Welfare states and health care systems
Lecture 2
Ana Rico
STEPS IN INDUCTIVE POLICY RESEARCH
DESCRIPTION
 Definition of the WS
 Types of welfare states and health care systems
- Which are the relevant policy instruments in each sector?
 Evolution trends
- Do different types evolve differently (diverge) or similarly (converge)?
ANALYSIS
 Causes = determinants
- Economic (e.g. industrialization, GDP growth), social (e.g. Illness, poverty, social
structure), and political (e.g. voting, government coalitions)
 Consequences = social, economic and political impact
- Which impact upon poverty, health, unemployment? National/by social group
 Policy implications
- Which policy instruments should be selected in each country and sector, given the
national configuration of causes, and the evidence on their consequences?
OUTLINE OF THE SESSION
INTRODUCTION
THE WELFARE STATE (Esping-Andersen, 2000 & 2003)

1. Definition and measurement

2. Types of WS in Europe: Policy instruments

3. Consequences/outcomes

4. Causes of the welfare state: origin and evolution
NATIONAL HEALTH CARE SYSTEMS (Blake &
Adolino, 2001)

Types: Beveridge, Bismark, (Shemashsko), Residual/market-based

5. Evolution and policy instruments

6. Determinants

7. Policy implications
1. THE WS: Definition and measurement
 Definition:
 Role of the state in the protection against life risks: A big public
insurance company (Social Security), which also owns, or contracts
with, a service provision company/ies (eg the British NHS)
 It usually includes:
- Cash benefits: old age, unemploym., sick leave, maternity pensions
- In-kind benefits or welfare services: HC, social care, education
 But when is protection against risks extensive enough for an state to
be called welfare state?:
 Initially: only states with universal, free programmes (Briggs 1969)
 Later: most civil servants work in welfare (Therborn 1983, quoted by
Esping-Andersen 2000)
 Nowadays: At least 3 nearly universal programmes Mahoney (2004)
 WS regimes: role of state/market/family in protection from risks
1. THE WS, POLITICS & MARKETS: Definition
GOVERNANCE & POLITICS
INTEREST
GROUPS
DEMOCRATIC
GOVERNMENT &
INSTITUTIONS
THE MARKET
Financial markets
PRIVATE FINANCERS:
Banks, insurers, citizens
PUBLIC & SOCIAL
INSURANCE
Product markets
PRIVATE PROVIDERS: Hospitals,
doctors, schools, nursing homes
PUBLIC WELFARE
SERVICE
PRODUCTION
THE
WS
1. THE WS: Definition and measurement
 Measurement:
 Quantitative indicators: expenditure (per hab. or GDP), % employment
 Qualitative indicators: nature of entitlement (poverty, employment,
citizenship), ´decommodification´ (= universal = benefits independent of
employment or income), coverage (% population), generosity of
benefits, number of programmes covered
 Types of WS:
 Different types of WS: depending on values/ranking in quantitative and
qualitative dimensions
 Causes of WS Main theses nowadays:
- Different types of WS (HC systems) have different causes
- Different WS sectors (eg pensions, HC) can be of different types,
and have different causes
1. & 2.: THE WS, Measurement & Types
Conservatism
ITA
AUS
GER
BEL
FRA
FIN
IRE
JAP
NETH
USA
CAN
UK
NZ
DNK
NOR
SWE
AUZ
SWI
Neo-liberalism
Based on Hicks & Kenworthy 2003
Socialdemocracy
2 & 1. TYPES OF WS: Types and policy instruments
(THREE + 1) WORLDS OF W CAPITALISM? (Esping-Andersen 1999)
PUBLIC EMPLOYMENT AS A OF TOTAL
(% STATE PRODUCTION)
HIGH
LOW
SCANDINAVIA
SHI COUNTRIES
UK
PUBLIC SOCIAL
EXPENDITURE
AS % OF TOTAL
(% PUBLIC
INSURANCE)
HIGH
Spain
Italy
LOW
Portugal
SOUTH
-EU (1)
SOUTH
-EU (2)
Austria, Germany
Belgium, Neth., Lux.
Canada
USA, Australia, New Zealand
Greece
Switzerland
CEE (2)
CEE (1)
2 & 3. TYPES OF WS : Instruments and consequences
+
UNIVERSAL
-
EGALITARIAN
Pure liberal:
Public insurance
for the poor
Based on Esping-Andersen, 1990
Pure Christian
Democratic:
Employees
Outcomes
Pure ChisDem:
Non-employed
RESIDUAL
REGRESSIVE
Pure liberal:
Private insurance
for the non-poor
% Covered
Pure (unmixted)
Socialdemocratic
Pure CD:
Private insurance
for employers
2 & 3. TYPES OF WS: Instruments and consequences
I. THE SOCIAL DEMOCRATIC WORLD
1. Policy instruments
2. Policy (outputs &) outcomes

