Explaining recent changes in WS policy
Lecture 9
Health Politics
Ana Rico
[email protected]
2005
The new politics of the WS
STUDENT PRESENTATIONS
Paper
Interviews
Mali
Jorunn
C5: 2 November
Patient copaymnts,
NHSs
M+J 1 Nov
OK paper
Linda
Kjetil
C7: Allan&S. 9 Nov
ABF & budget
Hoffman. 19 O/ 9 Nov?
constraint
L 7/8 Nov, K
OK paper
Unni
Anjam
C6: Briggs. 2 Nov
C8: Oliver. 9 Nov
Norway NHS:
policy enterpr.
U 31 OCT, A
OK Paper
Maria
Gunhild
Marthe
Janicke
C2: 5 Oct
Patient choice,
SWE/NOR?
M 3 Oct.
OK paper
Lidzija
Kim
Con
Ela
C7: Korpi, 9 Nov
Hunold, 19 O
C8: Hacker. 9 Nov ???
C8: Svallfors, 9 Nov.
C2: 5 Oct
C3: 19 Oct
Visibility & blame
avoidance in
biotechnology
OK paper:
Lidzija
2005
GROUPS Presentation
OUTLINE OF THE SESSION (1)
I.
Research questions
* (1) Which is the impact of WS expansion (T0) upon politics (T1)? 
* (3) WS resilence (=path dep.) or retrenchment/restructuring (=policy
change)?
II. Metatheory/Research design (P p143-7/155-6/179; C&P p 98)
* Are the causes of WS expansion and retrenchment different?
* To what extent can we use the same conceptual models?
III. Concepts –
* Policy, policy feedback = legacies, welfare expansion, retrenchment,
resilence and re-structuring
IV. Dependent variable & V. Findings (P, p156-73; C&P p69-95 )
* Evolution of WS policies (entitlements, expenditure) 1980-1995 (+ C & P
per pop. in need, and by policy sectors and instruments)
2005
* (2) Which is the impact of new politics on WS retrenchment (T2)?
OUTLINE OF THE SESSION (2)
V. Independent variables (P, p.145-155, C & P p. 68, 71, 96-8)
* The political process (actors’ resources & coalitions):
Clayton & Pontuss.
VI. Discussion (P. 173-179, C& P, pp. 67-71, 77-8, 84-6, 95-8)
* Debate Pierson/Clayton & Pontusson
VII. Policy implications
* Retrenchment varies across different countries and policy
sectors, as it advances by the lines of less political resistance
and visibility
2005
* Policy feedback as an institutional variable (or inst-led process):
Pierson
TYPES OF PUBLIC POLICY
INSTITUTIONS
-
Allocate of powers and rights
-
Establish patterns of behaviour (duties)
-
Establish rules of the political game
-
Establish regulatory organizations
* Constitution, Acts, Reglaments, Agencies  RHE
Source: Lowi (1972), The Four Systems of Policy, Politics
& Choice, Public Administration Review, July/August
2005
1. Constitutional & regulatory policy:
TYPES OF PUBLIC POLICY
RESOURCES
-
Production of goods and services
-
Public ownership and employers
* % State provision of HC, education
3. (Re-) Distributive policies:
-
Collection, allocation and redistribution of financial
resources
* % Public HC financing, taxes,, pensions, salaries,
copayments, prices
2005
2. Production policies (indirect redistributive effects):
POLICY FEEDBACKS
2005
Social
Context
Sociopol
. actors
Political
actors
Process,
interact.
Policy (T1)
Institutions (& Resources)
Causal effects at T0 
Causal effects at T1 
Policy (T0)
Policy as VD (T0)
& VI (T1)
POLICY FEEDBACK EFFECTS
 Examples:
 - Then old cleavages (class) blur, and new cleavages emerge
(export industries vs. national market industries) 
 - This makes new parties (conservative/liberal) and IGs
(export bussiness; public employees) emerge; + public
opinion support for WS increases 
 - The state becomes more capable (taxes, ownership,
knowledge)  more/less autonomous from transnational
capital & WS supporters, depending on actor configurations
 - The mature WS created different institutional configurations
(NHS/SHI), that can only be reformed incrementally
2005
 - A mature WS decreases poverty, increases the legitimacy of
state intervention, sustains qualified employment but may
hinder exports (social context)
CHANGES IN WELFARE POLICY
 WS expansion
 WS retrenchment
Decrease in coverage, benefits and expenditure
 WS resilience
Stable in coverage, benefits and expenditure. Resistant to change
 WS re-structuring
Change in distribution of benefits & expenditure across social
groups
2005
Expansion of coverage, benefits and expenditure
THE DV: WS POLICY CHANGE
A. Actor-centred institutionalism. PIERSON: RESILIENCE
Some incremental retrenchment in less popular/less visible
policy sectors (housing, unemployment benefits, sick pay)

