generous than in other countries (Greve ). More things such as day care, elder care, employment and other services are available in Scandinavia, but their mechanisms of delivery are varied and not really different from how universal services are provided in countries that represent other welfare models. Applying the broad conception to his assessment of welfare reforms in the s, Stein Kuhnle () concludes that despite reductions in benefits across a number of programs, the basic universalism in those programs has been preserved. The second value, solidarity, encourages the creation of programs that break down class divisions or regional disparities. Solidarity builds upon universalism, because if all citizens are entitled, then the maximum scope for solidarity can be reached. Again, narrow conceptions of solidarity are programspecific while broader conceptions offer vague outlines for policy. Narrow conceptions of solidarity focus on the degree to which programs achieve © Blackwell Publishing Ltd. 

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redistributive ends, because redistribution demonstrates a commitment to the least well-off in a society. Broader interpretations of solidarity are employed to justify programs that do not redistribute but that create political coalitions across classes. For example, earnings-related pensions in Sweden do not have a redistributive effect, but many observers have noted that they help to create strong political coalitions in support of the program by giving the middle class and working class a common interest in maintaining the program (for example, Rothstein ). But there is conceptual stretching in this broad interpretation. The concept of solidarity, which in a narrow sense signifies an affective attachment between people, is expanded to include coalitions of material interests in this broader sense. Davidson () argues that this broad conception of solidarity in Sweden should be distinguished from Anglo-Saxon egalitarianism, which he attributes to programs that promote redistribution. Finally, the principle of decommodification has been an important value of the Scandinavian model. This awkward term refers to the ability of Scandinavian citizens to live independently of the market, because their personal choices are not governed by market considerations. Narrow conceptions of market independence focus on the micro conditions of individuals. For example, high-income replacement rates in pension schemes allow people to enjoy an accustomed standard of living regardless of their employment status, and generous universal benefits allow people to participate meaningfully in society. According to Bo Rothstein, freedom from the market “means that social programs such as old-age pensions, health care, childcare, education, child allowances, and health insurance are not targeted to ‘the poor,’ but instead cover the entire population without consideration of their ability to pay” (: ‒ ). User fees, particularly in health care, are specifically excluded from this narrow conception because such fees restrict the ability of some citizens to enjoy the services. Broader interpretations of freedom from the market, by contrast, focus on the macro-economic relationship between the public and the private sector in the Scandinavian model and argue that the success of the model lies in the ability of generous, universal programs to crowd out private alternatives for the same services. A broad conception of freedom from the market says nothing about which services must be provided, only that when they are available, they must be provided by the state rather than the private sector (Furniss and Tilton : ). User fees are less problematic for this broad conception of freedom from the market, if the fees merely strive to contain costs and do not preclude someone from enjoying the service (Palme ). Thus, the basic values of the Scandinavian model lend themselves to narrow or broad interpretations. Moreover, when combined, the importance given to one value over another in evaluating a specific program can vary substantially. By combining narrow and broad conceptions of the different values, a wide variety of interpretations can be given to the reforms of the s. This becomes even more pronounced if we consider the number of policy areas over which narrow or broad conceptions of the model can be applied. 


Policies and Programs of the Scandinavian Model Universal pensions Universal pensions are a form of income support crucial to the Scandinavian model. Narrow conceptions of the model argue that in order to be universal, pension benefits must accrue to all citizens, regardless of market position. This speaks in favor of flat-rate pensions that provide equal benefits to all, a situation closest to the Danish example. Typically excluded from narrow conceptions of pensions are means tests, which target the poor. Occupying a curious position in conceptions of the Scandinavian model are contributory pensions, specifically the Swedish ATP. This pension provides benefits to all members of the workforce, but there are differences in the level of benefits, based on one’s own history of pension contribution. On this count it violates a narrow conception of solidarity. On the other hand, it meets the requirements for a broad conception of solidarity on largely historical grounds. As Bo Rothstein states, the ATP historically was important for creating a bond between the working and middle classes by creating a program from which all could benefit (, ). Some observers, like Rothstein, see this as a program that builds social solidarity. Others claim that it is simply a selective benefit that appeals to the special interest of the middle class, not their fondness for solidarity (Baldwin ; Gal ). This broad definition allows for a more generous interpretation of changes to pension schemes, which were dramatic in both Sweden and Denmark. In both countries, pension reforms were based on the carefully drafted recommendations of special commissions. For example, Denmark caught up with Sweden’s example by introducing a contributory pension scheme. Some have declared this new program a departure from the universalism of the Danish pension system. Others see it as an improvement to the model that brings it in line with the Swedish case by helping to crowd out private alternatives. At the moment, the size of the Danish contributory scheme is small, but adherents to each interpretation have argued that its future impact will be great (Andersen and Larsen ; Christiansen and Petersen : ). In Sweden, the earnings-related ATP was transformed into a defined-contribution scheme (Anderson ). Universalism has been preserved, but government projections indicate that most future pensioners will have lower pensions under the new system (ibid.). In both countries, the potential controversy of these dramatic reforms was mitigated by two factors. First, the changes are being phased in slowly over time, and will not be fully felt for twenty years in Sweden, and thirty years in Denmark. Second, many of the most controversial reforms were so complicated that they were overlooked in the public discussion and therefore escaped scrutiny. New targeting in social services Another reform to Scandinavian welfare states is the effort to improve the efficiency and reduce the cost of social services, the most distinctive programs of the Scandinavian model. To a greater degree than under any other welfare © Blackwell Publishing Ltd. 