Redistributive financing & benefits

Public expenditure: High (output)

Universal access (citizenship)

Income:  Poverty & class inequality

Public provision of services

Employment:  gender & class inequality

Expanded services, active labour mkt & 
gender-egalitarian policies
Main beneficiary: poor citizens/residents
working women
II. THE CONSERVATIVE (CHRISTIAN DEMOCRATIC) WORLD
1. Policy instruments
2. Policy (outputs &) outcomes

Proportional financing & benefits

Public expenditure: High (output)

Profess. groups (employm.-based)

Income:  inequality of workers at risk

Private (NFP) provision of services

Employment:  total levels of employment

Cash transfers across life cycle

Main beneficiary: middle-class families
III. THE LIBERAL WORLD
1. Policy instruments

Regressive financing & benefits
PUB: Redistr. PRIV: regressive

Means-tested (income)

Private (FP) provision of services
2. Policy (outputs &) outcomes

Public expenditure: Low

Income:  Extreme poverty,  inequality

Employment:  total levels of employment

Main beneficiary: PUB: poor/old citizens
PRIV: the wealthy
2. TYPES OF WS
THE 3 WORLDS OF WELFARE CAPITALISM = National configurations of:
* Social structure: Distribution of power, income, rights, status across social groups 
Political ideologies (or subcultures)
* Partisanship (party/ies in government) 
* WS Policy instruments 
* Policy outcomes by social group (distributional consequences)
The liberal
world
The conservative
world
The social democratic world
4. CAUSES OF THE WS
 Initially, Esping-Andersen theory was actor-centred (political parties):
Social structure
and national
culture
Socialdemocratic
parties in
government
(Scandinavian)
Welfare state
 As a reaction to social determinism in early marxist theory:
Social structure
Policy
Political party
 In the 2000s, his theory becomes action-centred (and multi-causal):
 - what matters is not whether SD present in government, but
 - how they played the political game: mobilization in the streets,
coalition with ‘middle-class’ parties, success of their prior policies
4. CAUSES OF THE WS: Origin and evolution
Dominant
national
subcultures
Social
structure
Christian &
conservative
parties, unions &
voters
Political competition:
* Electoral campaigns
* Policy campaigns
 Political mobilization
 Coalitions
Socialdemocratic
parties, unions &
voters
Liberal parties,
progressive (state)
elites, social protest
SOCIAL
SOCIOPOL.
POLITICAL
Based on Esping-Andersen 2000 & 2003; Jenkings & Brents 1987; Skocpol 1987
Policy
change
POLICY
4. CAUSES OF THE WS: Origin and evolution
• Catholic parties & unions
• Christ.democratic parties
• Nationalist parties
• Anti-democratic parties
CONSERVATIVE
• Agrarian/rural parties
• (Professional unions)
 Middle-class agricultural workers
 (White-collar indust. & service workers)




Socialist party elites
Socialist tradeunionists
Blue-collar industrial workers
Very poor agricultural workers
• Professional associations
 Liberal professions (eg doctors)
POLITICAL
ACTORS
• Socialdemocratic parties
• Class-based unions
 Socialist intellectuals
• The Church
• The Army
• Aristocracy
• Landowners
• Monarchists
• Nationalists
• Fascists
• Small owners
Individual and collective
SOCIALDEMOCRATIC
:
Based in Esping-Andersen 1990 & 2003
• Liberal parties
• Bussiness associations
 Liberal elites
 Employers
 Financers
 Exporter landowners
LIBERAL
4. CAUSES OF WS: Origin and evolution

