Governments and unpopular social policy reform: Biting the bullet or steering clear?

Abstract. Under which conditions and to what extent do governments pursue unpopular social policy reforms for which they might be punished in the next election? This article shows that there exists substantial cross‐cabinet variation in the degree to which governments take unpopular measures and argues that current studies cannot adequately explain this variation. Using insights from prospect theory, a psychological theory of choice under risk, this study hypothesises that governments only engage in unpopular reform if they face a deteriorating socio‐economic situation, a falling political position, or both. If not, they shy away from the risk of reform. A fuzzy‐set Qualitative Comparative Analysis (fs/QCA) of the social policy reform activities pursued by German, Dutch, Danish and British cabinets between 1979 and 2005 identifies a deteriorating socio‐economic situation as necessary for unpopular reform. It is only sufficient for triggering reform, however, if the political position is also deteriorating and/or the cabinet is of rightist composition. This study's findings further the scholarly debate on the politics of welfare state reform by offering a micro‐foundation that helps one to understand what induces political actors aspiring to be re‐elected to engage in electorally risky unpopular reform.     

Is There a Future for Contracting in the Australian Public Sector?

Contracting has moved from the margins to the centre of public management. Significant sections of the public workforce, from benefits delivery to corporate services, now find their functions open to tender. Governments prefer to concentrate on policy analysis and development, leaving service delivery to the market. As purchasers rather than providers, governments are redefining the role and scope of the state. But are Australian governments ready for this shift to contracting? Do they possess the full array of control and reporting mechanisms necessary if contracting is to deliver its promised benefits? There are significant difficulties finding evidence that answers such questions. Yet on the basis of concerns discussed across Australian jurisdictions, it appears contracting has developed so quickly it outstrips the capacity of government to monitor what is happening, and so learn from mistakes. In time governments will become better at maintaining accountability for contracted functions, because experience reduces the risks of moral hazard.     

Choosing the path of austerity: how parties and policy coalitions influence welfare state retrenchment in periods of fiscal consolidation

What are the conditions under which some austerity programmes rely on substantial cuts to social spending? More specifically, do the partisan complexion and the type of government condition the extent to which austerity policies imply welfare state retrenchment? This article demonstrates that large budget consolidations tend to be associated with welfare state retrenchment. The findings support a partisan and a politico-institutionalist argument: (i) in periods of fiscal consolidation, welfare state retrenchment tends to be more pronounced under left-wing governments; (ii) since welfare state retrenchment is electorally and politically risky, it also tends to be more pronounced when pursued by a broad pro-reform coalition government. Therefore, the article shows that during budget consolidations implemented by left-wing broad coalition governments, welfare state retrenchment is greatest. Using long-run multipliers from autoregressive distributed lag models on 17 OECD countries during the 1982–2009 period, substantial support is found for these expectations.     

Making a difference? Public perceptions of coalition,single-party,and minority governments

It is often argued that coalition governments are less likely to ‘make a difference’ than single-party governments. Because they are composed of multiple actors who need to agree to policy innovations, and because there are fewer personnel changes between successive coalition governments, coalitions are associated with fewer policy differences. From this it follows that public perceptions that governments should ‘make a difference’ will be weaker under coalition than single-party governments. The same logic applies to minority governments, which require support to pass legislation from opposition parties, and hence are less likely to deliver on their commitments. Using data from the Comparative Study of Electoral Systems, this paper tests these hypotheses. The expected effects, albeit small ones, are found for coalition governments, but only in old democracies.     

The Quiet Revolution? The Labour Party and Welfare Conditionality

Labour's 2017 general election manifesto contained a pledge to ‘end the punitive sanctions regime’ in the British welfare state. Whilst the specific implications of this pledge were not elaborated, such a policy would nevertheless constitute a profound break with a welfare consensus spanning over twenty years. The depth of the suggested changes on welfare are also evident in the scale of reform proposed to disability benefits, as well as plans—confirmed in August 2018 by the Shadow Chancellor John McDonnell—to pilot universal basic income. Collectively, these policies would seemingly be deeply at odds with public opinion on the benefits system, which over the course of the last two decades has significantly hardened. Yet despite the seemingly radical and controversial nature of the policy, it received very little media or public attention during the election campaign. This article explores Labour's ‘quiet revolution’ on welfare, examining whether Labour's new welfare approach is indeed a bold attempt to reshape public opinion on welfare or, alternatively, a mostly pragmatic reaction to changing social attitudes. The argument presented is that whilst there are persuasive explanations that Labour is responding to a change in the public mood, there is also evidence of a more ambitious goal at stake: the aim of reshaping, not simply responding to, public opinion on the welfare state.     

