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Welfare Notes

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This is an extract of our Welfare document, which we sell as part of our Political Sociology Notes collection written by the top tier of Oxford students.

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POLITICAL SOCIOLOGY WELFARE What explains the significant variations in welfare state regimes across countries?
Ethnic Versus Cultural Differences - Forms of Ethnic Diversity and Public Goods Provision: Baldwin
& Huber
- Their study found that between-group inequality (BGI) had a negative relationship with public goods provision, whereas ethnic and cultural fractionalisation did not1. BGI is a ranking of ethnic groups by their mean income; like the Gini, it is measured on a scale from 0 to 1, with 0 being perfect income equality and 1 perfect inequality.
- When BGI is controlled for, the overall level of inequality has no impact on public goods provision. It is possible that the two are mutually reinforcing; low public goods provision increases BGI, which impedes improved public goods provision.
- The World Bank uses ten variables to measure public goods provision: 1) Primary education spending per student. 2) Total education spending per student. 3) Immunisation, measles. 4) Immunisation, DPT. 5) Sanitation. 6) Water provision. 7) Road provision. 8) Contract enforcement. 9) Tax revenue as a % GDP. 10) Phone line provision.
- Unsurprisingly, public goods provision was highly correlated to GDP per capita.
- Geographic isolation makes the provision of public goods more difficult. Policy Makes Mass Politics: A.L. Campbell
- Benefits that are traceable and discernible to government action are more likely to create positive political feedback effects - the state pension being the pre-eminent example. When benefits are highly visible, protective constituencies emerge around them2.
- The majority do not envision using welfare provision themselves, and are therefore less supportive of the programmes.
- Government policies are meant to be responsive to the preferences of citizens, but modern welfare preferences are the result of previous government policy. Some citizen's preferences are much more likely to be expressed in policy than others. The Structure of Inequality and the Politics of Redistribution: Lupu & Pontusson
- Inequality matters when we consider redistributive politics in advanced economies, but the structure is more important than the level. This study hypothesises that middle- and low-income voters will ally to support redistributive policies when the gap between these two socio-economic groups and the rich is wide. Survey evidence supports this theory, and also suggests that leftleaning parties are more likely to participate in government in an environment of significant income inequality3.
- Racial and ethnic diversity can be an obstacle to redistributive politics, because social affinity is a determinant of preferences for redistribution; if minorities comprise a significant proportion of the poor, the majority is less likely to support redistribution. Lupu and Pontusson posit that if there is significant income skew then the structure of distribution is more important than its complexion.
- Majoritarian rather than proportional electoral models are less likely to result in redistributive policies as the middle-classes are more closely aligned to the first preferences of the rich than the poor. 1 Ethnic Versus Cultural Differences - Forms of Ethnic Diversity and Public Goods Provision: Baldwin &
Huber 2 Policy Makes Mass Politics: A.J. Campbell 3 The Structure of Inequality and the Politics of Redistribution: Lupu & Pontusson

- Their study if OECD data revealed that nations with the highest income distribution skew also had the highest levels of social spending. Counter intuitively, they found that sustained unemployment and proportional electoral rules coincided with lower levels of social spending. Long-term unemployment undermines the political participation of those likely to advocate increased social spending.
- Skew in the US had increased from 0.99 in 1986 to 1.12 in 2001, and yet there has been no significant agitation for increased income redistribution. The fact that racial minorities are concentrated in lower socio-economic groups, and the polarisation of US politics, offer some explanation for this. Political Polarisation and the Size of Government: Lindqvist & Ostling
- They study the relationship between political polarisation/dispersion and public spending, the former being strongly associated with smaller government in democratic countries.
- Decision making is more difficult when the ideological difference between political parties is large, as discussed in veto player theory.
- Polarisation is increased by a variety of factors, including ethnic fragmentation and income inequality. Developing nations typically exhibit far higher levels of polarisation than developed.
- There is more polarisation amongst Republican supporters in the United States than in the entire Swedish electorate.
- Veto Players - In theory, polarisation leads to fewer changes in government spending levels, but there is more ambiguity when it comes to its impact on overall spending4.
- Strategic Incumbents - Incumbents who are uncertain of their future election will legislate to restrict the choices of future governments; the greater the polarisation of parties, the greater the incentive to behave in this way5.
- Two-Stage Voting of the Budget - Disagreement about how to spend money allocated for public goods leads to a preference for lower levels of spending.
- The income of the median voter tends to be above the median income for the population, meaning that those most likely to advocate increased social spending are less likely to vote. Globalisation, Veto Players, and Welfare Spending: E. Ha
- Integrated world markets have had an impact on welfare expenditure, pressuring states to increase spending. However, those states which are most politically polarised are more resistant to upward spending pressure6.
- There has been a vigorous debate over the impact of globalisation on welfare spending. One school argues that competitive demands and free movement of labour create downward pressure on spending. The other argument focuses on the economic fragility of a domestic economy in a globalised marketplace, and the concomitant need to increase welfare spending. Ha seeks data to support either thesis.
- Maintaining open markets and a prosperous economy whilst retaining high levels of welfare provision can be viewed as potentially conflict goals.
- Welfare expenditures, predominantly state pensions and unemployment benefits, are popularly measured as social security transfers as a percentage of GDP.
- Domestic political institutions and the existence of large numbers of veto players can limit the effect of globalisation on welfare spending. In the US, the clear separation of Executive and Legislature creates two distinct veto players; in the UK, their co-existence makes legislative passage simpler. The EMU was expected to restrict welfare expenditure, as rules dictating deficit spending forced members to more tightly control fiscal policy. These rules proved to be no constraint whatsoever. 4 Political Polarisation and the Size of Government: Lindqvist & Ostling 5 Political Polarisation and the Size of Government: Lindqvist & Ostling 6 Globalisation, Veto Players, and Welfare Spending: E. Ha

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