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model, Scandinavian welfare states provide social services on a universal basis. However, many concerns have been expressed about the costs of these services and their potential to dampen people’s incentives to work or care for each other (Sørensen ; Rothstein ). In response to these concerns, governments have introduced three types of reforms: to improve bureaucratic efficiency, to discourage take-up from people who do not need the services, and to improve the incentives to work. The effect of these reforms often has been to limit the universality of services, either by forcing some to pay for them, or by connecting the universal right to the acceptance of a new responsibility. In Sweden and Denmark, for example, there is now a curious paradox. Social democrats, who control governments, have justified these reforms on the grounds that they target the assistance at those most in need of support. Liberals, by contrast, have opposed targeting because it adversely affects the benefits enjoyed by middle-class citizens, who tend to vote for liberal parties (Green-Pedersen ). Those who favor targeting defend it as a way to preserve solidarity by making it possible for most resources to be devoted to those most disadvantaged. However, those who see these changes as a departure from the Scandinavian model decry the introduction of targeting as a violation of universality. They argue that in countries where targeting is more prevalent, such as Australia and the United States, solidarity is eroded because targeted programs stigmatize their recipients and are underfunded due to a lack of public support (Korpi and Palme ). At the center of this dispute is a disagreement over which value of the Scandinavian model has highest priority. Those who place universality paramount oppose targeting. Those who see solidarity as the primary value are willing to allow for variations in benefits in order to ensure the most disadvantaged are given assistance. The Scandinavian model is broad enough to provide a defense for each interpretation, even though they are in conflict with one another. Labor market reforms Labor market reform has been another area of dramatic change in Sweden and Denmark. During the “golden age” of the welfare state, full employment was made possible by, and in some cases generated by, the welfare state. Strict job tenure rules limited the capacity of employers to reduce their workforce. Generous job training programs allowed the skills in the workforce to respond to pressures for structural adjustments in the economy. Deregulation of the labor market is reducing many of these conditions. Opportunities for more flexible labor contracts are eroding the security of employment, especially for younger workers first entering the labor market. Financial pressures are prompting political leaders to take a closer look at the perverse incentives in retraining schemes that made these programs function as hidden unemployment schemes. Labor market deregulation allows for more flexible contacts. The key feature of the reform has been the introduction of active labor market programs, especially in Denmark. Active labor market policy has 