Creating Public Value with Tax and Spending Policies: The View from Public Economics

According to the framework rooted in public economics, governments can create public value by focusing tax and spending policies on remedying market failures and addressing concerns about fairness embodied in a social welfare function. By pursuing optimal tax and spending policies, governments navigate the omnipresent trade‐offs between equity and efficiency. Of course, in practice, the process by which policies are adopted does not resemble the planner's problem in social choice theory. In addition, real fiscal policies do not look much like the recommendations that arise from the optimal tax literature. Governments operate in public choice environments that are not conducive to focused remedying of market failure, and they suffer from their own tendencies to fail to achieve their objectives. Nevertheless, many of the tools are in place to help the federal and state governments focus tax and spending in ways that can maximize public value.     

International Institutions and Domestic Compensation: The IMF and the Politics of Capital Account Liberalization

Certain governments have been faster than others in relaxing their restrictions on the cross‐border movement of capital. How can we explain the timing and extent of financial liberalization across countries since the 1970s? We argue that IMF stabilization programs provide a window of opportunity for governments to initiate financial reforms, but that policy makers are more likely to seize this opportunity when welfare expenditures are high. Large loans from the IMF shield policy makers from the costs of financial reform, while welfare expenditures provide credibility to the government's ex ante promises of compensation to individuals who are harmed by the reforms. We test this hypothesis on data for 87 countries from 1975 to 2002. We employ a spatial autoregressive error sample selection model which accounts for the nonrandom participation of countries in IMF programs as well as the processes of international policy diffusion. The results provide strong support for the interactive effect of IMF programs and domestic welfare expenditures on financial liberalization.     

Foreign-Trade Agreements: A New Federal Partner?

The North American Free Trade Agreement (NAFTA) and the GeneralAgreement on Tariffs and Trade (GATT) shift power away fromstate and local government in the federal system. They imposenew rules on the exercise of state and local powers over procurementand the regulation of food, environmental, health, product andservice standards, investments, services, financial services,economic development, and land transportation. States will haveto comply with various reporting and registration requirements,and may be subject to stricter nondiscrimination obligationstoward imported goods and services than under the commerce clauseof the U.S. Constitution. State and local governments will bejudged by international panels, whose judgments the United Statesmust enforce or suffer trade sanctions from aggrieved tradingpartners. Yet, states have not strongly opposed NAFTA and GATT.The greatest state opposition has been to automatic preemption,which the Clinton administration promised to avoid as much aspossible. Nevertheless, increased power over federalism hasmoved to the executive branch, business, and trade-dispute panels,with less power for state and local governments.     

The privatisation of welfare: The impact of parties on the private/public mix in pension provision

The Conservative governments of 1979–95 have encouraged private sector pension provision to the extent that it covers two‐thirds of the British workforce. It is now possible to consider moving from the universal system of state provision laid down in the Beveridge scheme to a targeted system. Indeed, it has been suggested that the basic state pension should be abolished. However, if we consider the policy initiatives of the 1980s it would not seem that Conservative policy differs markedly from the policies pursued by the Conservative Party in the 1960s and 1970s. Indeed, there are also some similarities with the Labour Party policy. In this sense the case of pensions would appear to support the view that Thatcherism was less radical than has been generally claimed and represents a continuation of past policy. However, if we employ models of welfare state development to analyse policy outcomes we can demonstrate how the cumulative effect of individual policies pursued by the Conservatives has led to a change in the character of the British welfare state and thus the continuities with past policy may be deceptive.     

The Fulfillment of Parties’ Election Pledges: A Comparative Study on the Impact of Power Sharing

Why are some parties more likely than others to keep the promises they made during previous election campaigns? This study provides the first large‐scale comparative analysis of pledge fulfillment with common definitions. We study the fulfillment of over 20,000 pledges made in 57 election campaigns in 12 countries, and our findings challenge the common view of parties as promise breakers. Many parties that enter government executives are highly likely to fulfill their pledges, and significantly more so than parties that do not enter government executives. We explain variation in the fulfillment of governing parties’ pledges by the extent to which parties share power in government. Parties in single‐party executives, both with and without legislative majorities, have the highest fulfillment rates. Within coalition governments, the likelihood of pledge fulfillment is highest when the party receives the chief executive post and when another governing party made a similar pledge.     

