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Her DPhil is focused on worklifebalance policies and connects to wider debates about work, families, childrenand equality. He was the joint academic coordinator with T. Meyer ofthe EU fifth framework project on private pensions and social inclusion, onwhich the chapter in this volume is based. On the basis of this project, he hasalso recently edited and contributed to Private Pensions versus Social Inclusion? Edward Elgar, , an assessment of the social inclusiveness of six publicprivate pension regimes in Europe with T. Meyer and B. Heis currently working with T. He has also publishedwidely on developments in British social policy from the end of the SecondWorld War to the present day.

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Areas of her expertise include: international comparison of health-care systems, health-care economics and new institutional economics. Rothgang, M. Cacace, S. Grimmeisen andC.

Welfare State Transformations - Comparative Perspectives | M. Seeleib-Kaiser | Palgrave Macmillan

From Heterogeneity to Homogeneity? Palgrave Macmillan, forthcoming ;and with H. Rothgang, S. Grimmeisen and C. Wendt, The Changing Role of. Cambridge University Press, John Clarke is Professor of Social Policy at the Open University where hisresearch and teaching interests remain focused on struggles over the futureof welfare states. Newman, N. Vidler and L. Westmarland Sage, He has also guest-edited a spe-cial issue of the journal Cultural Studies November on the theme ofGoverning the Social.

His research is focused on labour market policy and welfare state reformin comparative perspective. Hermain research areas concern comparative health-care policy, particularly thecases of Great Britain and Italy. Her research interests focus ongendered dynamics of family, informal care and paid employment.

His main research inter-ests are in Japanese education and social policy, especially child welfare.

He has also done comparative research in South Korea and the UK andhis current research topics include: higher education reform, international. Published on Dec View Download 3. A catalogue record for this book is available from the British Library. Adding these changes together is problematic. Moreover, the pattern of change may vary by service and over time. Most commentators would probably agree that the degree of direct state provision will continue to decline. However, this does not necessarily mean that state responsibility will decline depending on the roles for finance and regulation.

The first scenario is that the preferred model will be the state as funder and regulator. IEA, This is a model linked largely, but not exclusively, with the political right see Powell and Hewitt, For example, Freedland , p. The current trends appear to be towards the first model. As recommended by Think Tanks such as the IEA many years ago, and only partially implemented by the Conservatives, the promotion of individual choice from a range of public, private and voluntary sources paid for by state finance moves towards cells 2 and 3 in Figure 2.

This is a de facto voucher scheme. In the short term, Letwin was wrong. However, another indicator reveals that public consumption expenditures increased by 35 per cent in fixed terms from to This is a reminder that it is essential to include welfare services and not only cash transfers. As pointed out in Chapter 1, we need more adequate concepts to analyse welfare state change. In the Danish welfare state, we find substantial transformations with new mixes of collective responsibilities and new forms of public sector governance.

We also find retrenchment — but not very much. In the first place, we must analyse the complete mix of collective social responsibilities see also Chapter 1 above , not just state welfare. Conflict or consensual? The following analysis of welfare state transformations in Denmark focuses on three broad policy fields: labour market and unemployment policy, 33 34 Welfare State Transformations pensions and retirement, and welfare services health care, elderly care, child care and education.

Before addressing these policy areas, however, we present a brief analysis of the overall development of expenditures. Owing to space limitations, we restrict ourselves to Scandinavian comparisons where the Danish pattern deviates significantly from other Nordic countries. Expenditures Unlike the other Nordic countries, Denmark was hit by mass unemployment immediately after the oil crisis of —74, and Keynesian crisis policies only seemed to aggravate problems.

By unemployment and inflation rates were close to 10 per cent, state deficits had reached 10 per cent of GDP, and foreign debts accumulated rapidly Andersen, This paved the way for a Conservative—Liberal government —93 which immediately liberalized capital markets and switched to harsh cost containment policies in the public sector. Alongside tough measures from to cut private consumption, this served to cure structural imbalances in the economy, but at the expense of unemployment rates rising to This was largely continued by the Liberal— Conservative government which took over in Economic recovery from to was almost uninterrupted; unemployment declined to 5.

From the figures on public expenditures Figure 3. After explosive growth in the s and stagnation in the s, total expenditures reached a peak of By , the figure was nearly 10 percentage points lower see also OECD, , p. When mass unemployment hit Finland and Sweden in the early s, public expenditures sky-rocketed — in Finland from But expenditures soon went back to normal, and all Nordic countries have moved from large budget deficits to large surpluses. The Danish figures conceal a marked improvement of social services.

From to , cumulative growth of public consumption was as low as 6. From to , public consumption increased by However, in contrast to austerity measures in the s which contained few institutional changes — most of which were in fact towards universalism in child benefits, student allowances and home help services — economic prosperity has been accompanied by far-reaching institutional reforms since Andersen, , a.