been defended by asserting that there is reciprocity between social rights and social obligations. The Danish legislation is clear in stating that the right of citizens to work creates an obligation on the part of the state to provide opportunities for employment. In practice, this allows municipal officials to provide offers of work to citizens, which they must accept because the other part of the right to work entails an obligation on the part of the citizen to accept any reasonable offer of employment (Cox ). Since the  Lisbon summit of the European Union declared them a desired direction for future reforms, active labor market measures have had growing significance in Scandinavia. Yet there is a debate among scholars as to whether these new measures actually alter the Scandinavian model. The strictness of the work requirements does serve to “recommodify” labor and establish a more punitive environment for the long-term unemployed (Larsen ). However, many observers have argued that these criticisms are overstated. Such work requirements have always been in place in Sweden, where active labor market programs have been a core component of the welfare state for many years. In Denmark, where the programs were a new innovation in the mid-s, many have argued that despite their neo-liberal characteristics, they actually serve as a crucial device to transform the skills of the labor force. Therefore, they are an innovation in keeping with the proactive tradition of the Scandinavian model (Torfing ). Yet there is no way to resolve the question whether active labor market policies fit the Scandinavian model. Because they were historically absent in Denmark, they do not fit with that country’s welfare tradition. On the other hand, they were a core component of the Swedish welfare state, but their absence elsewhere makes it awkward to place them in the center of the model (Schwartz ). This ambiguity allows for a variety of interpretations of these reforms, and these interpretations do not distinguish neatly between narrow and broad conceptions of the model. Decentralization of wage bargaining One of the occasionally overlooked features of the Scandinavian model is a system of centralized wage bargaining. Centralized wage bargaining is a combination of norms and institutions that ensure workers and employers strive both to keep wages relatively close together and to support legislation to establish uniform social benefits. Centralization of collective bargaining allowed for two important results. First, it allowed for greater consistency across the entire economy. This worked in the interests of macro-economic planning because it provided a powerful mechanism for ensuring conformity to economic goals. For example, centralized collective bargaining ensured smaller discrepancies in wages across sectors and industries. Also, it encouraged compliance with macro-economic goals, such as wage restraint (Huber and Stephens ). Second, as a feature of the welfare state, centralized bargaining helped to create broad-based support for legislation to create social benefits. Peter Swenson () has outlined the economic logic of this. To state his finding briefly, the norms and institutions of centralized bargaining enforced a © Blackwell Publishing Ltd. 

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commitment to relatively uniform wages, forcing employers to compete for labor on the basis of social benefits. However, to avoid the adoption of endless private social benefits, thereby undercutting the purpose of wage solidarity, both employers and workers found it in their interests to support the adoption of legislation that would create uniform and transparent social benefits. Thus, a cross-class coalition worked to create universal social programs that also maintained solidarity in the work place. Since the s, however, there has been a pronounced decentralization of wage bargaining, especially in Sweden (Iversen ). Wage bargaining in Denmark underwent what appeared to be a period of decentralization, though some observers argue that the Danish pattern was little more than a shift from bargaining within peak associations to bargaining within five cartels that continue to maintain a commitment to wage solidarity (Wallerstein and Golden ). Despite the patterns of decentralization in bargaining, the outcomes of wage solidarity seemed to have been preserved. Relative to other countries, wage inequality in Scandinavian countries continues to be small (Wallerstein ). The same is true of welfare benefits that derive from wage bargaining, such as social insurance. These programs have preserved their solidaristic components. Yet effects from decentralization are visible at the micro level. Decentralization changes the way the norm of fairness is applied to discussions about compensation and benefits. Centralized bargaining institutions have the effect of setting a norm of fairness at the macro level. Decentralization, by contrast, introduces a norm of fairness based on a worker’s usefulness to the firm. One example of this micro logic is apparent upon closer examination of the Danish case where the cartelization of wage bargaining actually allowed skilled unions to break out of arrangements that tied them to unskilled unions. Because their greater usefulness to the firm awarded skilled unions stronger bargaining positions than unskilled unions, they were able to negotiate better packages of compensation through sector rather than centralized bargaining. Thus more decentralizing in the bargaining system is likely to bring with it a growing spread in wages. In Scandinavia this pressure has been moderated by the strong social norms in bargaining that enforce compliance with wage solidarity. However, there is growing pressure to provide other forms of compensation outside of wages, for example, by developing more flexible labor contracts (Iversen ; Pontusson and Swenson ). Such individualized forms of non-wage compensation would seriously undermine the Scandinavian model. But, because they are more difficult to monitor, especially in decentralized regimes, there is little systematic evidence of their extent. This presents a dilemma for those who assess the continuing viability of the Scandinavian model. If one takes a standard view of the Scandinavian model and simply looks at traditional outputs of centralized bargaining, such as wage inequality, one is likely to find confirmation that the model is intact. But if one takes a broader view of the model and searches for evidence of growing disparities in non-wage compensation, one might find evidence that the model is being undermined. This article only provides a speculation, rather than evidence, but the speculation offers a caution to those who might 