Residential location,transportation, and welfare‐to‐work in the United States: A case study of Milwaukee

Abstract

This article addresses two questions about spatial barriers to welfare‐to‐work transition in the United States. First, what residential and transportation adjustments do welfare recipients tend to make as they try to become economically self‐sufficient? Second, do these adjustments actually increase the probability that they will become employed?

Analysis of 1997–2000 panel data on housing location and automobile ownership for Milwaukee welfare recipients reveals two tendencies: (1) to relocate to neighborhoods with less poverty and more racial integration and (2) to obtain a car. Results from binary logit models indicate that residential relocation and car ownership both increase the likelihood that welfare recipients will become employed. These findings suggest that policies should aim to facilitate residential mobility for low‐income families and improve their neighborhoods, rather than simply move them closer to job opportunities. The findings also suggest a critical role for transportation policy in reducing unemployment.     

Economic voting and welfare programmes: Evidence from the American states

While scholars have hypothesised that a strong welfare state should reduce voters' incentives to base their votes on economic outcomes, evidence for this proposition remains mixed. This article tests whether differences in welfare protections across American states affect the relationship between economic performance and support for the president's party in 430 state legislative elections from 1970 to 1989. Analysing the results of over 42,000 contests in which an incumbent was running for re‐election, it finds that while unemployment insurance programmes do not affect the importance of economic performance, the electoral fortunes of presidential co‐partisans are less strongly tied to the national economy in states with generous anti‐poverty programmes. Thus by reducing vulnerability to poverty, economic safety‐nets lower the salience of the economy and provide electoral cover for politicians during economic slowdowns.     

Welfare-Ideological Change in Scandinavia: A Comparative Analysis of Partisan Welfare State Positions in Four Nordic Countries, 1970–2003

During the 1990s, the Nordic welfare states, notably Finland and Sweden, faced serious challenges that triggered a number of welfare restructuring processes. This article focuses on the political determinants of these processes, or, more exactly, it analyses changes in partisan welfare policy positions in Denmark, Finland, Norway and Sweden between 1970 and 2003. The main goal of the article is to chart possible changes in party positions on social policy. Has there been a decline in pro‐welfare attitudes during the period 1970–2003, and if so, how are these changes related to ideological and institutional factors? The data analysed in the article consists of election programmes, and more specifically, textual utterances concerning the welfare state. The results indicate a relatively high degree of stability in partisan support for welfare state expansion and investments in social justice, while market‐type solutions to social problems, on the other hand, have become more salient among parties, especially in the Right. The findings suggest that parties still differ from each other as to welfare‐political positions, indicating that Social Democratic and left‐wing parties remain the foremost defenders of the ‘Nordic Welfare Model’, whereas the Right has become more hesitant towards welfare state expansion.     

Parties on the Chain of Federalism: Position-Taking and Multi-level Party Competition in Germany

Germany’s federalism imposes significant constraints on sub-national parties. They cannot enact their ambitious policy agenda as most legislative powers are concentrated at the federal level. This article demonstrates how sub-national parties use position-taking strategies to escape these constraints. By position-taking, parties try to induce regional voters and interest groups to judge them for what they stand for instead of blaming them for the policies they cannot deliver. This argument is illustrated empirically by analysing all 1,715 announcements of legislative initiatives in the Bundesrat in 562 electoral manifestos and coalition agreements that were published during all 92 regional elections since 1990 and all 1,619 Land bills from the period between 1972 and 2013. It is shown that regional parties and governments that are in opposition at the federal level announce and submit significantly more legislative initiatives that aim at changing federal policies.     

How Do “Organizational Designs” Influence Welfare Politics? A Study of the Nordic Pension Systems

The interplay between organizational structure and political behaviour is one of the focal points of political science. How and to what extent do existing organizational structures constrain and channel future political decision-making? One specific hypothesis from the welfare literature provides the starting-point for this article: Korpi's argument that “institutional” welfare arrangements grant the poor better welfare provisions than “marginal” welfare arrangements. By confronting Korpi with his critics, I argue that the interplay between welfare designs and political decision-making is more complex than Korpi's thesis suggests. Implications for the broader welfare debate are discussed.     