Below we survey the main welfare policies. A paradigm shift towards a supply-side perspective was introduced almost over night in It had little immediate impact but served to shape subsequent policies. The Social Democrats developed new policies in accordance with the new paradigm, but did not embark on a neoliberal incentive or workfare course. However, from an outcome perspective it seems that the full impact of tighter conditionality may have been realized through formal and informal changes in implementation since Compensation rates When mass unemployment hit Denmark in —75, the benefit system had just been changed to one of the most generous in the world, with a compensation rate of 90 per cent of previous earnings Andersen, This figure has remained, but indexation of the upper ceiling lagged critically behind in the s.

Even the wage indexation of benefits since has contained a small, hidden under-compensation Andersen, For higher-paid workers, Denmark has the lowest compensation rate in Northern Europe, with the exception of the UK Hansen, , pp. If is taken as the reference year, compensation rates for an average production worker APW reveal radical retrenchment Korpi, ; Korpi and Palme, ; Green-Pedersen, a. Suspending indexation from to reduced the real value of maximum benefits by 15 per cent. Even by the maximum was 10 per cent below the level in real terms.

Traditionally, poverty rates among unemployed in Denmark have been much lower — and life satisfaction higher — than in other Nordic and European countries Whelan and McGinnity, However, comparing compensation rates of unemployment benefits for an APW can be misleading. First, the typical unemployed worker earns less than an APW.

Jonah D. Levy

Secondly, the most important change in many countries is the declining proportion receiving unemployment benefits. In Denmark, the proportion receiving unemployment benefits among those registered as unemployed has rather increased slightly and was about 85 per cent by By and large, the bourgeois governments until were guided by the same economic paradigm as the Social Democrats: more demand for labour power was the key to full employment — only it should come from higher exports Andersen, a.

Accelerating wage increases in were seen as evidence of the problem, and as an indication that the structural unemployment rate was around 8 per cent. In a commission report Udredningsudvalget, even the trade unions gave their consent Andersen, a; Torfing, Since , focus was on mismatch, inflexibility and other supplyside problems. Still, solutions were mainly Social Democratic: wage inflexibility minimum wages too high relative to productivity was recognized as a problem, but instead of adjusting wages to productivity, productivity should be adjusted to wages by means of activation and education.

In compromises with bourgeois parties in and — later called the second and third stages of labour market reform — duration of unemployment benefits was shortened to four years, and conditionality was strengthened in terms of active job-seeking, commuting time, and willingness to take any job.

Activation had been improved as a right in , e. But owing to negative evaluations of impacts Ministry of Labour, , activation came to be seen more and more as a disciplinary device. Movement along this path accelerated when the Liberal—Conservative government came into office in Duty to work, removal of disincentives and more efficient job placement were the main instruments. Two reforms stand out: More people to work , adopted in agreement with the Social Democrats, and an integration package labelled A new chance for all A dual welfare state?

In practice, even if More people to work was formally a package for the entire labour market, a large majority of those affected by the cutbacks were immigrants. In it was the other way around: general measures were included in an integration package for immigrants.

When the new rules were put into force by 1 April , only about persons lost their social assistance, but because of delayed implementation and temporary loopholes, the effects will not become visible until Christensen, This could indicate a move towards a dual welfare state with fewer social rights for immigrants. But much depends on how the rules are administered. With a Social Democratic government, corporatist boards guiding implementation at the regional level, and a legacy from 20 years of mass unemployment where tight controls appeared meaningless, rules were not exploited to their limits.

It is beyond doubt that since , the administration of benefits has become much more restrictive. Still, the most important driver of change is undoubtedly prosperity and the shortage of labour power. Since the municipal reform in —06, there has also been major change in the administration of active labour market policies ALMP Madsen, , State-run job offices for those registered as unemployed were formally merged with the municipal system for social assistance clients into municipal job centres.

It remains to be seen whether the social partners will find new and less formal ways to influence. Further, the government has welcomed private providers and tried to generate quasi-markets, although on a smaller scale than in the Netherlands or in Australia. Change in financing: towards privatization of social risk? In addition, there has been a silent revolution in the financing of the Danish unemployment benefit system. Similar to Finland and Sweden until , the unemployment system is a Ghent system, based on voluntary membership in unemployment insurance funds typically but not always controlled by the trade unions.

Essentially, the voluntary state-subsidized insurance system represents a liberal legacy, built on the privatization of social risk. Thus, this variant of the Ghent model functions almost like a mandatory public insurance. This was exactly what the bourgeois governments attempted to do in the s. Contributions were raised in , , and With some justification, one can speak of a change from a Social Democratic to a liberal model of unemployment insurance.

Another explanation is the separation between contributions to unemployment insurance and to early retirement allowance. Until , unemployment insurance contributions financed both schemes, but since , a separate contribution for early retirement was introduced, and contributions to unemployment insurance were not lowered accordingly.

