When Is a Change Big Enough to Be a System Shift? Small System‐shifting Changes in German and Finnish Pension Policies

In the wake of Esping‐Andersen's and Pierson's landmark publications, comparative welfare state research has revolved around the retrenchment of social policy and the transformation of welfare state regimes. One of the chief problems of these studies is the treatment of time. Very often, changes are incremental and their real impacts are not immediately visible but take years or even decades before the consequences fully materialize. The purpose of this paper is to discuss those incremental processes—that consist of series of smaller “not‐system‐shifting changes”—which may gradually change central features of a welfare state. Pension programmes, spanning long time periods, provide a good example. Only in some rare cases were pension schemes reformed in one step and in such a way that one can definitely ascertain a system shift. Most changes, however, are gradual, and recurrently enacted minor adjustments seem to leave the basic principles of the scheme intact. In this paper pension reform policies in Germany and Finland will be used to answer the question of when a change is big enough to be labelled as a system shift. It is argued that small “not‐system‐shifting” changes of the last two decades will eventually alter the basic characteristics of old‐age security in both countries.     

From Pavement to Piazza: Grassroots Social Work to Counteract the Globalization of Marginality

This paper—inspired by the experience of grassroots social work in Naples begun by M. Borrelli in the 1950s—emphasizes that “consciousness‐raising” and “community development” can be useful processes to stimulate responsible social participation on the part of the most marginal individuals and groups. To overcome a bureaucratic and pietistic model of the welfare state which serves in the long run to increase their dependence and socio‐cultural subordination, there is a need for alternative social policies, capable of improving people's empowerment and social citizenship. Giving more resources and decision‐making power to the most marginal could amount to changing an unfair and oppressive society from the roots up. This goal remains a moral imperative for both professional and voluntary social workers who believe in a fair, non‐violent and ecological model of development. Unfortunately, in Italy as elsewhere, neo‐liberal reforms of welfare states are tending in the opposite direction, partly as a result of out‐of‐date functionalist theories and by means of a worrying process of welfare marketization and globalization that actually increases the exclusion and marginality of the lower classes. This paper takes issue with current neo‐liberal trends by returning to a territory‐based and resident‐focused image of social work. This way, non‐profit agencies can play a more active and stimulating role in support of communitarian networks and help avoid the risk of the Third Sector's alternative spur being compromised by the otherwise “commodification” of welfare. Only in this way might one stop the transformation of non‐profit organizations into mere private providers for a buyer/controller state, more business‐minded than really concerned with freeing the poor and the marginal “underclass” from subordination and exclusion.     

Children against parents? The politics of intergenerational recalibration in Southern Europe

Traditionally, Southern European countries displayed remarkably elderly biased social policy arrangements. This article introduces the notion of intergenerational recalibration to capture reforms aimed at rebalancing the generational profile of Southern European welfare states via the expansion of family policy and social assistance schemes—both monetary benefits and care services—and retrenchment in the field of pensions. Then, it elaborates theoretically on the political dimension of this policy strategy, focusing on the implications of the peculiar combination of expansionary and retrenchment reforms, to advance the hypotheses that domestic politics would prevent the realization of such an agenda, whereas the latter would be favored by a major role of supranational actors, especially the European Union. To test these hypotheses, we systematically analyze policy trajectories in the field of pensions and social assistance in Italy and Spain between the mid‐1990s and 2016. This allows, first, to argue that investment in “pro‐children” measures has not adequately balanced the reduction of pro‐parents expenditure and, second, to question the idea that domestic political incentives to expand “pro‐children” policies are necessarily too weak as well as the “enabling” role of external pressures in pursuing intergenerational recalibration.     

