Rediscovering social investment in developmental welfare state ...

R E D I S C O V E R I N G S O C I A L I N V E S T M E N T I N D E V E L O P M E N T A L W E L F A R E S T A T E P O L I C I E S :
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―Adequacy of provision to ensure high quality‖ suggests that DWSPs should be generous (i.e., that
the proportion of GDP spent on social expenditures should be relatively high), because only with
generous policies can there be an increased likelihood of both quality and coverage. ―Prevention of
future social costs as part of a long-term perspective‖ suggests that expenditures on family policy,
especially policies that improve family functioning when children are young, are likely to yield
greater returns over the long-term than policies directed at amelioration of problems after their
onset. ―Activation that reduces disincentives and maximizes the ability/incentives to earn‖ argues in
favor of family policies that enable market participation (e.g., provision of child care or assistance
with purchasing it) and a set of policies typically called active labor market policies (ALMPs), which
relies on incentives as opposed to sanctions to encourage employment. ―Access to goods and
services,‖ especially those that guarantee future capability, suggests that in-kind benefits are more
likely to ensure positive returns than cash benefits. ―Maximization of the utilization of resources‖
also argues in favor of in-kind benefits. If in-kind benefits are seen as being of high quality, they are
likely to result in high benefit uptake. Relatedly, ―guaranteed consumption of developmentally
beneficial goods and services‖ argues in favor of both in-kind and universal benefits. The universal
concept should guarantee access, which should lead to increased consumption, while in-kind
provision can ensure consumption of developmentally beneficial goods in a way that cash benefits
cannot. ―Entitlement based on relationship to economic development (not need, contribution, or
citizenship)‖ argues in favor of universal benefits and suggests there are resources that bear such a
strong relationship to economic development that they should not be based on income or status.
Note that this principle does allow for benefits being available only for those who fit particular
categories, if those categories are related to economic development. 35 ―Inclusiveness based on
increasingly stochastic risk/instability‖ also argues in favor of universal benefits on the grounds that
in addition to the traditional risk factors for poverty, increased uncertainty or unpredictability across
the life course relative to earlier historical periods (Bonoli, 2007; Hacker, 2008; Newman, 2008;
Vandecasteele, 2011) makes insurance more cost-effective and suggests that in order to prevent
problems, individuals should not have to already be low-income before being entitled to benefits.
All in all, the policies suggested by developmentalist principles include a greater emphasis on in-kind
and universal transfers, high overall levels of social expenditures, and families, children, and active
labor market policy. One would expect to see minimal means testing in developmentally essential
areas, policies that are nonstigmatizing and ensure uptake and access and incentives and indicator
targeting as opposed to sanctions and minimalist transfers, which may be harmful to others (e.g.,
dependents) in a developmentalist sense. 36
35 Rather than being based on conventional social insurance programs, citizens should be entitled to a range of benefits
not simply because they are citizens (again, see Johnson [2014a] for discussion of T. H. Marshall) but rather because
many citizenship-based entitlements arguably have positive economic consequences by virtue of addressing nonactuarial
and interrelated risks (interrelated in that prevention of costs and maximization of resources requires multiple
investments). In other words, the provision of basic goods for all citizens is assumed to be effective because a wide
range of social conditions may have economic consequences due to the coefficient of interrelation and the likelihood
that many social conditions have economic consequences.
36 The social development perspective would seem to imply an ―indicator-targeting or back-to-Beveridge approach‖
(Barr, 1998, pp. 267–269). Whereas the neoclassical view would support income testing through negative income taxes
(though limited as concerned with poverty trap), indicator targeting would suggest that making benefits conditional on
other characteristics is less likely to entail efficiency costs and more likely to prevent poverty. Ideal indicators are highly
correlated with poverty and exogenous to the individual (e.g., illness, old age, infancy, and—more controversially—
unemployment) (see also Kahn and Kamerman [1987] for more on factors that put families at risk of poverty). In reality,
as Barr suggests, some combination of these approaches (e.g., a small-scale negative income tax and categorical scheme)
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