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Welfare Reform on the Web (April 2009): Welfare state - overseas

Development, democracy and welfare states: Latin America, East Asia, and Eastern Europe

S. Haggard and R. Kaufman

Oxford: Princeton University Press, 2008

After World War II, communist regimes in Eastern Europe adopted wide-ranging socialist entitlements while conservative dictatorships in East Asia sharply limited social security but invested in education. In Latin America, where welfare systems were instituted earlier, unequal social security systems favoured formal sector workers and the middle class. The book compares the distinctive welfare states of Latin America, East Asia, and Eastern Europe, traces the historical origins of social policy in these regions to crucial political changes in the mid-twentieth century, and shows how the legacies of these early choices are influencing welfare reform following democratization and globalization. Although these transformations generated pressure to reform existing welfare systems, economic performance and welfare legacies exerted a more profound influence. The book shows how exclusionary welfare systems and economic crisis in Latin America created incentives to adopt liberal social-policy reforms, while social entitlements from the communist era limited the scope of liberal reforms in the new democracies of Eastern Europe. In East Asia, high growth and permissive fiscal conditions provided opportunities to broaden social entitlements in the new democracies.

Governments and unpopular social policy reform: biting the bullet or steering clear?

B. Vis

European Journal of Political Research, vol. 48, 2009, p. 31-57

Welfare state reform is politically risky and difficult. The core programmes of the welfare state receive wide electoral support, which makes curbing them unpopular and politically dangerous. This article examines under what conditions and to what extent governments pursue unpopular, and hence risky, reforms using insights from prospect theory (a psychological theory of choice under risk). It is argued that if a government enjoys a comfortable socio-economic situation and/or a safe political position (eg a large parliamentary majority), it displays risk averse behaviour and shies away from pursuing unpopular measures. On the other hand, if a government faces a deteriorating socio-economic situation and/or a weak political position (eg a fall in the opinion polls), it accepts the risk of pursuing unpopular reforms. Empirical analysis shows that a deteriorating socio-economic situation is necessary for the initiation of unpopular reforms, in combination with either a deteriorating political position or a cabinet of rightist composition.

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