Rediscovering social investment in developmental welfare state ...

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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 : B A C K T O T H E F U T U R E productive outcomes. I proposed criteria for helping define and identify what makes existing social policies an investment. I have argued that theories that explain the welfare states‘ development are more advanced than those that explain its effects (at least its potentially broader effects). As a result, we do not know enough about the benefits relative to the widely perceived costs of the welfare state. I surmised that the promise of ongoing research has been hampered by viewing the welfare state as a response to developmental problems and not also in part a source of development and contributor to production. I concluded that there is a need to reorient research away from how countries cluster together into regimes or mutually exclusive worlds and toward disaggregating effort at the policy level based on theoretical expectations grounded on the possibility of productive (and not just protective) effects. I formulated a set of principles reflecting this possibility and categorized, as developmentalist, several mature welfare state social policy that I labeled DWSPs. This framework compelled a reappraisal of the political economic roots of welfare states and what classical ideas teach us about the limits of markets and role of the state. The analysis yielded limited evidence for the predicted effects of policies that most closely express these developmentalist principles. As rapid economic and social changes have unfolded at the advent of the 21st century— accompanied by the internationalization of social policy ideas, opportunities for policy transfer, and a trend toward hybridity—there has been a temptation to succumb to linguistically popular discourses and pragmatic policy prescriptions. Policymakers should beware the enticing rhetoric and alluring fads that periodically sweep through the social protection world. They almost always entail simplifications that are too good to be true, promising returns that are premised on but rarely recognize a host of contributing socioeconomic, institutional, and other factors that enable these returns. The ongoing EU debate about the modernization of social protection and discourse associated with the new social investment state threatens to distract us from contemplating the value of traditional social protection policies and recognizing their developmental roots. I asked whether universal and in-kind benefits—old social democratic preferences that contradict economic commonsense—can be justified on the grounds of extensive market failures (especially information failure), underutilization of human potential, costs associated with not preventing poverty, and thereby a wide scope for merit goods. This paper recognizes the potential in the notion of social investment but begs scholars to proceed cautiously in its use. Advocates of institutional welfare states need to fully understand the way that longstanding social policies have entailed and continue to constitute productive social investments. Doing so hinges on our ability to understand the market failures for which they implicitly compensate, lest what emerges from this most recent phase of welfare state thinking is an anemic version of the once robust welfare state. The prospects for a social democratic as opposed to neoliberal vision of social investment requires us to penetrate the opaque veil behind which vital synergies, cumulative effects, and functional equivalencies are obscured and may be rendered dormant or severed all together in the event that critical aspects of the welfare state are unwittingly rolled back. Resisting the lure of Occam‘s razor, theoreticians and empiricists must work hand-inhand to better understand how the traditional core of the welfare state cultivates, albeit in part fortuitously, the productive soil of western societies. C E N T E R F O R S O C I A L D E V E L O P M E N T W A S H I N G T O N U N I V E R S I T Y I N S T . L O U I S 45
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 : B A C K T O T H E F U T U R E References Acemoglu, D., & Pischke, J.-S. (1999). Beyond Becker: Training in imperfect labour markets. The Economic Journal, 109(453), 112–42. Ackerman, F. (1997). National development: From basic needs to the welfare state. In F. Ackerman, Kiron, D., Goodwin, N. R., Harris, J. M., & Gallagher, K. (Eds.), Human well-being and economic goals (pp. 281–291). Washington, DC: Island Press. Amenta, E. (2003). What we know about the development of social policy: Comparative and historical research in comparative and historical perspective. In J. Mahoney & D. Rueschemeyer (Eds.), Comparative historical analysis in the social sciences (pp. 91–130). Cambridge, UK: Cambridge University Press. Andersson, J. (2005, July). Investment or cost? The role of the metaphor of productive social policies in welfare state formation in Europe and the U.S. 1850–2000. Paper presented at the World Congress in Historical Sciences, Sydney, Australia. Retrieved from http://www.iisg.nl/ishc/index.html Andersson, J. (2007). Socializing capital, capitalizing the social: Contemporary social democracy and the knowledge economy (Center for European Studies Working Paper Series #145). Retrieved from http://www.people.fas.harvard.edu/~ces/publications/docs/pdfs/Andersson.pdf Andersson, J. (2008). Between growth and security: Swedish social democracy from a strong society to a Third Way. Manchester, UK: Manchester University Press. Andersson, J. (2009a). The library and the workshop: Social democracy and capitalism in the knowledge age. Redwood City, CA: Stanford University Press. Andersson, J. (2009b). Social democracy without a future? Social Europe Journal. Retrieved from http://www.social-europe.eu/2009/12/social-democracy-without-a-future/ Antonucci, L. (2010). Social investment in Europe: More than a third-way? ‗Inequalities: Research and Reflections from both Sides of the Atlantic.‘ Retrieved from http://inequalitiesblog.wordpress.com/2010/11/26/social-investment-in-europe-morethan-a-third-way/ Arkhiiereiev, S., & Schwodiauer, G. (2008). The equity-efficiency relationship: The double criterion versus Pareto efficiency (Otto Von Guericke University Magdeburg, FEMM Working Paper No. 38). Retrieved from http://www.fww.ovgu.de/fww_media/femm/femm_2008/2008_38.pdf Arter, D. (2003). Scandinavia: What‘s left is the social democratic welfare consensus? Parliamentary Affairs, 56(1), 75–98. Arts, W., & Gelissen, J. (2002). Three worlds of welfare capitalism or more? A state-of-the-art report. Journal of European Social Policy, 12(2), 137–58. Atkinson, A. B. (1995a). Incomes and the welfare state: Essays on Britain and Europe. Cambridge, UK: Cambridge University Press. Atkinson, A. B. (1995b). On targeting Social Security: Theory and Western experience with family benefits. In D. Walle & K. Nead (Eds.). Public spending and the poor (pp. 25–68). Washington, DC: Johns Hopkins University Press. C E N T E R F O R S O C I A L D E V E L O P M E N T W A S H I N G T O N U N I V E R S I T Y I N S T . L O U I S 46
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