Action-centred arguments

National culture is not given, but rather a consequence of politics

The socialists were a main cause of the WS, even when not present in
government (state actor)  still influential as a pressure (sociopolitical)
group, via political mobilization

When in government, coalitions with other actors critical to explain
success in WS development
CONCLUSIONS: Main theses

National cultures and WSs result from political struggles among
ideological subcultures represented by competing coalitions, by which one
became predominant over (but didn’t eliminate) the others

In each WS subsector, an specific combination of conservative, liberal and
socialdemocratic policy instruments exist, which is the result of the varying
success of different competing coalitions.
Based in Esping-Andersen 1990 & 2003
4. CAUSES OF THE WS: Evolution
The increasing interpenetration among the 3 worlds

1. A common conservative historical origin (=Ancient Regime, absolutism)

Characterized by (church) charity for the poor + guild-type mutual funds for
the employed + extensive welfare role of family (women)

Which became predominant in countries with weak liberal & socialdemocratic
subcultures: the ChrisDem reform path, SHI crowds-out most private market
2. A competing liberal reform path (emerging in 1900-30, back in 1980-90s)

Initially oriented to undermine Conservatism: public system substitutes charity;
and markets substitute mutual funds

Initially wins the battle in Anglosaxon, then Scandinavian countries

Later oriented to undermine socialism; + slowly penetrating rest of the world
3. A socialdemocratic reform path (emerging in 1900-30, dominant in 1945-75)

Which aimed first at removing 1.: Unions (& then the state) take over charity

And then competes with 2.: The state takes over the private market too

Varying penetration across EU: dominant in Nordic, SouthEU, UK NHS, CEE.
Based in Esping-Andersen 2003
THE US EXCEPTION
 In WS cash transfers, similar to conservative model (if less generous)
 In HC, liberal  very limited role of the state (less than 50% of pop.)
 1930s: Succesful pro-poor WS (cash transfers) reform BUT failed
health care reform  1. Success WS + 2. Failure HC
* Europe: 1880-1920s pro-poor WS + HC
 1960s-1970s: Succesful pro-workers pension reform, limited
unemployment reform, and very limited (pro-poor & aged) health care
reform  1. Partial success WS + 2. Limited success HC
* Europe: 1945-70s  Universal or pro-workers WS & HC (but
Switerland, pro-workers HC in 1999)
 1993-4: Failed universal health care reform  Failure HC
* Europe: 1970s-90s  Further expansion of WS:
• From pro-workers to universal in CD WS
• New programmes (eg social care) in SD WS
Source: McKee, 2003
5. NATIONAL HEALTH SYSTEMS: Evolution & instr.
HC POLICIES
HC SYSTEMS
Mutual Aid
Society
Legislation
Social
Health Insurance
National Health
System
SYMBOLS
[failed reforms]
Regulation of mutual funds
NHS
+
Special interest rates
Britain
1793 +, 1850 *
1911 %
1946 NHS, @H, €H
$
Government subsidies
Sweden
1891 +$, 1910 *$
[1919 %] 1931 % 1946
1533 @H 1958 R
1969 € 1974 @PC
1946 && [1948 NHS]
*
Regulation of activities
#
Political controls
Denmark
1892 $ *
[1919 %]
1971 && NHS
Italy
1886 + $ * #
[1919 %] 1944 &
1978 NHS @H € R
Spain
1859 $ #
1942 % 1967 & @H
1986 NHS @PC
SHI
[1919] 1943 + $
1852 $ + * 1898 #
Germany
Belgium
Austria
% Compulsory, low-income workers
& Compulsory for all salaried workers
National Health Service
The Netherlands
France
Social Health Insurance
[1928 %] 1930 % 1945 &
1883 %
NHS National Health Service
1798 @H 1958 €H
&& Universal
@H Gov. ownership of hospitals
@PC Gov ownership of PC
1849 $ 1898 *
1944 &
1888 + $ # 1939 *
€ Full-time salaries (Hosp, PC)
R Restrictions on private practice
Based on Immergut E (1991): Medical markets and professional power: The economic and
political logic of government health programmes, Working Paper 1991/24, Center for
Advanced Studies in the Social Sciences, Juan March Institute, Madrid, Spain.
6. DETERMINANTS OF NHI REFORM
1.
Cultural explanations