Simultaneously, there were full tax deductions for contributions up to 73 per cent until , as against some 33—35 per cent since , because of a change of deductions in the tax reforms of and lower tax rates — widening of the tax base. Employees have paid a small amount for administration, plus about 80 a annually for insurance. True, duration and compensation rates have been cut, and a strong emphasis on security has been replaced by an emphasis on inclusion through work.

Still, cutbacks were from a very high point of departure in , and a replacement rate of up to 90 per cent remains generous for low income groups. To cope with incentive problems, there have been targeted efforts to remove disincentives, and to tighten conditionality Ministry of Employment, , pp. Policies have come to include elements of workfare; activation has turned into a works test and a sanction. With the exception for some immigrant groups, the system has remained effective in protecting against poverty.

Policies were shaped by a paradigm shift towards supply-side economics, but governments found alternatives to neoliberal solutions. From an outcome perspective, effective protection against poverty has largely been maintained, due to high minima, 42 Welfare State Transformations activation and long duration of benefits. Context is also important.

Harsher policies were adopted exactly because of the improved employment situation, and in that context their effects have been less dramatic. Finally, as to processes of change, there have been instances of rapid change as in , , and in — following shifts in governments. But most changes have been incremental and some went unnoticed like the change in the Ghent system. Policies have also been flexible: in , new leave and retirement arrangements were introduced to reduce labour supply, but as the employment situation improved, these schemes were abandoned Andersen, c.

In assessing the potentials for the future, it would be tempting to extrapolate from the trends of change during the last decade. However, we would rather predict that the current paths of change are exhausted. It seems almost impossible to tighten conditionality further. The most interesting question is whether one can envisage a reversal of trends, should large-scale unemployment return.

If not, the effects on poverty could be considerable. Pensions and retirement In pension and retirement policies, one also finds major transformations. The state component is becoming a means-tested residual. This has happened without legislation and without substantial political controversy. As it stands, the system will remain one of the most redistributive in the world. More controversial have been the changes in of the age brackets of the generous early retirement allowance currently from the age of 60 and old-age pension currently The full impact of the reform has gone largely unnoticed in public debates.

At this point, distributional consequences are considerable as the weakest groups on the labour market in particular women will lose a generous voluntary early retirement opportunity. Unlike the other countries, however, Denmark did not introduce an earnings-related second tier in the s.

Bibliographic Information

Schemes targeted at old-age pensioners only — Housing benefit for pensioners — Support for heating for pensioners Other individual supplements Tax exemptions and rebates Pillar 1 C. Fully funded public pensions Supplementary pensions contributions, funded Pillar 2. Collective Contribution financed private pensions Labour market pensions collective agreements Pillar 3.

Individual voluntary private pensions Figure 3. Since then, the Nordic countries have moved institutionally in very different directions. Figure 3. As a consequence of the tax reform pensions 44 Welfare State Transformations became fully taxable and were raised accordingly, but in a slightly tricky way as only the means-tested supplement was increased.

By , the meanstested supplement is of the same size as the basic amount each about a for a single pensioner. The majority of pensioners still receive the full pension Unlike in the other Nordic countries, it is small, flat-rate, and fully funded. Since the mids, it has gradually been extended also to the unemployed so that virtually everybody will receive an ATP in the future. In yet another supplementary, funded scheme was introduced, called special pensions savings SP.

Contributions are 1 per cent of all incomes, about the same as ATP contributions for an average production worker. In SP was made strongly redistributive, with equal pensions to all. This would have secured an extremely high equality among pensioners, but it was reversed immediately in by the Liberal—Conservative government which eventually suspended the entire scheme from to in order to stimulate private consumption.

At the time of writing, its future is uncertain. However, the most important component — which is often overlooked — is a special housing benefit scheme for pensioners, and support for heating, which were introduced in and , respectively. Although the housing benefits are income and wealth-tested most pensioners are currently eligible. Heating support, by contrast, is only for the poorest. This holds also for other individual supplements which are granted by municipalities on a more discretionary basis. Taken together, however, this means that effective minimum pensions are very high in Denmark.

A single pensioner who has no income at all beyond a basic pension, is a tenant, and pays a rent of a per month, has the same disposable annual income as a person receiving maximum unemployment benefits This should be taken into account when we consider the impact of the new element in the pension system: labour market pensions. Labour market pensions are fully funded and are usually administered jointly by the social partners.

They were introduced in collective agreements for white collar workers, mainly in the public sector, from the s onwards. In the s, the expansion had passed the point of no return; the only possibility of introducing collective earnings-related pensions was through labour market pensions negotiated as part of collective agreements Myles and Pierson, In the collective agreements, the target of contributions was raised to 12 per cent of which 4 per cent is paid by members, 8 per cent by employers.

The Changing Public-Private-Mix in OECD Healthcare Systems

These pensions are fully funded and also cover risks of disability. When they are fully phased in, they will most probably constitute the backbone of the pension system. Most actors originally thought of the labour market pensions mainly as a supplement, not as a replacement Andersen and Larsen, But it is an instance of layering and differential growth Streeck and Thelen, b which slowly transforms the entire system. As in the other Nordic countries, the backbone of the system is becoming a strict defined contribution pension.

