Welfare Regimes

The most influential contribution here has been the work of Esping- Andersen (1990), who posited that in the advanced capitalist countries welfare states had evolved into three characteristic regime types which he labelled (1) ‘Liberal’, (2) ‘Corporatist-Statist’ and (3) ‘Social Democratic’. He identified the USA or the UK as exemplifying case (1), Germany, for case (2) and the Scandinavian countries in case (3). Whilst the origins of these types of approaches to welfare could be traced to political power structures in the period of industrialisation, in the contemporary period states could be classified in this way on the basis of measurable characteristics on two main dimensions: ‘decommodification’ and ‘stratification’. In simple terms, these types of regime could be characterised as entailing: (1) a more limited, residual role for the state; (2) an extensive social insurance model tied to employment; and (3) a more comprehensive universal- ist and egalitarian approach. Esping-Andersen’s contribution stimulated a large literature, some supportive and some critical. In a review, Arts and Gelissen (2002) found substantial support for the classification, but with important qualifications: a fuller classification would probably include a couple of additional types of case, including the ‘Mediterranean’ countries which, whilst resembling the second category in some respects, were less developed and more reliant upon family support, and variants on the third category dependent on the treatment of gender and the nature of means-testing. Whilst the classification identified ideal types, actual welfare arrangements in some states were better seen as hybrid combinations.

These general theoretical conceptualisations of welfare regimes are related to broader economic structures, particularly regarding ownership and control of key economic sectors and ways in which governments engage with key economic interest groups in managing economic affairs. Since the fall of the Berlin Wall in the 1990s, there has been no obvious alternative to market capitalism as an organising principle for economies—and yet it has been recognised by some that there are significant differences between the way capitalist market economies are owned, organised, coordinated and regulated between different countries—the so-called ‘Varieties of Capitalism’ (Hall and Soskice 2002). For example, the ‘coordinated market economy’ of Germany, with its heavy involvement of regional banks in long-term industrial investment alongside long-term private ownership and participation of unions in management, appears to compete very successfully with the ‘liberal market economy’ of the UK, where shorter-term financial criteria and ‘shareholder value’ dominate management thinking. These differences are likely to be reflected in the character of the housebuilding and real estate industries as well.

Whilst Esping-Andersen and others (Esping-Andersen 2002) acknowledged in the early 2000s that European welfare states needed to adapt and evolve in response to contemporary conditions including globalisation, their aspirations remain considerably more optimistic than some other more recent contributors, partly influenced by the 2008-12 crisis but also by a broader perspective on the logic of global capitalism. For example (Standing 2011), in reviewing the implications of the growth of ‘The Precariat’ is effectively arguing that neither (2) Corporatist- Statist nor (3) Social-Democratic regimes can or will survive, because of inexorable economic and demographic pressures, and that Liberal forms will be the norm.

Esping-Andersen and much of the literature that followed focus mainly on the core elements of the welfare state which revolve around the labour market and income maintenance, and tends to be silent on the role of housing, sometimes termed the ‘wobbly pillar’ of welfare (Torgesen 1987). One may infer expected characteristics of housing’s role in welfare systems under these regime types, for example, that the Liberal regimes would see a smaller and more residual role for social housing and tight means-testing of housing allowances, whilst Social-Democratic regimes would see larger public housing sectors and more generalised housing subsidies, with Corporatist-Statist regimes somewhere in between. However, this leaves certain important issues unresolved. In particular, the role of owner occupation, which enables households to build up an asset base to provide a substantial enhancement to their post-retirement living standards, as well as a significant element of ‘self-provisioning’ is neglected (Castles 1998; Fahey and Norris 2011). More recent discussions have concerned the potential of home ownership to facilitate welfare state restructuring under neoliberalism and globalisation (Ronald 2008), for example, through extensions to ‘asset-based welfare’ which rely upon further debt-based equity withdrawal, including to cover care costs in old age. Kemeny (1981) had suggested that homeowner societies would tend to resist the taxation required to fund high general levels of welfare spending, because of their high ‘front-end loaded’ housing outgoings, whilst anticipating less reliance upon this in their later years.

Kemeny (1995) also sought to develop typologies of housing regime, although these do not map precisely onto the Esping-Andersen categories. He distinguished ‘unitary’ rental sectors where, thanks to the maturing of housing debt, public/social/cooperative providers are able to compete with the private rental market and owner occupation, from ‘dualist’ rental systems where the maturation benefits have been extracted to the benefit of government or former tenants through discounted privatisation. The remaining social rented sector is targeted on the poor, whilst the market rental sector is separate and not a viable alternative to ownership for those with the choice. Broadly, type (1) Liberal regimes tend to have dualistic rental sectors, whilst types (2) and (3) may have unitary sectors, although this would be less likely with the high home ownership Mediterranean types of regime.

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