When Do Benevolent Capitalists Change Their Mind? Explaining the Retrenchment of Defined‐benefit Pensions in Britain

This paper explores the politics of welfare retrenchment, but differs from much of the current literature in this area by focusing not on the decisions of politicians but those of private sector employers. In countries with a large private welfare sector, employers are major social policy players with a significant influence on the generosity of welfare provision, but the rationale behind their actions is not well understood. To explore these issues, a case study is used of the recent fundamental change in UK occupational pension provision, involving a rapid shift from defined‐benefit to defined‐contribution pensions. The paper shows by means of a micro‐simulation of the relative performance of defined‐benefit, defined‐contribution and state pensions that this shift represents a significant retrenchment. It suggests, using historical material, interview data and insights from behavioural economics, that existing explanations for this change, while valuable, have important gaps because they are based on too narrow a conceptualization of business motives. In this regard, the paper highlights the importance of herd behaviour.     

Narrowing of Public Responsibility in Finland, 1990–2010

Public responsibility in Finland has narrowed in the last 20 years while the sphere of the private sector has been increased. The economic crisis of the early 1990s was not the cause, but an accelerator of public sector/welfare state retrenchment in Finland. Based on which, it was easy for the advocates of neo‐liberal reforms to argue that the changes were a must. The welfare state programmes however, are popular among the Finnish population and therefore large one‐time cutbacks have not been possible beyond the immediate aftermath of the economic crisis. This article looks into three different methods through which the Finnish welfare state has been gradually cut since then: (1) by not raising income transfers along with the rising cost of living and wages; (2) by reducing funding of public services; and, on the other side of the coin (3) through regular tax cuts contracting the revenue side. Welfare state retrenchment in Finland has therefore been achieved in a subtle fashion through slow gradual weakening of social programmes on one hand, and through cuts in revenue on the other that have left proportionally more in the hands of the wealthier. These combined movements have resulted in a drastic reversal in the trend in income inequality in Finland.     

‘A Common Sense of the Times’? Neo‐liberalism and Changing Public Opinion in New Zealand and the UK

Neo‐liberalism represents a significant and enduring shift in the politics shaping social policy. Although frequently ascribed a hegemonic, all‐powerful status that focuses our attention on the coherence found in neo‐liberal policies, this article builds on scholarly work highlighting variegation in the neo‐liberal project across different policy areas, national settings and time periods. Specifically, it employs Peck's and Tickell's (2002) view that neo‐liberalism has gone through multiple phases in response to both external and internal crises as an entry point for studying neo‐liberalism's impact on public support for the welfare state. Drawing upon New Zealand and British attitudinal data, the article argues that public reactions to an early period of retrenchment (‘roll‐back’ neo‐liberalism) differ from those reported in the ‘roll‐out’ or embedding phase of neo‐liberalism implemented by Third Way Labour Governments in both countries. Indeed, continuing public support in many policy areas arguably contributed to the internal crisis that provoked an adaptation to the neo‐liberal project. The article further explores public support for the welfare state following the external crisis provoked by the financial meltdown of 2008–09 asking whether New Zealand and British attitudes showed signs of resisting austerity measures or whether they, instead, indicated a third, ‘roll‐over’ period of neo‐liberalism where the public accepted not only a neo‐liberal economic agenda but also the need for further retrenchment of the welfare state. Conclusions about the politics of social policy at the level of public opinion offer both good and bad news for welfare state advocates.     

The Great Recession and Welfare State Reform: Is Retrenchment Really the Only Game Left in Town?

By 2010, when the Greek sovereign debt crisis changed into an existential crisis of the euro, all developed democracies entered a phase in which they had to consolidate their budgets, typically implying a politics of austerity. The scholarly literature, as well as the popular press, suggests that – consequently – welfare retrenchment and cost containment became the only games left in town. In this article, we study the welfare state reform measures taken between 2010 and 2012 in four countries characteristic of mature welfare state regimes (liberal, UK; conservative, Germany; social democratic, Denmark; and hybrid, the Netherlands) to examine empirically whether austerity has indeed become the only item left on the policy menu. Our analysis reveals that retrenchment features prominently on the agenda everywhere, but nowhere by itself. While compensation for income loss is rare since 2010, this still happens. More unexpectedly, reforms in line with a social investment agenda (like expansion of child care or active labour market policies) are still being pursued in all our four cases.     