State old-age pensions remain generous but will increasingly become means-tested. Taken in isolation, it gradually becomes a residual system. In the absence of further changes, the system will continue to provide high minima — and large tax incomes for the state to finance the costs of ageing. As the burden of financing has been shifted from the state to the social partners, public budgets will be less pressured in the long run.

As compared to the new Swedish system, the Danish system seems equally sustainable, but it is likely to produce more egalitarian outcomes as it mixes actuarial equity with equality more than the Swedish system with a guaranteed but low minimum pension. To summarize, the Danish pension system has undergone a major transformation — without legislation — towards mixed responsibilities. The system satisfies all the economic concerns of World Bank recommendations Ploug, ; Green-Pedersen, , but it is much more egalitarian. As labour market pensions are formally private but almost functionally equivalent to state pensions, they involve an invisible increase in the proportion of GDP devoted to collective social purposes.

But it is an institutionally vulnerable and unconsolidated system with an uncertain future. Because of gender segregation within the labour market, gender inequalities are extended into labour market pensions Andersen, c; see also Frericks et al. Early retirement In , the Social Democratic—Liberal government introduced a voluntary early retirement scheme enabling people to withdraw from the labour market at the age of 60 with an allowance equal to unemployment benefits, in order to provide more jobs for young people.

Eligibility was conditional on membership in a voluntary unemployment insurance fund. Although the 46 Welfare State Transformations qualifying contribution period was successively elevated to 20 years, an initial reduction of the benefit after two years was abolished at the same time. Until a large majority received the maximum unemployment benefit. Because the scheme became more and more expensive, it was reformed in The contribution requirement was raised to 25 years, and a separate early retirement contribution was introduced.

People were given incentives to continue working until the age of In parallel the pension age was lowered from 67 to 65 years, in order to save money as the old-age pension benefit is lower than the early retirement allowance. The proportion of women among those who receive the early retirement allowance has increased from 38 per cent in to 55 per cent in The entire scheme has been criticized by employers and economists, not least in the context of discussions about ageing. Eventually a broad compromise was reached in the welfare reform of June The most important element was a change of the age brackets in the retirement system.

The implementation is not to begin until —22 at which time the age limit of early retirement allowance is gradually raised from 60 to 62 years. Correspondingly, the pension age will be increased from 65 to 67 years from — However, these age brackets are subject to full indexation by life expectancy at the age of In addition, the contribution record was raised to 30 years and required to begin from the age of Owing to the higher age brackets, the early retirement allowance will become unattainable for some of the core groups of industrial workers and female service workers for whom the scheme was originally designed.

At the same time, access to disability pensions has become more restrictive since In a nutshell, the changes in the pensions and early retirement system constitute large institutional transformations that will in most respects produce the same outcomes as previously. Adaptation to increasing life expectancy is secured partly by fully-funded pensions, partly through higher age brackets. But as far as the early retirement allowance is concerned, one can speak of a genuine decline of social citizenship for the lowest skilled workers who until now, at least have not fully benefited from general improvements of health and life expectancy.

Welfare services Welfare services are often given too little attention in welfare research. In , billion DkK was spent on transfers to households; but public consumption expenditure totalled billion DkK of which nearly three-quarters went to social, educational and health care-services Statistics Denmark, Even though services in Denmark are more generous than in most other countries — unlike transfers to households — pressures for expansion are strongest on services which are backed by public employees and by middle-class users with rising expectations.

From cost containment to renewed expansion When the bourgeois government came to power in , it had one overriding concern: cost containment. These policies were highly unpopular, and subsequent governments aimed at small annual increases. However, pressures for increased spending increased even more, and as mentioned, the cumulative growth from to was as high as 35 per cent.

Thus, welfare state change in Denmark has become a question about growth priorities, not about retrenchment. Paradigmatic change Institutionally, the most important changes in services have been shaped by the New public management paradigm Hood, ; Greve and Ejersbo, ; Ejersbo and Greve, ; Greve ; Christiansen, which has been disseminated across modern welfare states, e. It has also been underlying a municipal reform —06 and a proposed quality reform This means that principles of management from the private sector can be transferred to the public sector, and that services wherever possible should be exposed to competition and consumer choice by generating quasi-markets.

Competition requires, in turn, a separation of buyers and 48 Welfare State Transformations providers of welfare within the public sector — the latter should in principle function as private companies and be paid according to performance, as agreed upon in a contract. Consumer choice requires information about quality. Obtaining efficiency becomes easier if wages are more individualized and less compressed. In short: The new paradigm creates new challenges which require institutional adaptation. In the s modernization efforts were mainly focused on cost containment and better management decentralization and stronger management, contracting, output controls and less on marketization competition, user fees and outsourcing.

