Welfare state
There are three main interpretations of the idea of a welfare state:
- A welfare state is a type of government that assumes the primary responsibility for the individual and social welfare of its citizens.
- The welfare state refers to the provision of welfare services by the state.
- Welfare states may be identified with general systems of social welfare. In many "welfare states", welfare is not actually provided by the state, but by a combination of independent, voluntary and government services.
The development of welfare states
Modern welfare states developed through a gradual process, beginning in the late 19th century and continuing through the 20th. They differed from previous schemes of poor relief in their scope and relatively universal coverage. The development of social insurance in Germany under Bismarck was particularly influential. Some schemes, including those in Scandinavia, were based largely in the development of autonomous, mutualist provision; others were founded on state provision.
Examples of early welfare states in the modern world are the Sweden and New Zealand of the 1930s. Changed attitudes in reaction to the Great Depression were instrumental in the move to the welfare state in many countries, a harbinger of new times where "cradle-to-grave" services became a reality in contrast to the harsh mass-poverty of the Depression. In the period following the Second World War, many countries in Europe moved from partial or selective provision of social services to relatively comprehensive coverage of the population.
Welfare provision in the contemporary world tends to be more advanced in the countries with stronger and more developed economies; poorer countries generally have more limited welfare services.
Arguments for and against the Welfare State
Ironically, the idea of a welfare state receives the most criticism in the country with the least amount of welfare services in the developed world - namely the United States. Most of this American criticism revolves around the idea that a welfare state would make citizens lazy and less inclined to work. That is unsupported by the economic evidence; there is no association between economic performance and welfare expenditure in developed countries. (See A. B. Atkinson, Incomes and the Welfare State, Cambridge University Press 1995) R. Goodin et al, in The Real Worlds of Welfare Capitalism (Cambridge University Press, 2000), show that on major economic and social indicators, the USA performs worse than the Netherlands, which has a high commitment to welfare provision.
A second criticism of the welfare state is that it results in high taxes. This is sometimes true, as evidenced by places like Denmark (Tax level of 50.4% in 2002) and Sweden (Tax level of 50.3% in 2002). However, these countries also have high wage economies and high GNPs; high taxes do not imply poor economic performance. In addition, they have a strong system of progressive taxation, which ensures that less burden falls on the poor and middle classes. Also, a lowering of taxes would not necessarily result in more spending money for the average citizen (since a lot of free services would no longer be free).
Finally, there is criticism that welfare services provided by the state are supposedly more expensive and less efficient than the same services provided by private businesses. As a first reply, proponents of the welfare state argue that the purpose of state-provided welfare is to alleviate poverty, not necessarily to be cheaper overall (in other words, they focus on the fact that, in a welfare state, the poor and lower-middle classes receive certain services free of charge, whereas in non-welfare states they would have to pay for those services, and many could not afford them). The "efficiency" of private enterprise is often achieved through "adverse selection" - a refusal to deal with the people in greatest need, because they are more expensive to treat. It is also pointed out that, in countries with less welfare provision (such as the United States), services are substantially more expensive. This is especially true in health care, because of its organisational diversity, its heavy administrative costs, the lack of responsiveness (or "elasticity") of consumer demand to changes in price, and the problems of market failure, such as the large gap in knowledge between doctor and patient. State-run systems like the UK National Health Service are proportionately cheaper, and have better coverage, than market-based systems. (the OECD produces international statistics on health care [1])
Examples of welfare states
- United Kingdom: the Welfare State
- Germany: the Social market economy
- France: Solidarity and insertion
- Sweden: the Institutional-Redistributive model
- Finland: social democratic welfare
- Spain
- Uruguay
- Brazil
- Saudi Arabia
- Australia
- Norway
- Austria
- Canada