Pension reform in the Baltic States: Convergence with “Europe” or with “the world”?

Abstract The Baltic States – Estonia, Latvia and Lithuania – join the European Union in 2004. This paper examines pension reform in the three countries over the past decade in the light of the “European social model” and the “World Bank model”. Part one seeks to define these two models. It shows how the former emphasizes income adequacy and solidarity while the latter stresses fiscal sustainability, savings and economic growth. Part two looks at reforms made and proposed. Initial reforms involved raising the retirement age and relating benefits more closely to earnings and service. This resulted in the establishment of pension systems similar to those in many European countries. Subsequent reforms involved attempts to shift from a publicly financed, purely “pay‐as‐you‐go” system to one based upon “funding” and private, individual accounts. Such systems have been promoted by the World Bank. The appropriateness of this approach – its high transition costs, potentially high administration costs, and longer‐term implications for the relative income status of retired people – is questioned. Part three draws conclusions. In the short and medium term, policymaker should safeguard income adequacy rather than seek the doubtful advantages of funding – in other words, look more to “Europe” than to “the world”.     

Chinese Workfarism: Logics and Realities of the Work–Welfare Governance Model

Given the fundamental disparities between China and the west in political structures, social values, policy regimes, and problem loads, it is meaningful to use “workfare” as a challenging analytical standpoint and detect that China had created unique workfare regimes to build up the past state‐socialism and the present market‐socialism. In the era of state‐socialism, the dual‐track welfare system, apparently adopting an institutional approach to the city and a residual approach to the countryside, was purposely integrated with the segregated urban‐rural work system, constituting a China‐specific workfare regime in which the whole workforce was included and effectively organized into the socio‐economic order. Under market‐socialism that appears as an awkward hybrid, the work‐welfare governance model is being gradually transformed into a pragmatic, much marketized one, though without idealogical legitimacy as well as a clear‐cut vision. On the one hand, employment differentiation and income disparity resulted from a strategic shift from the “reform‐without‐losers” stage to the “reform‐with‐losers” stage in the labor market, together with a large scale rural‐to‐urban labor migration, are structuring a market‐oriented, stratified employment system. On the other hand, while being a welfare laggard, China's productivist, status‐segregated welfare system is taking shape owing to a set of welfare reforms along the line of marketization and societalization. All these changes would imply that China is converging towards a neo‐liberal regime in which the role of the state is residual to the market.     

The Trajectory of Post-communist Welfare State Development: The Cases of Bulgaria and Romania

Governments of countries undergoing a post‐communist transition face the dilemma of balancing conflicting demands for greater economic efficiency (to achieve a successful transition to a market system) with demands for enhanced social protection (to legitimize regime change through a visible improvement in living standards which includes vulnerable groups). This paper analyses the transition in Bulgaria and Romania. Unlike other European countries, these countries did not embark on retrenchment policies until the mid‐ to late 1990s, so convergence with policies of spending constraint elsewhere in Europe was belated and partial. The social problems created by strict economic policies, exacerbated by a determination to reorganize the post‐communist welfare states along the lines promoted by international organizations, are now being recognized. Post‐communist governments in South‐eastern Europe have belatedly started to address the social aspects of transition to democracy and the market. This probably reflects the process of regime change in Bulgaria and Romania, which has been characterized as a “two‐step transition to democracy”, with liberal governments only succeeding transformed communist elites in power after a protracted transition.     

Swedish Family Policy – Continuity and Change in the Nordic Welfare State Model

The main question addressed in this regional issue is whether or not the Nordic welfare states can still be considered a distinct welfare regime cluster given recent changes, such as the introduction of more private elements into the welfare state. The Nordic welfare states are often described as emphasizing full employment, economic and gender equality, and universal access to cradle‐to‐grave welfare state benefits and services. In the case of Sweden, often pointed to as the model of a social democratic welfare state, such elements remain intact in most aspects of the welfare state, even given the challenges presented by the global neo‐liberal economic paradigm since the 1970s. One way to determine whether or not the Nordic welfare states remain a distinct cluster is to provide an in‐depth examination of various welfare state policies in each Nordic country. To contribute to this analysis, an investigation of family policy in the Swedish context will be provided. Even given recent challenges, such as the introduction of private for‐profit childcare providers and a home care allowance, I argue that Swedish family policy has remained largely social democratic in its underlying goals, and thus acts to support the case for a distinct Nordic welfare regime cluster.     