The latter was not very successful Christensen, , nor was the idea to increase user charges. Nevertheless, new public management ideas have continued to shape policies. The Social Democratic leadership accepted and developed many of the ideas. But they did not actively promote outsourcing or freedom of choice between private and public providers; owing to internal resistance, they largely tried to keep private providers out of core welfare tasks.

Interestingly, the modernization programme of the s also came to include reforms to increase user influence through voice, by establishing elected user boards wherever possible in the public sector, first and foremost in schools. To the bourgeois government, this was welcomed as an instrument to limit the power of public employees. Changing the welfare mix in services As mentioned, there were few institutional changes towards mixing state and market in the s. Another global idea — that of mixing state and civil society — also had limited impact.

A basic characteristic of the Nordic welfare states is the degree of de-familialization Esping-Andersen, and state responsibility for care functions. This development seems irreversible. Unlike in Continental European welfare states Naegele et al. There have been a few reforms enabling people to take leave from jobs to care for seriously ill family members, and parental leave has been extended to one year. It has also become possible to receive cash for care for own children and for providing home help for one year. But take up is low.

The role of voluntary associations is recognized by everybody, but nobody envisages that they could take over functions from the state; their role can be described as supplementary and highly specialized Bundesen and Henriksen, ; Henriksen and Bundesen, ; see also Dahlberg, As to social responsibility of firms, this has increasingly been taken seriously as something more than just a euphemism for subsidized employment Martin, Another trend is the explosion in firm-based health-care insurances which the government has made a tax-free fringe benefit.

So far, these insurances are cheap due to low take up. There are as many far-reaching potentials in new mixes of state and markets as there are ways to combine regulation, financing and provision of welfare Barr, Since the mids, there has been little discussion about full privatization, let alone mandatory private insurance.

New or higher user fees were also given up as these were highly unpopular among voters Andersen, b. Ironically, it became the task of a bourgeois government to introduce free universal home help in and to reduce user fees for childcare after Unlike user fees, this has no immediate distributional impact.

Voter resistance is substantially lower, but resistance among public employees remains strong Andersen, , b. Social Democrats have accepted outsourcing as a principle, but have been somewhat more reluctant to implement it than their Swedish sister party Green-Pedersen, b. Bourgeois governments, on the other hand, have worked hard to increase outsourcing — in the economic agreement with the municipalities it was agreed to increase outsourcing from 50 Welfare State Transformations 20 to 25 per cent before Because of the critical discussions about outsourcing in the s, it has become important for governments to underline that outsourcing is not aimed at saving money, only at improving quality.

Furthermore, outsourced services are often exposed to so much critical media coverage and government control that firms do not consider this market attractive. After negative experiences, firms have almost completely exited the market for childcare. Vouchers allow users to choose between private and public providers as in elderly care , or between public providers as in health care — unless waiting lists are long. But they are very popular among voters who see it as an extension of social rights Andersen, Health care Until the mids, Denmark was successful in containing costs for health care.

In the s health-care expenditures were growing very fast, even in relative terms, from 6. However, in spite of low economic growth and an ageing population, bourgeois governments managed to lower expenditures from 8. This reflects that cost containment was really harsh.

Seemingly it also had negative effects on quality and even on life expectancy Andersen and Christiansen, Although expenditures have expanded at a faster rate than GDP in spite of rapid economic growth in subsequent years, there has been virtually no overall growth in health-care expenditures as per cent of GDP over the past 35 years Andersen, d.

This is not an effect of privatization of financing. Except for comparatively large co-financing of medicine and dental care, health care has remained completely free of charge, whereas there are small fees in the other Nordic countries. This has increased outsourcing to private hospitals. Health care used to be financed by the counties, but from counties were replaced by five regions without providing them with the right of taxation; like waiting list guarantees, this is likely to increase expenditures.

The spread of private health insurance and the waiting list guarantee has led to an expansion of private hospitals. Initially, Danes were strongly opposed to the establishment of private hospitals, but since the late s, they have largely been accepted. In Norway user fees are of a more symbolic nature Szebehely, Compared with other countries, Denmark has an unusually large proportion of senior citizens aged 65 and over receiving elderly care — about 25 per cent.

Only Norway and Iceland come close to these figures whereas the Swedish figures are around 15 per cent. In short, Denmark is currently the herald of Scandinavian universalism in elderly care. From time to time, it has been debated whether user fees should be re-introduced, and about half the population supports such a proposal unpublished findings from a survey. Often people are granted only one hour of cleaning each second week, because municipalities assign priority to those in need of personal care. Besides, rest homes are being abolished in favour of centres where people typically have their own, fully equipped two-room apartments and are offered the care they need.

The apartments are rented on normal conditions favourable due to the special housing benefit scheme for pensioners, see above , and seniors have to pay for meals and other services, but care is provided free of charge. These priorities run counter to rational choice theories of retrenchment. Even though universalism is formally maintained, the significant cuts in practical assistance mean that in real practice, the differences between the Danish and the Swedish situation are smaller than they might seem.

