Party Institutionalization and Welfare State Development

Abstract

We propose that the extent to which political parties are institutionalized shapes welfare state development. Institutionalized parties allow politicians to overcome coordination problems, avoid capture by special interests, and form stable linkages with broad social groups. These features both enable and incentivize politicians to pursue generous and universal welfare policies.Employing recent measures of party institutionalization and welfare law features, we test implications from our argument on data covering 169 countries and extending back to 1900.Even when accounting for country-and year-fixed effects and institutional features such as electoral system, regime type and state capacity, we find robust evidence that party institutionalization leads to more extensive, universal, and generous welfare arrangements. The relationship is more pronounced in democracies, but exists also in autocracies. When disaggregating party institutionalization and evaluating mechanisms, the linkages that institutionalized parties form with social groups constitute one important, but not the only relevant, factor.3

Methods

“…Event studies are helpful in identifying the factors constraining or facilitating the emergence of specific social protection institutions. They focus on unveiling correlates of foundational events (Knutsen & Rasmussen, 2018;Rasmussen & Knutsen, 2017;Schmitt, 2015;Schmitt et al, 2015).…”

Autocratic welfare programs, economic perceptions, and support for the dictator: Evidence from African autocracies

“…It is important to note that this index does not indicate the size of welfare programs, but rather measures whether major social policies are provided as universal benefits. In short, this variable estimates the quality and structure of welfare programs (Rasmussen and Knutsen, 2017).…”

Clientelism, Public Goods Provision, and Governance

“…14 Our results, reported in Tables B10-B12 in Appendix B, provide evidence that clientelistic countries exhibit, compared to the non-clientelistic ones, significantly lower levels of public spending, smaller GDP shares of expenditure on education, and worse levels of government quality. 11 The SPaW database (Rasmussen 2016;Rasmussen and Knutsen 2019) is a unique compilation of social policies around the world from 1871 to 2013. For each country-year, major welfare state law for several policies is coded across three main dimensions: whether claimants are granted benefits by necessity and need, by citizenship, and by socioeconomic group.…”

“…The relevant groups are: agricultural workers; industrial/production workers; small-firm workers; self-employed; students; employers; temporary/casual workers; and family/domestic workers. Source: Social Policy around the World (SPaW) database (Rasmussen 2016), retrieved from Rasmussen and Knutsen (2019).…”

“…If the programme automatically includes all citizens, 9 is given. Source: SPaW database (Rasmussen 2016), retrieved from Rasmussen and Knutsen (2019).…”