Welfare State Retrenchment and Redistribution Strategies

It is common for political scientists to investigate the degree to which partisanship affects public policy. Less common is consideration of the effect of parties maximising policy preferences through time. This paper builds on Pierson’s (1996) “new politics of the welfare state” thesis by arguing that the mode of redistribution — cash transfers versus welfare services and means-tested versus universal — has implications for the degree to which this redistribution can be ‘rolled back’ by a future government. Left-wing parties are seen as acting strategically to maximise the present value of a stream of future policy pay-offs. Ultimately, they are influenced by the probability of a future government reversing their policies. Quantitative analyses of data from 19 OECD countries for the period 1990–2004 support the claim that left-wing parties chose to spend on means-tested cash transfers when they expected future unwanted reforms were less likely, but more universal welfare services otherwise.

WelfareRetrenchment_20091203.pdf — PDF document, 393Kb