Comparative Welfare States in Advanced Industrial Economies

In a couple of weeks, we–in PLSC240–will address the topic of political economy.  We’ll compare states around the world with respect to institutions such as tax regimes, openness of borders to goods and services imported from abroad, and also with respect to welfare state spending.  Andrew Gelman has posted on his blog a review–which will be published in Political Science Quarterly–of a new book by Clem Brooks and Jeff Manza, titled Why Welfare States Persist.  Not surprisingly, the answer is that they are publicly popular.  What is more interesting, though, is why the size of the welfare state differs amongst countries with relatively similar income levels.  Can you can think a cultural explanation?  Institutional?  Rational Choice?

Rich capitalist democracies around the world differ widely in their welfare states—their systems of government-provided social support–despite having comparable income levels. Brooks and Manza report that welfare state spending constituted 27% of GDP in “social democratic countries” such as Sweden and 26% of GDP in “Christian democratic countries” such as Germany, but only 17% in “liberal democracies” such as the United States and Japan. These differences are correlated with differences in income inequality and poverty rates between countries.

In their book, Brooks and Manza study how countries with different levels of the welfare state differ in their average policy preferences, as measured by a cross-national survey that asks whether respondents think the government should (a) provide a job to everyone who wants one, and (b) reduce income differences between rich and poor. Brooks and Manza find that countries where government jobs policies and redistribution are more popular are the places where the welfare state is larger, and this pattern remains after controlling for time trends, per-capita GDP of the country, immigration, women’s labor force participation, political institutions, and whether the ruling party is religious or on the left.

Next week, you will have a chance to test this hypothesis when we comparatively analyze public opinion attitudes around the world using the World Values Survey.   Is this relationship real?  Does it apply to states that are not advanced industrial economies?  We’ll find out next week.