An Essay on Welfare State Dynamics

Abstract

The expansion of welfare-state arrangements is seen as the result of dynamic interaction between market behaviour and political behaviour, often with considerable time lags, sometimes generating either virtuous or vicious circles. Such interaction may also involve induced (endogenous) changes in social norms and political preferences. Moreover, the internationalisation process not only limits the ability of national governments to redistribute income; they also increase the political demands for international mobility of welfare-state benefits and social services. I also discuss the dynamics of reforms and retreats of welfare-state arrangements.

A Flexicurity Labour Market in the Great Recession: The Case of Denmark

“…Lindbeck (1995) and Lindbeck et.al (2003)). A strong norm to be self supporting counters the economic incentives created by a generous scheme.…”

Economic crisis and morale

“…In addition to the micro-characteristics, several country characteristics have been scrutinised, among them decentralization and fiscal autonomy (Torgler and Werner 2005) and direct democracy (Pommerehne and Weck-Hannemann 1996) for tax morale or the size of the welfare state for benefit morale (Heinemann 2008;Halla, Lackner et al 2009). The latter contributions support Assar Lindbeck's concerns that the build-up of the welfare state undermines the very norms on which the welfare state is based (Lindbeck 1995a). Lindbeck's reasoning is that generous transfer schemes will increase the individual costs of respecting a norm.…”

“…Numerous applications exist, e.g., for the beneficial impact of tax morale on actual tax payments (Frey and Feld 2002;Torgler 2002). (Lindbeck 1995a) argues that social norms impact on the take up rate of social benefits, job search activities, level of reservation wages, workers' absenteeism or applications for early retirement. (Algan and Cahuc 2005) stress that moral hazard issues of unemployment insurance are more serious in countries where people tend to cheat on the rules of the system.…”

“…Even small variations in individual behaviour can trigger major shifts (Young 2007). The problem of a gradual norm erosion is discussed for the welfare state, where (Lindbeck 1995a) stresses the possibility, that the build-up of the welfare state may on the long-run undermine its normative base.…”

Intersections. Eejsp_vol2_no2

“…In such a view, the "WE-ST" emerges, by and large inexplicably-like Pallas Athene in Greek mythology, in full armor, from Zeus' head-as a phenomenon sui generis. There is a strong tendency, especially among scholars in Europe, to see this as an organic "civilizational" achievement on part of the "West" (Lindbeck, 1995;Korpi and Palme, 1998;Robinson and Bell, 1978) moral phenomenon sui generis and, hence, a "civilizational" feature, that implies that the phenomenon requires no proper historical contextualization beyond pointing atand presumably, celebrating, or, more rarely, from neoliberal perspectives, lamenting -its very existence. In this context, the very act of raising the question of the world-historical conditions in which the "WE-ST" appeared might appear heretical to some.…”