Rediscovering social investment in developmental welfare state ...

R E D I S C O V E R I N G S O C I A L I N V E S T M E N T I N D E V E L O P M E N T A L W E L F A R E S T A T E P O L I C I E S :
B A C K T O T H E F U T U R E
language or lexicon that prevails in the welfare state literature. 6 What follows is an abbreviated
intellectual chronology that begins with the desire to explain the bumblebee anomaly, attempts to
account for our failure to do so, and explicates the need for a new perspective.
Conventional economic logic suggests that there is a tradeoff between efficiency and equality (Okun,
1975). Consistent with this perspective, some countries achieve high efficiency along with high
poverty, while others attain low poverty at high economic cost. Yet some countries do not fit this
pattern and are able to achieve very low levels of poverty with relatively high levels of economic
efficiency. Why are Northern European countries in particular, analogous to the bumble bee that is
able to fly when by conventional economic logic, it should not (Persson, 2000)? 7 Generally, evidence
for the negative impact of welfare states on economic performance is mixed and any productive
benefits of social policy remain relatively poorly understood (Goul Andersen, 2007). As Korpi
(2005) notes, ―the fact that theoretically predicted negative effects of taxes and welfare states are
very difficult to verify in areas where they are most likely to turn up and in which we also have
empirically useful data should generate discussion on the theoretical foundations of these
hypotheses‖ (p. 207). The problem, as Hagen and Sitter (2006) note, is that ―the empirical evidence
is used to refute the neoliberal recipe of how economic efficiency is (or should be) produced,
without, however, being able to identify what mechanisms explain better what is observed‖ (p. 3). 8
The case of the bumblebee, in which a static object is governed by different stability laws than a
dynamic object, poses a challenge to theoretical oversimplifications that sometimes occur in
economics (Lindert, 2004b). Explanations for anomalous outcomes have yet to be developed.
An integrative assessment and synthesis of the relevant literature reveals that (1) welfare states face a
variety of pressures and dilemmas, (2) there is a long legacy of conceptual ambiguity surrounding the
6 Nordic researchers such as Kangas and Palme (2005) have begun to focus on the developmental aspect of social policy.
In particular, they study how to bridge the divide between development studies and study of the welfare state and
explore how social policy may facilitate economic development. However, these efforts have not explicitly revisited the
social development literature or attempted to define developmentalism in the context of comparative welfare state
research. Kangas and Palme (2005) is part of the UNRISD series, Social Policy in a Development Context, which examines the
ways that social policy can be instrumental to economic development while maintaining its goal of social protection and
equity. In a recent report by the Institute for Futures Studies (Morel, Palier, & Palme, 2009), the social investment
paradigm is identified as the defining feature of the new welfare state and it suggests the need for new strategies for
achieving equality with growth. In contrast, developmentalism—as I redefine it here—is concerned with the types of
policies that Myrdal historically saw as investments in the population and as a complement to the social rights
perspective (Lindh, 2009).
7 In remarks before the Social Democratic Extra Party Congress in Stockholm, 10–12 March 2000, likening the Swedish
welfare state to a bumblebee, former Swedish Prime Minister Göran Persson, suggested that ―with his altogether too
heavy body and thin wings he should not be able to fly,‖ but he noted that ―all the same he does.‖ According to 20th
century folklore, the laws of aerodynamics prove that the bumble bee should be incapable of flight, as it does not have
the capacity (in terms of wing size or beat per second) to achieve flight with the degree of wing loading necessary, and
yet, not being aware of scientists proving it cannot fly, the bumblebee succeeds. John McMasters (1989) recounted an
anecdote about an unnamed Swiss aerodynamicist at a dinner party who performed some rough calculations and
concluded, presumably in jest, that according to the equations, bumblebees cannot fly. In later years, McMasters backed
away from this origin, suggesting that there could be multiple sources, and that the earliest he has found was a reference
in the 1934 French book Le vol des insectes by M. Magnan. Magnan is reported to have written that he and a M. Saint-
Lague had applied the equations of air resistance to insects and found that their flight was impossible, but that ―One
shouldn‘t be surprised that the results of the calculations don‘t square with reality.‖ It is believed that the calculations
that purported to show that bumblebees cannot fly are based upon a simplified linear treatment of oscillating aerofoils.
The method underestimates the additional lift generated by the bumblebee‘s wings that allow it to fly.
8 See Johnson (2010) for a more extensive discussion of the mixed economic evidence.
C E N T E R F O R S O C I A L D E V E L O P M E N T
W A S H I N G T O N U N I V E R S I T Y I N S T . L O U I S
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