A global picture of resilience of the core WS sectors (pensions,
health) up to the early 1990s
- “Retrenchment has been pursued cautiously; whenever possible,
governments have sought all party consensus for significant reforms;
and have chosen to trim existing policies rather than
pursue...privatization”

Need to wait for lagged consequences of reforms + more details
about policy subsectors and instruments before final judgement
can be made
2005

THE DV: WS POLICY CHANGE
B. Power-centred theory. CLAYTON & P.: RETRENCHM. & RESTRUCT
Clear evidence of WS retrenchment & re-structuring...but “How to
distinguish radical changes form incremental adjustment? And should
not we allow for some outcomes that are neither “incremental
adjustments” nor complete policy overhauls?”.

1) Entitlements & rights. Constitutional and regulatory
policies

“The population receiving some form of means-tested social
assistance increased in 15 out of 18 OECD countries” 
residualization

Decreased benefits per claimant (eg unemploym. 100% to 75%)

Shift from universal to employment-based policies, and from services
to transfers  increased conservative (vs. egalitarian) effects
2005

THE DV: WS POLICY CHANGE
2) Financing and resource allocation (Distributive policies)

When the automatic effects of the economic crisis upon WS
expenditure (demand-driven, via expanded claimants/needs) are
controlled for, there is a clear retrenchment in public WS expenditure
during the 1990s in most advanced nations

There is some WS re-structuring, which favours old age pensions and
social care at the expense of education, health, housing and
unemployment + “Increasing share of social expenditure allocated to
non-poor people in UK & US”

In direct public provision of services (Productive policies)
- More retrenchment in services than transfers; and specially severe
cuts in public employment
- “To the extent that it involves non-profit production and allocation of
output according to political criteria, it is this dimension of the WS that
most directly contradicts the logic of capitalism”
2005

THE IV: FROM OLD TO NEW POLITICS?
THE OLD POLITICS: WS expansion (Pierson, pp. 147-156)
A. Socioeconomic modernitation/globalization. CONTEXT

B. Left parties & unions, elect. competition, voting, social protest. POLITICS
(actors/action)

C. Political institutions, state capacity, and policy legacies. INSTITUTIONS.
(“Institutions” now including also STATE ACTORS & PAST POLICY!)
THE NEW POLITICS: WS retrenchment or resilience?

A. The expanded welfare state as a key policy legacy  the status-quo

B. Decline of parties and emergence of new pro-WS voters and IGs

C. Changed effects of institutions (power concentration favours WS expansion;
dispersion favours WS retrenchment) 

C. Little retrenchment (cuts) in most WS in spite of reform attempts
NOTE: Past policy (T0) changes not only institutions (rules) but also (T1) actors
(no.,resources,preferences), context (eg equity) & action (eg consensual)
2005

