Politics of Risk-Taking: Welfare State Reform in Advanced Democracies (Amsterdam University Press - Changing Welfare States Series)

249 Pages·2010·0.76 MB·English

by  Barbara Vis

Barbara Vis
Politics of
s
e
t
a
B t
s
a Risk-taking
r e
b r
a a
r f
a l
e
V w
i
s g
How much and in which direction have the welfare states of Western n
i
g
democracies changed over the past decades? Moreover, under which Welfare State Reform in Advanced
n
conditions have governments enacted these changes? Based on insights a
h
from prospect theory, a psychological theory of choice under risk, Vis c Democracies
demonstrates ably that the context in which governments fi nd themselves
P
(losses or gains) affects their attitude towards risk and thereby the
o
degree and type of reform they pursue. Facing socio-economic losses or
l
i
political ones, governments accept the electoral risk involved in unpopular t
i
reforms, such as benefi t cutbacks; confronting gains, they steer away from c
s
them. The study’s new theoretical stance and innovative methodological
o
approach (fuzzy-set analysis) make Politics of Risk-taking a must read for
f

policymakers, scholars as well as students interested in the politics of welfare R
state reform. i
s
k
-
Barbara Vis is assistant professor in comparative politics at the VU University t
a
Amsterdam. A Veni grant from the Netherlands Organisation of Scientifi c
k
Research (NWO) supports her current research. i
n
g
“Given the electoral risks, the question of why governments reform the welfare-state at all has
long been in need of an answer. Based on prospect theory, Politics of Risk-taking offers an
original answer. It is a must for anyone interested in the politics of welfare-state reforms.”
Prof. Christoffer Green-Pedersen, Department of Political Science, University of Aarhus, Denmark
isbn 978 90 8964 227 1
www.aup.nl
Amsterdam University Press
9 789089 642271
A m s t e r d a m U n i v e r s i t y P r e s s
omslag barbara vis_156x234mm_2.indd 1 03-03-10 15:02
politics of risk-taking
CHANGING WELFARE STATES
Advanced welfare states seem remarkably stable at fi rst glance. Although
most member states of the European Union (EU) have undertaken compre-
hensive welfare reform, especially since the 1990s, much comparative wel-
fare state analysis portrays a ‘frozen welfare landscape’. Social spending is
stable. However, if we interpret the welfare state as more than aggregate so-
cial spending and look at long-term trends, we can see profound transfor-
mations across several policy areas, ranging from labour market policy and
regulation, industrial relations, social protection, social services like child
care and education, pensions, and long-term care. Th is series is about tra-
jectories of change. Have there been path-breaking welfare innovations or
simply attempts at political reconsolidation? What new policies have been
added, and with what consequences for competitiveness, employment, in-
come equality and poverty, gender relations, human capital formation, and
fi scal sustainability? What is the role of the European Union in shaping na-
tional welfare state reform? Are advanced welfare states moving in a similar
or even convergent direction, or are they embarking on ever more divergent
trajectories of change? Th ese issues raise fundamental questions about the
politics of reform. If policy-makers do engage in major reforms (despite the
numerous institutional, political and policy obstacles), what factors enable
them to do so? While the overriding objective of the series is to trace tra-
jectories of contemporary welfare state reform, the editors also invite the
submission of manuscripts which focus on theorizing institutional change
in the social policy arena.
editors of the series
Gøsta Esping-Andersen, University of Pompeu Fabra, Barcelona, Spain
Anton Hemerijck, VU University Amsterdam, the Netherlands
Kees van Kersbergen, VU University Amsterdam, the Netherlands
Kimberly Morgan, George Washington University, Washington, USA
Romke van der Veen, Erasmus University, Rotterdam, the Netherlands
Jelle Visser, University of Amsterdam, the Netherlands
Politics of Risk-taking
Welfare State Reform
in Advanced Democracies
Barbara Vis
Cover illustration: Th eo van Doesburg (1883-1931), De kaartspelers (Th e
Cardplayers), 1916-1917
Cover design: Jaak Crasborn bno, Valkenburg a/d Geul
Layout: V3-Services, Baarn
isbn 978 90 8964 227 1
e-isbn 978 90 4851 236 2
nur 754
© Barbara Vis / Amsterdam University Press, Amsterdam 2010
All rights reserved. Without limiting the rights under copyright reserved
above, no part of this book may be reproduced, stored in or introduced
into a retrieval system, or transmitted, in any form or by any means (elec-
tronic, mechanical, photocopying, recording or otherwise) without the
written permission of both the copyright owner and the author of the
book.
Table of Contents
Tables and figures 8
Acknowledgements 9
1 The puzzle and its pieces 13
1.1 Welfare state reform: Politics of risk-taking? 13
1.2 The risk involved in welfare state reform 17
1.3 Arguments in a nutshell 20
1.4 Empirical approach 22
1.5 Structure of the book 24
2 Fuzzy-set analysis 27
2.1 Introduction 27
2.2 Why not use a traditional approach? 27
2.3 The alternative: Fuzzy-set analysis 29
2.4 Concluding remarks 37
Part I The degree and shape of welfare state reform
3 Radical change or much ado about nothing? 41
3.1 Introduction 41
3.2 Conceptualization and operationalization of workfare 44
3.3 Stage one: Comparative analysis 50
3.4 Stage two: Fuzzy-set ideal type analysis 59
3.5 Concluding remarks 69
4 Which governments pursue reform and how much? 73
4.1 Introduction 73
4.2 Case selection 73
4.3 O perationalization of unpopular and not-unpopular reform 77

