Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 14
Although Wiseman appears to have coined the use of the term “voucher” to refer to
demand-side subsidies, tracing the origins of the voucher concept itself is greatly
complicated by the fact that, as Blaug notes, when it comes to vouchers, “it all depends
on what you mean,” 6 since, in Bradford and Shaviro’s words, “there are no platonic
vouchers.” 7 Does the Canadian health care system, where the government is billed
directly for health services without any financial exchange between provider and
consumer, constitute a voucher scheme? Are co-payment plans for higher education
voucher schemes? Should taxable benefits be regarded as voucher mechanisms? None of
these questions can be answered by comparing the case in point against an established
standard of “voucher-ness.”
The debate over the definition of “voucher” is not of crucial import, since in a public
policy context, what matters most is what a particular plan actually does or is likely to do.
Nor, as it is important to remember, did voucher programs themselves originate from
scholarly debate about vouchers. Rather, numerous voucher-like programs, such as food
stamps and rent subsidies in various jurisdictions in the United States and health
insurance and legal aid in Ontario, predate the contentious debate touched off by
education vouchers.
In any debate, however, it is useful to have a working definition of what is being
disputed, and to this end a number of scholars have attempted to develop a model for
identifying and classifying voucher schemes. Blaug proposes a “voucher tree,” with
“limited, fixed-value” coupons redeemable against uniform fees at the summit and
“unlimited, supplementable,” fee-indexed and income-scaled vouchers at the base (see
Figure 2.1). 8 Barr defines vouchers generally as social good provision plans where
production and choice about individual consumption are private, while finance is entirely,
or almost entirely, public. 9
It is often taken for granted, as in Barr and Blaug, that voucher schemes assume
private “production.” However, Shaviro and Bradford provide an expanded definition
which includes systems in which vouchers are redeemed in a market of competing public
providers, such as a scheme where public schools are “de-zoned” and must then compete
for student enrollment. According to Shaviro and Bradford’s more flexible definition,
vouchers are policy programs which tend to possess, in varying degrees, four “voucherlike”
characteristics: grant[s] to consumers based on personal or household
characteristics; intermediate choice (some choice within the “favored category,” such as
between schools, doctors and alternative expenditures that fit the definition of medical
care); supplier competition (the allowance of competition between suppliers); and
declining marginal rate of reimbursement (it is argued that uncapped programs are not
considered as providing vouchers). 10 Perhaps the most flexible definition of all is
proffered by Bridge, who characterizes vouchers as “limited authorizations to spend
public funds.” 11
Like Bridge, we favour a straightforward and inclusive definition of the voucher, and
have chosen to define a voucher as a tied demand-side subsidy, where public dollars
follow consumers rather than suppliers, with the objective of fostering competition