National culture (stable): Liberalism/individualism in Anglosaxon countries =
“a distrust of government solutions to societal problems”
2.
Economic explanations (Convergence th): omitted, controlled by
design: Does not explain differences among developed countries + US exception
3.
Institutional explanations

A. Executive dominance: “Parliamentary systems feature stronger party
discipline..., and greater centralization of legislative authority in the cabinet”

B. Federalism

C. Corporatism (as an indicator of interest groups’ formal political power)
4.
Political explanations (political actors and political action)

Strong left political parties in government

Public opinion: omitted from the analysis (see pp. 689-690)

Interest groups: omitted, “the uneven success of IGs in blocking NHI
points to the need to model the nature of IGs group politics”

Political leadership, strategy, policy model: ommitted (see pp.702-3)
From here on: Based on Blake & Adolino 2001
6. DETERMINANTS OF NHI REFORM: QCA measurement
CONFIGURATIONS
COUNTRIES
Success NHI
Failure NHS
5 factors +:
SUELC
Sweden, Norway
2
0
4 factors +:
SuELC
Austria
1
0
SUeLC
Denmark, Finland
2
0
SUElC
Luxemburg
1
0
sUELc
United Kingdom, New Zealand
2
0
SUeLc
Iceland
1
0
SUElc
France
1
0
SUelC
Japan
1
0
SueLC
Belgium, Germany, Netherlands
3
0
SUelc
Italy
1
0
Ireland
1
0
SuELc
Australia, Canada
1
0
sueLC
Switzerland?
0
1
1-0 factors +: suelC
Switzerland?
0
1
USA
0
1
3 factors +:
2 factors +:
sUElc
suelc
Supportive culture Unitary Executive dominance Left rule Corporatism
6. DETERMINANTS OF NHI REFORM: Analysis
1.
In the most generous WS, all 5 causes present: NOR, SWE
2.
Given a supportive culture, a left party, and a corporatist pattern of IGs
intermediation, NHI enacted even if unfavourable political institutions

AUS, DEN, FIN, BEL, GER, NETH
3.
Unitary states with supportive cultures, enacted NHI even if rest of
conditions unfavourable

ICE, FRA, ITA, JAP
4.
Anglosaxon countries with a dominant executive and left parties enacted
NHI in spite of rest of factors unfavourable

UK, IRE, CAN, AUSL, NZ
5.
Causes of American excepcionalism: “The USA [is] the only country with
unfavourable conditions in all 5 vars.”
MAIN CONCLUSION: “To date, the absence of favourable [(political)
institutions] has only been overcome by the simoultaneous presence of all
three other supportive factors (culture, labour party, corporatism)”
7. POLICY IMPLICATIONS FOR THE USA (pp. 702-3)
A. Reform political institutions (institutionalists)

Unlikely, rules of constitutional revision very tough
 OK for Executive dominance and Fedralism, but what about party
discipline (part of E) or corporatism (C)?? NOTE: C defined as an
institution, but in the discussion treated as a sociopolitical actor (Unions)
B. Mobilize political support (action-centred)

Need for the (1) Democratic party to overcome internal divides:
progressive statists (similar to SD) mixed with liberals/conservatives
 NOTE Amenta (2004) on North/South divisions within D party

Need to develop strategies for (2) influencing public opinion, so that a
supportive culture can develop; (3) mobilizing sociopolitical actors (e.g.
citizen associations, social movements) which could play the role of unions
 NOTE Briggs (1961) on USA 1935 SS Act and UK 1945 NHS