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
interest was focused on predictors of welfare state development. Over time, with the diffusion and
elaboration of welfare state programs, understanding of the welfare state became more nuanced and
refined, reflected in part in the movement toward typologies. Similarly, as the welfare state came to
be seen as having varied forms, this raised scholarly interest in the types of policies (or regimes)
most successful in reducing poverty. While there has been gradual progress in delineating or
disaggregating aspects of welfare state effort and effects, the gap between what we know about its
harmful versus beneficial aspects has not substantially narrowed. Current socioeconomic
circumstances have led to fresh questions about whether different types of welfare state policies can
have positive effects with minimal costs. I argue that a potential fourth generation of research should
be denoted by explicitly analyzing productive outcomes alongside distributive ones. As such, I would
suggest that a fourth generation has not yet coalesced. There is no coherent theoretical framework
for rethinking welfare state effort in terms of its impact on outcomes beyond but associated with
income poverty and inequality. In other words, there is no theoretical framework, beyond those that
have guided welfare state research for decades, which informs thinking about the implications of
poverty for economic development, systematically considering social protection as a productive
factor, and exploring the possible economically beneficial impact of welfare state effort. 10
While each generation of research is examined in greater detail in Johnson (2010), we can clearly
discern and briefly state some central research findings. What do we know? In the broadest terms we
know that social policy appears to have a positive effect on reducing poverty above and beyond
macroeconomic conditions. There are wide crosscountry differences in the level and mixture of
public and private expenditure. Similarly, there remains a diversity of outcomes across countries in
terms of both poverty rates and economic performance. Select crossnational research findings show
substantial differences in levels of market poverty and also show, despite relatively similar levels in
welfare state spending, posttax/transfer poverty rates vary considerably; as noted above, only mixed
evidence supports the notion of a uniform efficiency-equality tradeoff. It appears that what happens
within social expenditure matters as much for reducing poverty and inequality as overall government
spending. However, we do not know much about which policy combinations or clusters are
particularly beneficial in avoiding poverty with minimal economic costs, and whether this is true
across countries and their varied institutional contexts. Recognizing the link between variations
within expenditure and diversity in economic and social performance across countries can aid
understanding of whether and how the welfare state contributes to economic performance.
While we are beginning to understand the variety of potential effects of the welfare state, and to see
some connections between welfare state effort and the varied effects, what is missing is a conceptual
framework for thinking systematically about how welfare state effort and effects are related. We
need to clarify which types of efforts should have which effects. Arguably, what is most problematic
about existing approaches to thinking about the welfare state and what it produces, and hence why
there is a need for a new perspective, can be summarized in terms of three metatheoretical concerns:
1) limitations of ways that welfare state effort has been measured; 2) limitations in the welfare state
outcomes that have been examined, e.g., narrowness of outcomes and weak measurement; and 3)
the consequences of thinking about welfare state arrangements and outcomes separately.
10 Research remains confined to distributional outcomes and does not explicitly deal with the productive implications of
distribution or how the possibility of social protection as a productive factor might lead to more theoretically coherent
or predictive thinking about a disparate array of measures of welfare state effort.
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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