FROM OLD TO NEW POLITICS?
A. Actor-centered institutionalism Pierson 1996 (1999)
B. Power-centred action theories. Clayton & Pontusson 98.
“In our conception of politics, societal interests play a more
important role than they do in Pierson’s...frame. The antiservice bias
of the on-going restructuring of the WS can be seen at least in
part... as a response to political pressure from a cross-class
coalition of employers and workers in the export and multinational
sectors [+ neoclassic economists + neoliberal politicians &
voters, Hall 1993]...”
2005
“Institutions establish the rules of the game for political struggles...
Institutions also affect government capacities... A second central
institutional argument concerns policy legacies or feedback - i.e. the
[social & political!] consequences of previously introduced welfare
state programmes”
FROM OLD TO NEW POLITICS?
Resilence
(same models)
Or
NEW POLITICS
(Diff. Models)?
Retrenchment/re-structuring?
-- Partisanship
ARMIGUEON et al 2001
- Coalition of middle/low
class by type of WS
instit. (NHI/SHI/MKT)
- Consociational
-PIERSON 1996
CLAYTON & P 1998
Unpopular policies 
- Control for need!
-Blame-avoidance 
power dispersion &
invisibility
- Cuts in services less visible and
costly than in cash transfers
democracies
- Left parties
- Openess
economy
Unemploy.
-
- Coalition of investors, employers
and workers in the export sector
-- Coalition of public
sector unions & patients ALLAN & SCRUGGS 2004
against dispersed tax- Right-wing parties
payers
K Armingeon, M Beyeler, H Binnema 2001. The Changing Politics of the Welfare State - A
Comparative Analysis of Social Security Expenditures in 22 OECD countries, 1960-1998
2005
¿OLD
POLITICS
or
THE NEW POLITICS (1): PIERSON

Impact of WS expansion (=impact of the mature WS):
Interactions with new context:
Impact on new politics: “the WS now represents the status-quo”
- Decline of old stake-challengers (left parties and unions)
- Rise of new stake-holders (beneficiaries and providers of WS)
- Expanded public opinion support for WS expansion

The new politics of WS retrenchment:
- Unpopular policies  high political costs  require dispersed
power/broader coalitions and less visible policy instruments
- Concentrated institutional power no longer favours policy change;
as dispersed power obscures accountabilities
2005
The mature WS (high social wage) can decrease foreign investment
and exports under globalized markets
THE NEW POLITICS (2): CLAYTON & P.
Global WS change

The impact of WS expansion on the new politics is reverted as the
economic crisis, and WS retrenchment (which have opposite efffects)
proceed onward  apparent lack of change

WS change and the social context

Interaction of new social contet with mature WS:
- Conjunctural/cyclical: the impact of the economic crisis rapidly expands
the size of the population in need of WS serives and transfers 
unintended  in expenditure

The social impact of WS retrenchment
- From the early 1990s onwards, this effect is only partly compensated by
 WS effort (which grows less than GDP), due to  WS retrenchment
- As a result current societies are increasingly unequal (impact of WS
change on social structure)
2005

THE NEW POLITICS (2): CLAYTON & P.
 WS change & the new politics (2)
 Decline of old MKT stake-challengers (left parties and unions) as
direct consequence of retrenchment policies
 Weakened new WS stake-holders (beneficiaries and providers of
WS policies)
 Strong new WS stake-challengers: cross-class coalition of exportoriented employers and workers (and tax-payers)  (NOTE:
Capitalism stake-holders)
 Shifting public opinion support for WS expansion (countercyclical?)
2005
Retrenchment is the result of the triumph of Capitalism stake-holders
over WS stake-holders; and it further reinforces this balance of forces
2005
Source: Bouget, 2003 (OECD).
POLICY IMPLICATIONS
A. Actor-centred institutionalism. PIERSON 1996 (3)
“Overtime, all institutions undergone change. This is specially so for very large
ones, which cannot be isolated from broad social developments. The welfare
state is no exception. But there is little sign that the last two decades have been a
transformative period for systems of social provision”

“The contemporary politics of the WS is the politics of blame avoidance.
Governments confronting the electoral imperatives of modern democracies will
undertake retrenchment only when they discover ways of minimizing the political
costs involved”
B. Power-centred theory. CLAYTON & PONTUSSON (3)

The 1990s WS retrenchment policies have not only decreased benefits and
expenditure per population in need, but also have induced “long-term changes in
the political environment that make the WS vulnerable to further attacks”
* Weakened unions, providers and left parties and voters; strengthened
anti-WS coalitions; increased inequalities/divisions among WS beneficiaries
2005
