The Welfare State in Global Perspective

Over the last few decades of the twentieth century, the literature examining cross-national variation in the development of policies of social protection has been one of the most dynamic Welds of research in comparative politics. The sustained effort of sociologists, political scientists, and economists to understand the causes and consequences of different welfare states has generated a vast literature that is methodologically eclectic and theoretically vibrant. The accumulation of findings in this literature has fruitfully illuminated one of the most significant achievements of modern states: the ability to protect citizens from poverty in the event of sickness, old age, and unemployment.Advanced industrialized economies have been at the center of the empirical investigation of policies of social protection. This was a natural starting point, due to the magnitude and importance of the welfare state in these economies, which accounts for as much as 30 to 65 percent of GDP. Based on these cases, the literature developed important insights by noting that social policies clustered in distinct ‘‘families of nations’’ or ‘‘worlds of welfare capitalism’’ (Esping-Andersen 1990; Castles 1993; Huber and Stephens 2001). Nevertheless, important theoretical disagreement continues to exist about the relative importance of different political factors in explaining the diversity of observed policies and their distributional implications.In this essay, we argue that the most exciting research opportunities in the study of welfare states lie in examining the variation in policies of social protection in developing economies. Scholars of the welfare state need to broaden the scope of their analysis. In recent decades, policies of social protection in many developing economies have experienced a dramatic transformation. Two trends in the evolution of these policies require a systematic explanation. First, welfare states in developing countries have not unilaterally evolved towards a neo-liberal, residualistic model of social protection characterized by limited coverage and a private provision of benefits. While some Latin American countries have partially or fully privatized their old-age insurance programs, other economies — such as those of Taiwan or Korea — have enacted universal social insurance programs granting benefits to all citizens (Wong 2004). Second, we Wnd strong variation across policy areas in the evolution and distributional implications of these policies. In distributional terms, health care policies have been more progressive than have pension policies — an outcome that holds true for policy changes both in Latin America and in East Asia.These recent changes offer an important challenge to welfare state scholars. Are existing theories, based on the examples of advanced industrial economies, able to explain the recent transformations experienced by welfare states in developing countries? Which explanatory variables fare better than others and, if so, why? If existing explanations cannot account for the puzzling outcomes noted above, what should be the building blocks of explanations that can account for the divergence in social policy trajectories? This essay surveys the major approaches employed in study of the welfare state and evaluates the capacity of these theories to explain the bifurcated trajectory of reform experienced by social policies around the world.