However, the most important change is the marketization of home help services. In municipalities were forced to calculate a unit price and invite private producers to deliver services at the same price, which effectively offered the elderly free choice between public and private providers. This necessitated an organizational division so that service providing units became separated from public authority functions.

In principle the providing units are organized as private producers who sign a contract with the municipality. User satisfaction is marginally higher among those using private providers who are considered to be more responsive and flexible: even though contracts are based on a minute-by-minute specification of what the home helper should do, the most important parameter on which private providers can compete is by neglecting such specifications and deliver what customers want.

Finally, private providers can compete by offering additional service against payment — an opportunity which is much wanted among the municipalities. It remains to be seen whether free choice will have any behavioural and ideological impact as normative institutionalism would suggest , and whether private firms will become a new strong interest group in this policy area as historical institutionalism would have it. In the short run, however, the main effect is an empowerment of users, and this is the main reason for the popularity of such reforms.

Public attention and controls have simply made it unattractive for producers. Nevertheless, the government has tried to promote freedom of choice in other ways. There has always been free choice between institutions or public child carers within the municipality, but since , the government has sought to introduce free choice across municipalities even though this has not always been fully implemented, due to waiting lists.

Another change is the possibility of establishing private child care with public support. This has turned out as a flexible way to meet special needs, for instance regarding opening hours. However, rather than increased choice possibilities, the most important change is the obligation for municipalities to provide public child care for anyone in need.

Welfare state -- Understanding the welfare state: Crisis, critics, and Countercritics

Furthermore, user charges have been reduced from a maximum of one-third of the costs to a maximum of one-quarter, with 50 per cent rebate for the second child and additional siblings however, this followed a period of de facto user charge increases in the s. Even though instances of retrenchment are discernible they always generate loud protests when municipalities cut back on personnel or introduce payments per hour, the entire policy field has been one of expansion, not retrenchment.

When it comes to cash payments, child allowances were made universal from , justified as compensation for the losses of a tax reform that reduced deductions for interest payments which were largest for young families. Curiously, this is the only instance where a significant proportion of voters want to reintroduce means-testing. However, government and opposition have been united in rejecting this proposal, mainly because of fear of adverse effects on work incentives.

Not even the unusually generous student allowances that were introduced in the mids have been questioned. Moreover, new schemes for cheap transport and improved support for students with dependent children have been introduced. Like in the field of child care, it is difficult to find much retrenchment here, even though productivity gains are sometimes presupposed in budgets of the state-run parts of the education system. In the first place, all schools are directed by user boards with a majority of parents.

Secondly, there is free choice not only between public schools in the municipality recently extended to go across municipality borders, but with some deficiencies regarding implementation , but also between public and private schools. The fees to be paid by parents constitute on average about a per month OECD, There are also a few boarding schools with upper-class recruitment, but these are the exception.

Looking at outcomes, the positive side is a unique feeling of user influence among Danish parents — even in comparison with the other Nordic countries that have moved in the same direction Andersen and Rossteutscher, However, on the negative side there have been tendencies towards segregation, mainly in neighbourhoods with high proportions of immigrants. Summing up In public services there has been little retrenchment since Moreover, with a cumulative growth of about one-third in a period with virtually no demographic pressures, the label of retrenchment is misleading.

There is no questioning of universalism or state responsibility, and it is a field of credit claiming rather than blame avoidance. The major institutional change — especially since — is the effort to increase freedom of choice everywhere in the public sector, in accordance with the modernization programme of the Liberal—Conservative government. The latter would be far too demanding for consumers. Looking at outcomes, there is little doubt that we face an empowerment of the individual citizen. There have been a lot of reforms, quite a few of them even transformative, some abrupt, others incremental.

With a few exceptions, reforms have been adopted in relatively broad compromises or subsequently accepted by the opposition. Whereas retrenchment and cost containment was a common denominator of the reforms in the s, the reforms since then have been more of an institutional character, and they have seldom been driven by shortterm cost containment concerns.

Rather, they have been aimed at bringing more people to work, at securing long-term sustainability, or at improving efficiency or responsiveness. As far as directions are concerned, we find paradigmatic and discursive changes in a somewhat more liberal direction especially supply-side economics and new public management.

But by and large governments have refrained from neoliberal solutions. Institutional changes have been large, even transformative in some fields, notably pensions and labour market policy. Another feature is the continued prioritization of social investments in the young. There have been substantial modifications in the division of labour between the state and the social partners, and between the state and the market in provision of welfare. A related overriding change is the efforts to bring the welfare state to act more in conformity with the market.

However, there has been little questioning of the responsibility of the state for final outcomes. Thus, it is difficult to speak of a deterioration of citizenship, in spite of a few examples pointing in that direction. It is easier to discover instances of empowerment. True, there have been deteriorations for unemployed workers and in particular for immigrants living on social assistance as well as increased conditionality rules, stretching almost to workfare in some instances, but these changes should be seen in the context of the improved employment situation which is also an important driver of the tightening although some economists might claim the reverse causal relationship.