Strategic Re‐framing as a Vote Winner: Why Vote‐seeking Governments Pursue Unpopular Reforms

Most political science accounts assume that governments in Western democracies avoid unpopular reforms to protect their re‐election chances. Nevertheless, governments sometimes embark on electorally risky reforms – even in times when they have no slack in the polls. In this article, it is argued that pursuing unpopular reforms can be a perfectly rational strategy for vote‐seeking governments. Based on a simple game theoretical model that compares strategic framing with the classic blame avoidance strategy, it is demonstrated that unpopular policy reforms allow governments to pursue gains of both policy and votes by opting for a highly visible strategy of reframing the substantive reform issue in question. This general argument is illustrated with the substantial 2011 retrenchment of Danish early retirement benefits. This particular welfare state programme was highly popular. Nevertheless, the incumbent Liberal prime minister proposed to abolish it only a few months prior to a national election while his government was trailing significantly in the polls.     

Issue compensation and right‐wing government social spending

It is well‐established that prolonged left‐wing incumbency has a positive long‐term effect on welfare effort in terms of high levels of social spending and reduced levels of economic inequality and poverty. Prolonged left‐wing incumbency also influences the institutional set‐up of welfare states, in particular generating strong support for existing arrangements in countries with large welfare states. The issue ownership literature furthermore shows that the public comes to distrust right‐wing parties as defenders of the welfare state. In countries that have a tradition of left‐wing incumbency it is particularly important for right‐wing governments to compensate for the distrust of the public because of the popularity of the welfare state and strong vested interests. While right‐wing governments on average are negatively associated with social spending, there is a strong positive association between right‐wing government and social spending in traditionally left‐wing countries. It is even the case that right‐wing governments in these countries spend more on social welfare than left‐wing governments. This indicates that right‐wing governments are forced to compensate for the lack of public trust by being even more generous than the left.     

Concede and Move On? One Nation Labour and the Welfare State

The idea that Labour has already lost the argument on welfare with the Conservatives, and with it the general election, is probably overplayed. If truth be told, Labour's construction and subsequent defence of the welfare state has always been something of a double‐edged sword for the Party, earning it brickbats as well as support, and sometimes as stranding it in the past, committing it to promises that were undeliverable and ultimately self‐defeating. The political response by Ed Miliband and Ed Balls to the welfare trap set for them by David Cameron and George Osborne owes as much to New Labour as it does to ‘One Nation Labour’. That said, the latter does seem to be informing the Party's policy response, in particular its emphasis on restoring the contributory principle. Whether, however, this is practical politics given the inherently hybrid nature of Britain's welfare state and its heavy skew toward help for the elderly is a moot point. And whether ‘One Nation’ actually helps or hinders the Party in its quest for workable policies and a winning electoral formula is similarly debateable. Certainly, however much it is tempted to do so, Labour shouldn't waste too much valuable time trying to counter widespread myths about welfare. Nor should it overreact and obsess about the issue—or, indeed, pour out detailed policy too soon, if at all. Obviously, Labour needs to provide a direction of travel. However, that should focus not so much on welfare itself but on what the Party is proposing on the economy, on housing and on wages.     

WATER RESOURCE DEVELOPMENT

Both the federal and state governments have strong constitutional daims and political resources with which to influence the allocation of water resources. Until the 1970s. federal agencies were able to dominate kr setting goals and objectives. However, when the federal government attempted to implement a national water policy in the 1970s, effective opposition was mounted by the states. Both the states and the federal government now exert decisive influence in water policy.     

Developing and Testing a Composite Model to Predict Local Fiscal Distress

One of the thorniest issues of intergovernmental fiscal relations is state oversight of local fiscal affairs. States have oversight responsibility and must take action when local governments run afoul of responsible fiscal behavior. Less accepted is how states can detect local financial difficulties before they become emergencies that require state takeover. Research in the 1970s provided some assistance to states wishing to recognize local financial emergencies. But the time has come to look at this issue anew, particularly with an eye toward predicting local financial problems before they become serious. This article describes a 10-point scale that predicts these problems and tests the scale to predict local fiscal stress in a sample of Michigan local governments.