Austerity and the welfare state: an introduction

Abstract

Austerity and retrenchment are some of the words that have been used extensively in the public debate as well as in the academic literature on the development of welfare states during the last few years. They were first mainly used in the context of the consequences of the economic crisis in the 1970s of stagnation and inflation. Expressed among other things from the OECD publication on The Welfare State in Crisis (OECD 1981), among others. With Keynesian economic steering discredited by the then economic crisis, there was room and opportunity for other forms of economic policy, especially with a focus on monetary policy. Liberal and neoliberal understandings gained weight and it has even been argued that welfare states were in times of permanent austerity (Pierson 2002). This is in line with the debate on the legitimacy of the welfare states, including level of benefits and whether or not to support the middle class (Oorschot and Roosma 2015;Roosma et al. 2017), and questioning the legitimacy of spending as a policy strategy as it is easier to make cuts if the welfare state does not have a sufficiently high degree of support among the population (for this, read voters).Crisis in welfare states has been argued to be caused by a wide range, albeit often very different kinds, of reasons, such as change in demography, technology, globalization, migration, legitimacy, ability to finance and so on. The financial crises from 2009 onwards are thereby just the latest in a series of pressures on welfare states. Arguments were put forward that, in order to reduce governments' budget deficit and, in the longer run, reduce debt, countries should reduce public spending. These crises and ongoing challenges can be one possible explanation for the fact that arguments and claims about crisis and cuts have formed a significant part of the literature on the development of welfare states around the globe. The