The Re‐Emergence of Partisan Effects on Social Spending after the Global Financial Crisis

Abstract

This article analysed the effects of the global financial crisis on the political dynamics that shape social spending in Europe. It used panel data for 28 OECD countries during the pre‐crisis (1990–2007) and post‐crisis (2008–13) periods to test the extent to which social spending was affected by EU and domestic variables. Notable differences were found in the influence of EU membership on social spending before and after the crisis as well as an increase in political partisan effects on social expenditure post‐crisis. Additional data of party manifestos for 42 national elections across 26 EU member states during the crisis (2008–13) confirm the emergence of left–right party divisions over social welfare. This finding is significant as partisan effects were absent in the decades preceding the crisis. These results suggest a significant shift has taken place in European social spending in the wake of the Great Recession.

The political economy of minimum income benefits: How parties, unions and migration influence benefit adequacy

“…This would mean that countries that are EU members or joined the EU have lower(ed) benefits. These findings concur with the ‘race to the bottom’ hypothesis: negative market integration and neoliberal ideas emphasised a convergence towards less generous welfare states in Europe (McManus, 2019).…”

The Repoliticization of the Welfare State

“…Whereas left parties held no relationship with social spending precrisis, they became significant postcrisis. This indicates greater partisan influence on social spending after the GFC (Cusack, Iversen, and Rehm;Herwartz and Theilen 2014;McCarty 2012;McManus 2018McManus , 2019Starke, Kaasch, and van Hooren 2014). The lack of significance of parties precrisis may be accounted for by the fact that during this period, political differences narrowed as parties on the left and right adopted similar neoliberal social policies (Häusermann and Palier 2008;Hendrik, Schäfer, and Manow 2004;Leschke and Jepsen 2012).…”

“…Since the start of the GFC, we have seen such an ideological shift as parties on the left and right have turned toward traditional beliefs and policies. Left-wing parties, such as social democratic parties, have renewed their traditional support for the welfare state and have encouraged higher levels of social spending (Bremer 2018;McManus 2019). By contrast, center-right parties have largely embraced fiscal conservatism and lower social spending.…”

Does partisanship explain spending patterns in congressional bill proposals?

“…On balance, however, in both the US and Europe evidence for partisanship as a driver of government spending or other policy outcomes is highly conditional (Baumgartner et al, 2009; Bevan and Greene, 2016; Budde et al, 2018; Froio et al, 2017; McAtee et al, 2003; McManus, 2019). Political parties are obviously important, so these results are surprising.…”

“…However, studies of legislative outputs find that any effects of partisanship appear to be highly conditional (Bevan and Greene, 2016; McManus, 2019). Research on budgeting in the US and Europe has found that national budgets cannot be described as partisan products.…”