The 'Golden Age' of Welfare State Expansion and Varieties of Welfare State Capitalism
Following episodes of mass destruction, economic depression and the widespread breakdown of democracy in the first half of the twentieth century, a new political, social and economic order was established. Traumatic experiences, increased social needs and flourishing economies in the decades of reconstruction provided the basis for the political will and the financial feasibility of post-war welfare state expansion. Against this backdrop, welfare states across the OECD world experienced a disproportionately large expansion in the form of social security coverage towards new beneficiaries, more lenient eligibility requirements and higher benefit levels of transfer payments, as well as new programmes and policy instruments.
However, the heyday of welfare state expansion between about 1950 and 1980 was by no means uniform across countries, nor did expansion dissolve previous national differences. Functionalist explanations reach their limits when diversity persists despite economic convergence (Therborn 1995; Castles 1998). In addition, we find no lack of variation in the institutional set-up and generosity of social policy. Despite the disruptive character of World War II, path dependency links the postwar development of welfare states to the institutional heritage of the formative period, with earlier design choices as well as the mere age of welfare programmes bringing about characteristic features (Alber 1982). In addition, power resource theory attributes cross-national social policy differences to political factors, notably the power resources and coalitionbuilding strategies of the left-wing labour movement (Castles 1978; Stephens 1979; Korpi 1983; Garrett 1998; Hicks and Kenworthy 1998; Huber and Stephens 2001; Schmidt 2010; Ebbinghaus 2011; Esping- Andersen 2014; van Kersbergen and Vis 2014, 50).
Political institutions have further been critical for explaining the development and cross-national variation of welfare states. Specifically, the presence and strength of institutional veto points, such as constitutional courts, direct democracy, federalism or presidential veto powers, have been identified as inhibiting policy change, which in the post-war period implied limitations to public welfare expansion (Huber et al. 1993; Bonoli 2001; Obinger et al. 2005). Neo-corporatist institutions, in contrast, generally fostered an expansionary path (Cameron 1978; Katzenstein 1985). Moreover, a country’s electoral system has important implications for redistribution (Iversen and Soskice 2006). In interaction with a society’s denominational landscape, the choice for majoritarian or proportional representation shaped political coalition building and, consequently, led to the emergence of distinct types of welfare states (Manow 2015).
Finally, ethnic homogeneity is arguably a building block of the solidarity needed for the development of an encompassing welfare regime (Alesina and Glaeser 2004; Lindert 2004, 71). Countries with a high level of ethnic or linguistic fragmentation, such as Switzerland or the United States (US), thus may lack the high solidarity necessary for redistribution that characterizes the rather homogenous Scandinavian societies.
Whereas early inquiries in comparative welfare state research relied on expenditure data, Esping-Andersen’s regime typology (1990) emphasized the differences in the structural make-up of welfare states. The social democratic, liberal and conservative-corporatist welfare regimes are distinguished depending on the degree of decommodification, stratification and the role of the family, state or markets in welfare provision. Esping-Andersen’s ‘three worlds of welfare state capitalism’ has been criticized on various accounts (for an overview, see Arts and Gelissen 2010; Emmenegger et al. 2015), yet his classification remains the most influential and fruitful typology in the field of social policy (Ferragina and Seeleib-Kaiser 2011; Emmenegger et al. 2015). While every country deviates from the ideal regime types in several aspects, the typology shows both descriptive as well as analytical value when it comes to post-war welfare state development. In addition, the typology’s focus on welfare state patterns is helpful for understanding their vulnerabilities and reform trajectories in the post-Golden Age period.