There are clear indications of increasing inequality and poverty — the ultimate measures of outcomes — in the case of poverty directly related to policy change, i. Although increasing poverty is a serious self-inflicted challenge, the most critical questions should be addressed to the future: what will happen to the administration of social protection if and when the decline in unemployment is reversed? What will happen to those 60—65 years old in who are too worn out to work but not eligible for disability pension? What are the chances that the tax system will become substantially less redistributive?

And will the state be able to maintain a relatively high level of equality if wage dispersion continues to increase? All of these questions are uncertain. But as to the last couple of decades, one feels tempted to conclude that there have been large institutional transformations of the welfare state — indeed systemic change — which however have the net effect of maintaining or even ensuring the status quo with regard to outcomes.

Southern European SE countries experienced an expansionary phase of social welfare over much of the s, but soon faced serious fiscal constraints that became even more pressing when these countries embarked on the project to join the European Monetary Union. This considerably stalled the welfare state expansion trends of the s and called for comprehensive social reforms.

In this endeavour a common language for institutional change and policy reform developed, embracing guidelines, strategic options, benchmarking and other performance criteria, in the various fields of co-ordinated European strategies e. Nevertheless, different starting points, socio-cultural patterns, institutional structures and reform capacities account for a variety of responses. In Spain, Italy and, to a lesser extent, Portugal negotiated agreements have been important vehicles of structural reform. Furthermore, in Italy and Spain, enhancement of multilevel governance through decentralization and a wider distribution of power among institutions of various jurisdictions, national, regional and local, has significantly influenced policy innovation.

A tradition of statist-paternalistic forms of social organization,2 closely linked with highly politicized and conflictual industrial relations in this country are starkly conducive to policy stalemates and reform impasses. Our aim is to review trends in financing, organization and governance of welfare systems. We primarily focus on Greece and Spain, but where appropriate also include comparative perspectives on Italy and Portugal.

The first part of the chapter offers an overview of major reform challenges and interventions in the last few years; in the second and third parts we examine funding trends as well as modes of regulation and delivery in respect to four major social policy areas social security, employment policy, health and social care. We are particularly interested in how far SE countries have responded to increasing pressures for new regulatory and financing structures in social welfare, which are prevalent across the EU.

Reform trends and milestones In all four countries an expansion of social protection in expenditure and institutional terms occurred during the s. In Spain, Portugal and Greece significant changes in the balance of social and political powers, following the restoration of political democracy in the mid- to late s, largely contributed to this.

Welfare State Transformations : Comparative Perspectives

Social protection in SE combines a corporatist-conservative configuration of income maintenance with social democratic principles in health care and education systems. Initially, social insurance was plagued by a high degree of fragmentation and polarization particularly in Italy and Greece. Over the last two decades, however, successive reforms in all four countries varying in scope and effectiveness attempted to tackle fragmentation and particularism and improve administrative efficiency in social security.

Correcting serious imbalances in the face of an imminent financial crisis due to rapid demographic ageing has been an imperative goal of reform efforts for a long time. Equally important has been the strategic issue of rationalizing funding and improving accounting transparency, for instance, through a clear distinction between contributory benefits and redistributive tax-funded measures embracing a range of social assistance cash benefits and services mostly health care and education , in parallel with promoting equity and efficiency.

Social care, on the other hand, is a less developed policy area. Some efforts to expand and improve service provision e. As to labour market and employment policy there has been a clear trend towards liberalization and flexibilization measures, while a concern with flexicurity is varyingly incorporated in discourse and practice. New Democracy, which governed the country for a short spell in the early s, used the fiscal crisis and the Maastricht requirements to leverage changes along neo-liberal lines.

The EMU requirements prompted consideration of privatization particularly of public utilities as a primary financial tool for the public sector; a policy persistently followed to the present time. In other fields e. The deepening crisis of social security, reflected in the mounting deficit in the largest social insurance organization for private sector employees IKA , the rapidly decreasing ratio of employed workers to pensioners, the large public debt and the fast increasing budget deficit made a reform of pensions imminent.

Legislation passed in the early s was targeted to these fiscal problems, yet drastic changes for overcoming social insurance fragmentation were postponed. Legal provisions increased the pensionable age for civil servants and lengthened the minimum requirements of years worked for retirement under the general scheme of IKA, raised contributions, discontinued the indexing of pensions to wages and introduced cuts in benefits for new entrants after into the general scheme.

Most importantly, inequalities deepened and the number of pensioners living in poverty dramatically increased Petmesidou, a, pp. As to health care, less than a decade ago a major reform by the PASOK party founded a National Health System free at the point of delivery and aiming to improve equity and efficiency. Yet many provisions of the NHS, such as the prospect of unification of major health insurance funds,4 the setting up of a primary health system, the decentralization of authority and crucial aspects concerning organizational efficiency were hardly implemented.