4.4 The pattern of reform 85
4.5 Concluding remarks 88
Part II Explaining welfare state reform
5. What existing studies have to offer and why they fail 91
5.1 Introduction 91
5.2 Institutions 94
5.3 Politics 97
5.4 Socio-economic change 100
5.5 Ideas 103
5.6 Concluding remarks 106
6. Bringing in prospect theory 109
6.1 Introduction 109
6.2 Features of prospect theory 110
6.3 Prospect theory versus expected utility theory 116
6.4 Problems in prospect theory 118
6.5 Applications of prospect theory in political science 121
6.6 A theory of the politics of welfare state reform 125
6.7 Concluding remarks 131
7. Politics of risk-taking 133
7.1 Introduction 133
7.2 Losses or gains? 134
7.3 The causal conditions 138
7.4 Findings 143
7.5 Concluding remarks 154
Part III Conclusion
8. Risk-taking in welfare state reform: Summary and implications 159
8.1 H ow much and in which direction have welfare states changed? 160
8.2 U nder which conditions do governments pursue reform? 163
8.3 Contributions to existing theories 166
8.4 Methodological contribution 169
8.5 Concluding remarks 170
 TABLE OF CONTENTS
Appendices 173
Appendix A: Tables 173
Appendix B: C oding of the degree of unpopular reform pursued by British,
Danish, Dutch and German Cabinets, 1979-2005 180
Appendix C: Coding of the political position of British, Danish, Dutch and
German Cabinets, 1979-2005 193
Notes 209
References 215
Index 243
TABLE OF CONTENTS 
Tables and fi gures
Tables
2.1 Set-theoretical relationships and necessity and sufficiency 34
3.1 Spending on active labour market policies 52
3.2 Average net replacement rates UI and sick pay 54
3.3 Strictness of employment protection 57
3.4 Property space for shifts in welfare and workfare 60
3.5 Fuzzy membership for shifts in welfare and work 64
3.6 Summary of changes 1985-1995, 1995-2002 and 1985-2002 67
3.7 Summary of not-unpopular and unpopular reform 71
4.1 The development of active spending and replacement rates 79
4.2 Development of UI replacement rates, 1979-2002 82
4.3 Establishing the fuzzy-sets Benefit Cutbacks and Activation 82
4.4 Development of ALMP spending, 1980-2003 84
4.5 Fuzzy-set scores for Unpopular Reform, Benefit Cutbacks and Activation 85
6.1 Domains and risk attitudes 127
7.1 Fuzzy-set scores WSE, WPP and RIGHT 140
7.2 Coding scheme for the fuzzy-set RIGHT 142
7.3 Truth table for the outcome Unpopular Reform 144
7.4 Membership scores of cases in sufficient paths 149
7.5 Truth table for the outcomes Activation and Benefit Cutbacks 150
7.6 Membership scores of cases in sufficient paths 155
Figures
4.1 The pattern of reform 87
6.1 A hypothetical value function 113

Acknowledgements
Like many books, this one has been many years in the making. For most
of these years, however, I actually did not know that working on the book
was what I was doing. The ideas on the degree and shape of welfare state
reform that the first part of the book presents, for example, originated
during my MSc in Political Science at the University of Amsterdam. At
the time, I would not have believed that some of these ideas would some
years later find their way into an actual book. I have many individuals and
institutions to thank for this, and it is my great pleasure to mention some
of them here.
Without having been given the opportunity to do a PhD project on wel-
fare state reform at the Department of Political Science of the VU Univer-
sity Amsterdam, I probably would not have written this book since it is a
substantially revised version of my PhD dissertation. Kees van Kersbergen
and Hans Keman, my PhD supervisors and promotoren, have been crucial
in this respect and I owe them both great intellectual debts. In fact, it
would be hard to overestimate what I have learned from them over the
years. They taught me what being an academic is like, among other things
by taking me on board on several of their projects. These experiences
were as enjoyable as they were conducive to developing my own writing
and thinking. They also have definitely shaped this book and made many
helpful comments on previous parts of it.
The Department of Political Science at the VU University Amsterdam
proved to be a particularly stimulating department to do a PhD and, luck-
ily, it turned out to be an equally pleasant place to work as an assistant
professor. Almost all the members of the department have at one or more
points in time offered useful input for the papers that have found their
way in this book, for which I am grateful. A special word of thanks goes
to my fellow PhD students for the many discussions on prospect theory,
fuzzy-set analysis and much more, in particular to Tanja Aalberts, Jasper
Binnema, Catherine de Vries, Jasper de Raadt, Laura Horn, Arjan Schakel,
Anne Marije van Essen, Arjan Vliegenthart and Angela Wigger.