quickly claim that the model remains intact. During the s employers and some workers have been keen to find alternative forms of compensation other than wages. Scholars need to pay attention to these and their effect on solidarity in the work place. Decentralization of government administration During the s, governments across Scandinavia undertook to reform their public administrations. The structure of local government was reformed and streamlined in Denmark and in Sweden, a process that rationalized a system of local administration that still preserved vestiges of its medieval origins. Local government has been the primary provider of social services, and consequently a major employer in all countries. Two major objectives in much of this restructuring were to realize administrative efficiencies and to make the public administration more democratically accountable (Lane ). An important reform that affected the provision of welfare services was the devolution of more program authority to the local level (Burkitt and Whyman ). Inspired by a concern over the “faceless” character of formal rules, local officials were awarded more discretion to take into account individual circumstances when awarding assistance. But granting local authorities more discretionary power increased the likelihood that universal standards could not be preserved. One of the original inspirations for universal standards was to ensure that all citizens were treated equally. However, this had the perverse effect of creating uniform rules that permitted no consideration for individual needs, or even local variations in needs. Decentralization delegated more authority to local officials, allowing them more freedom to set rules to fit their local circumstances. However, it also allowed citizens to be treated differently depending on where they resided (Villadsen ). Here, the dictates of universalism were thwarted by a concern for doing what is locally appropriate. For example, in the implementation of active labor market policies and social assistance, some localities have imposed stricter conditions than have others, at least in Denmark (Cox ). Yet there is a dispute over what effect this decentralization of authority has had on the Scandinavian model. Johansson and Borell () argue that administrative decentralization has not led to the loss of central control over policy-making. Instead, it has changed the role of central authorities from director to facilitator. In short, how the process of administrative decentralization affects the Scandinavian model is also open to a variety of interpretations. If one takes a narrow view of universalism, one expects the uniform application of national standards to prevail. However, if one takes a broader view, not tied to any specific administrative formula, also any process of reform is compatible with the model.

Conclusions The debate over the impact of austerity on the Scandinavian model is lively, but is ultimately irresolvable. The difficulty stems from the fact that the Scandinavian model is not a precise formula, but a broad guideline for the © Blackwell Publishing Ltd. 

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construction of a welfare state. Within this broad guideline, there is a potential for conflict among the basic values that inspire the model. This conflict can allow scholars to develop widely diverging interpretations about the appropriateness of some welfare reforms. The broader the conceptualization of the Scandinavian model, the greater the likelihood that any reform will conform to at least one of the primary values of the model. The willingness of people to accept the value contradictions in the model and even to exploit these in defense of almost any reform is what I refer to as the stickiness of the model’s reputation. Because the values are so highly regarded, scholars and policy-makers are compelled to justify their observations and proposals for reform by making reference to those values. To the extent that these justifications find acceptance, the more they stretch the application of the core values, the greater the degree of conceptual stretching that comes to characterize the model. An ideational perspective helps us grasp the salience of this argument. Most frequently, scholars study the welfare state through class-conflict or institutional perspectives. In many cases, the role of values and ideas in structuring the preferences of actors has either been assumed to be unproblematic (e.g. most adherents to the Scandinavian model) or has been studiously ignored (Pierson ). Those who have sought to include values in the formulation have done so largely as an endogenous variable. Because the ideas and the values of the welfare state have not been considered central, when they have been incorporated into explanations of the Scandinavian model, they have been defined in inconsistent ways. Ultimately, the Scandinavian model is not a formal model that lends itself to rigorous analysis (Goodin and Rein ). Indeed, it is not even the Weberian “ideal type” that has a few core characteristics (Wincott ). According to Max Weber, real-world examples never completely correspond with the type, but they should approximate the core characteristics. Instead, the Scandinavian model has developed such ambiguous definitions that it is little more than a descriptive label for the welfare systems that exist in Scandinavian countries. Due to changing policies, and the desire to view these changes in light of the idea of a model, the model itself has been shot full of contradictions and inconsistencies. Yet the Scandinavian model continues to have considerable power to structure the beliefs, expectations and political strategies of people in many countries. Even outside of Scandinavia, the idea of the model is invoked by welfare opponents as an evil to be avoided, and by welfare advocates as a civilized example towards which to strive. At this level of abstraction, however, the correspondence between the ideal of the model and the real world of policy is not important. Important is the fact that people believe in the model and that they shape their goals on those beliefs. This is the path-dependency of the Scandinavian model.

Acknowledgements Two earlier versions of this paper were presented at the Structure of Governance Conference, Washington, DC,  May  and the th Annual 


Meeting on Socio-Economics, LEST, Aix-en-Provence, France,  –  June . I am grateful for comments from Graham Wilson, Bert Rockman, Harvey Feigenbaum, Joel Aberbach, Scott Greer, Bent Greve and Cathie Jo Martin.

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