A serious lack of support by major social actors, conflicting interests within the medical community and discretionary privileges and complex ties between the public and private sector account for this. The Act of , passed by the conservative government, made significant amendments to the legislation in favour of private provision: it gave the right to hospital doctors to combine part-time employment in the public Ana M.

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  6. An attempt to launch a social dialogue for strategic social reform in spring did not bear results. Thus significant changes, in the direction of increasing labour market liberalization and employment flexibility, were introduced more or less unilaterally by the government. In parallel some provisions were made for regulating atypical forms of work in a flexicurity vein and offering incentives for the regularization of informal employment. The reorganization of the public manpower agency OAED was announced and new legislation permitted the establishment of private placement offices.

    Welfare State Transformations: Comparative Perspectives

    Wage restraint and liberalization measures were balanced with moderate benefit increases and provisions, particularly as the government confronted rapidly increasing unemployment during the s, persistently high poverty rates and a serious deterioration of income levels for a large number of elderly people. In a social assistance benefit EKAS and co-payment reductions for low-income pensioners were introduced in parallel with health insurance subsidies for the young and the aged longterm unemployed. Two subsequent laws led to the establishment of a health inspectorate and the administrative deconcentration of the NHS through the creation of 16 regional health administrations responsible for the supervision of hospital management and health service delivery; in parallel, hospital management and administration were to be reorganized.

    Other major reform issues, such as the development of an integrated system of primary health care in urban areas and the amalgamation of health insurance funds did not succeed in being incorporated into the legislative programme. This has also been one of the reasons for the rapid increase in private health expenditure over the last decade.

    Tackling the macroeconomic problems of social insurance has persistently been a pressing priority. Deteriorating demographic trends are expected to increase expenditure on pensions to a maximum level of As a consequence drastic measures of benefit reduction and an increase of retirement age were proposed in spring The plan met with strong trade union opposition and the government was forced to abandon it. One year later a watered-down version turned into law.

    Its main provisions were the unification of public utilities and bank employee funds into IKA to be enforced in a five-year time period , the introduction of a clearly stated state subsidy to IKA set at one per cent of GDP annually, and some adjustments in the minimum pension conditions stipulated by the insurance legislation.

    Wages for part-time workers increased by 7. The law relaxed dismissals conditions for small firms and redefined flexible working time arrangements along with provisions for cutting down overtime. In parallel OAED was extensively restructured. Vocational training and labour market monitoring, however, were transferred to two newly established companies under private law. In the realm of social insurance, the government limited its activity to implementing previous legislation and has been reluctant to introduce a new round of reform.

    In order to buy time and find a more propitious moment for reform, the government has recently commissioned a review of social insurance to ILO experts. The emphasis is placed on administrative components of delivery. An analysis of disaggregated social service expenditure demonstrates a static condition of a highly deficient, ex-post, reactive mode of public welfare service provision Petmesidou, b. A growing need for welfare service provision, in parallel with available EU funding, contributed to the creation of new programmes e.

    Services focus on the most deprived and vulnerable groups, and scarcely face the challenge of opening up the debate for universal, holistic and user-focused services. Equally absent is a regulatory framework for integrating public, private and voluntary provision. By far the most important reform in respect to the public—private mix concerns the introduction of a private finance initiative PFI by Law of , according to which provisions are made for the private funding of construction and maintenance of social infrastructure schools, hospitals and welfare centres.

    In contrast to the other SE countries no major reform in the field of social assistance took place in Greece in the last decade. The few non-contributory some of them means-tested , categorical benefits are characterized by great gaps in coverage and high fragmentation, while a minimum income scheme is lacking. The social security system is the least effective in Greece and the country exhibited the highest poverty rate together with Portugal from the mids to the early s. In a nutshell, Greece had to meet specific wage-restraint and deficit-reduction targets in a short time period.

    Piecemeal changes have been introduced mostly in line with the need for Greece to approximate its legal and policy framework to a range of hard and soft EU requirements. Adjustments have, however, not added up to wholesale transformations that could substantially change the rules of the game as was the case in Italy during the s or in Spain and tackle pronounced disequilibria in social welfare with roots in a tradition of paternalist and particularist allocative practices. Needless to say such conditions favour persistent and even growing formal and informal privatization as is strongly evidenced in the field of health and social care.

    Spain: a smooth, though not costless path of reform a The s: seeking enhanced efficiency What is peculiar to the Spanish case are the early rationalizing reform of the pension system in comparison to the other SE countries and significant moves towards narrowing protection gaps in the realms of family and care policies, non-contributory pensions for the elderly and the disabled, and social assistance minimum income schemes were introduced between and at the regional level.

    Finally, activation measures began to be introduced in the mids. The Maastricht Treaty initiated a significant change in public discourse, even though the Socialist party remained in office until