The Third Way and Social Welfare: The Myth of Post-emotionalism

The “passive” welfare state was accused of promoting a dependency culture. “Active” welfare and the “what works?” approach of Britain's New Labour government is allegedly implicated in an age of post‐emotionalism, in which people are largely indifferent to the needs of others and committed primarily to their personal well‐being. This article, first, seeks to extend recent debates about agency and motivation in social policy and relate them to the notion of post‐emotionalism. Second, it draws on a recent empirical study of popular and welfare provider discourses, which suggests that popular opinion can accommodate an appreciation of human interdependency, while welfare providers remain committed to a public service ethos. None the less, Third Way thinking is associated with a narrowing of solidaristic responsibilities. The problem for the future of health, social care and state welfare policies lies not with the imagined consequences of post‐emotionalism, so much as with an ideological context that perpetuates a distorted ethic of responsibility.     

A comparative analysis of pension reforms and challenges in Ghana and Nigeria

Ghana and Nigeria recently joined a number of countries that have incorporated fully‐funded defined contribution pension programmes into their national social security arrangements. Contemporary analyses of pension reforms, however, continue to focus on middle‐income countries in Latin America and Central and Eastern Europe, as well as on Member States of the Organisation for Economic Co‐operation and Development, thereby marginalizing recent pension policy reforms in sub‐Saharan African countries. This article examines the complete and partial shifts to defined contribution pension programmes in Nigeria and Ghana respectively, and points to a number of contextual and contingency factors that challenge the use of defined contribution schemes as a means to address problems of benefit adequacy in the sub‐Saharan African context.     

How to Design a "Liberal" Welfare State: A Comparison of Canada and the United States

My aim in this paper is to show how differences in the programmatic design of two otherwise "liberal" welfare regimes have generated substantially different patterns of welfare state retrenchment and distributive outcomes since the 1970s. Welfare regimes are distinguished by the principles and rules that regulate transactions between the three institutional nuclei from which individuals derive their "welfare" in modern capitalist societies—the state, the market, and the family. Liberal regimes are characterized by a preference for market solutions to welfare problems. While Canada and the United States both represent paradigmatic instances of the liberal regime type, there are long-standing differences in methods both of financing and distributing benefits. Differences in programme design led to substantially different retrenchment strategies from the end of the 1970s, which in turn produced dramatically different distributive outcomes: rising inequality and poverty rates in the United States compared to relative stability in the distribution of income among Canadian families.     

The state of the German social insurance state: Reform and resilience

At the core of the German system of welfare provision stand social insurance schemes whose central role contributes to Germany being labelled a social insurance state. In recent decades, Germany has been experiencing major social policy reforms that are often evaluated as paradigm changes. These changes have been reflected in analyses that sometimes even questioned common classifications of the German welfare state. The article sheds light on recent developments that have affected the German system of social insurance. It focuses on four aspects of social insurance: benefits, financing, governance, and coverage. Although confirming many earlier analyses of reforms in detail and sharing assessments of changes such as retrenchment and marketization, the article nevertheless stresses that social insurance remains structurally intact and that the work–welfare nexus underlying welfare provision has been reinterpreted but not surrendered.     

Policy Change at a Time of Retrenchment: Recent Pension Reform in France, Germany, Italy and the UK

Two influential recent approaches to social policy in Europe imply (for different reasons) that the reforms currently on the agenda, which typically involve cost-containment, are peculiarly difficult to achieve. Esping-Andersen sees much of Europe as set in a "frozen welfare landscape", due to the power of the interests advantaged by the status quo. Pierson sees retrenchment as a peculiarly difficult problem for all governments, regardless of their political ideology. This paper reviews recent pension policy in France, Germany, Italy and the UK. It argues that developments in Germany indicate that it is possible to achieve appropriate policy change in the country which is often used as the paradigm of entrenched interests without major restructuring of the system. Conversely, recent reforms in the UK (seen by Pierson as the country which has achieved the most rapid changes) appear disproportionate to the scale of the problems faced and may have damaged pensioners' interests. This indicates that the capacity to achieve substantial reform is not necessarily in itself a virtue. The real issue is the quality of reform achieved.     

Pressures on State Welfare in Post‐industrial Societies: Is More or Less Better?

Although contemporary comparative welfare state research has advanced our knowledge of how welfare states respond to exogenous and endogenous pressures, the nature and implications of these pressures themselves on post‐industrial societies remains somewhat unknown. In the research literature phenomena such as globalization, Europeanization, demographics, individualization and changing labour markets are often claimed to put considerable pressure on welfare states. We analyse which of the alleged pressures are real “crises” or “challenges” to welfare states and which pressures should only be considered as “controversies”—phenomena whose impacts are nonsignificant, ambiguous, or have not been asserted. We suggest that pressures on post‐industrial societies may not, as is commonly believed, be countered with retrenchment and restructuring of welfare states. In fact, some pressures seem to call for more rather than less welfare state.     

The State and its Welfare State: How do Welfare State Changes Affect the Make‐up of the Nation State?

With respect to changes in the welfare states of OECD countries, scholars most of the time are looking for common trends; that is, they look for similar movements in different states, such as welfare state retrenchment, recalibration, etc. As we show in this article, data on welfare state spending and financing do not, however, support such stark tendencies like retrenchment. We therefore suggest looking for corridor effects rather than level effects, i.e. analysing changes in the dispersion of welfare state regimes rather than shifts in the mean values. Our analysis suggests that convergence, i.e. decreasing diversity among states in spending, financing and regulation patterns, may have been the most important pattern of welfare state change in the last three decades – a pattern easily overlooked in past and current research. Convergence of welfare state regimes also affects our views on the modern nation state itself since the varieties of welfare capitalism in the twentieth century are themselves an expression of the sovereignty and autonomy of the nation state. If nation states are forced to surrender national particularities, to mellow their characteristic differences and to move incrementally towards a one‐size‐fits‐all common model via ‘shrinking corridors’, such a blurring of welfare regimes, such a beclouding of difference, should also be regarded as a significant change taking place in the centre of the Western nation state's make‐up.     

A macro‐financial analysis of pension system reforms in emerging Europe: The performance of IRAs and policy lessons for Serbia

The article explores the initial macro‐financial performance of partial pension system “privatizations”— involving privately‐managed individual retirement savings accounts (IRAs) — undertaken in many emerging European countries. Using empirical data for a period of close to a decade, the evidence shows that returns on privately‐managed IRAs have been below the implicit rate of return of public pay‐as‐you‐go (PAYG) systems. High operating costs and undeveloped capital markets are identified as major contributing factors to the failure of privately‐managed IRAs to meet reform expectations. In light of empirical evidence, Serbia is advised to focus on parametric PAYG reforms and to avoid reforms that involve the partial “privatization” of the pension system.     

Safety nets in (the) crisis: The case of Greece in the 2010s

This paper deals with the question of how the social safety net in Greece responded to, and was transformed by, the social emergency of the 2010s. The outbreak of the Eurozone crisis caught Greek welfare woefully unprepared for what was to come. Thereafter, as the recession fuelled the “demand” for social protection, the austerity reduced its “supply.” Nevertheless, this is not a straightforward case of austerity predictably causing welfare retrenchment or dismantling. Stringent budgets and policy inertia did result in reduced provision and diminished capacity to protect. Yet significant progress towards a less parochial and more effective social safety net also took place. The paper is an attempt to bring out the complexity and contradictions of recent developments. It concludes that the system of social protection that has emerged from the crisis is undoubtedly leaner, less robust in core policy areas such as pensions and health, but also more effective in protecting against extreme poverty than ever before.