Why and How Do Politicians Do Risky Reforms?
On the Basic Cause and Blame Avoidance Mechanisms
of Welfare State Reform
Paper Prepared for the Workshop “Blame Avoidance and Blame Management:
Institutional and Policy Implications” of the ECPR Joint Sessions, Granada,
Spain, April 14–19, 2005
Barbara Vis and Kees van Kersbergen
Department of Political Science
Vrije Universiteit Amsterdam
De Boelelaan 1081
NL-1081HV Amsterdam
The Netherlands
Tel + 31 20 598 6821
Email: [email protected]
Abstract
The dynamics of welfare state reform are theoretically not well understood. In this paper we ask why and how politicians do risky reforms? Drawing on prospect theory we
identify the basic cause of reform: policy-makers only take risks as the outcomes of the
status quo are no longer perceived as gains but as losses. Prospect theory furthermore
predicts that the condition under which welfare state reform takes place, i.e. when the
status quo equals a loss, is identical across countries. To find the underlying causal
mechanisms of reform, we turn to the theory of blame avoidance. We assess empirically the theoretical consequences of both theories and conclude, first, that politicians
do not do risky reforms unless they consider that upholding the status quo is no longer
a political (electoral) option and, second, that of the many strategies available, some
are especially likely to be chosen by politicians.
1
Introduction
One of the major puzzles of contemporary welfare state research is why and how drastic or radical reforms are taking place in spite of the institutional mechanisms and political resistance that work against change. Empirically, the field is very rich with detailed
single case studies, comparative projects and large-n studies that have produced a
host of hypotheses on the why’s and how’s of welfare state reform. On a theoretical
level, however, there seems to be a problem with understanding the dynamics of reform, particularly with identifying the basic cause and the necessary causal (micro-)
mechanisms that explain the link between cause and effect (reform).
The central question of this paper is: why and how do politicians do risky reforms? Mainstream welfare state research informs us that it is plausible to assume that
welfare state reform is always politically risky, so that there must be a very strong or
convincing reason why politicians will embark upon risky reforms in the first place. We
propose that prospect theory, which specifically deals with choice under uncertain and
risky conditions, can give us a better grounding of the basic cause of reform. For a solution to the problem of causal mechanisms, we look for inspiration in the literature on
blame-management and blame avoidance that particularly focuses on how political
actors try to avoid the negative repercussions of their reform measures. We try to assess the empirical relevance of our theoretical findings against comparative data on
welfare states over time.
The paper is structured as follows. In section 2 we shortly discuss major studies
of contemporary welfare state research and identify the basic theoretical problems that
contribute to the puzzle of reform. In section 3 we turn to prospect theory to find the
necessary condition under which risky welfare state reforms occur. Section 4 is devoted to the theory of blame avoidance and gives us the strategies of reform. Section 5
studies the empirical bearing of the theoretical findings. Section 6 is the conclusion.
2
Puzzles in welfare state development
Theories from various intellectual backgrounds in the late 1980s and (early) 1990s
forcefully argued and predicted the definitive crisis and final breakdown of the welfare
state. They pointed to formidable challenges such as ageing populations, sluggish
economic growth, long-term unemployment, changing family structures, the transformation of life cycle patterns, the postindustrialization of labour markets, the erosion of
1
systems of interest intermediation and collective bargaining, the rise of new risks and
needs, and international pressures (globalisation and European integration). Such challenges and pressures necessarily would bring about major structural revisions as they
threatened the welfare state’s viability and subsistence.
However, empirical reality contradicted these theories since the welfare state
continued to exist, albeit perhaps functioning at a lower level of social and economic
performance. As a result, the major explanatory puzzle in the mid-1990s became the
theoretically unexpected but empirically observed persistence of the major institutions
of the welfare state. Paul Pierson, one of the field’s leading researchers, aptly summarized the problem: ‘Underlining the severe pressures confronting mature welfare states
does not, however, imply that the expected result is a collapse or radical retrenchment
of national welfare states. Major policy reform is a political process, dependent on the
mobilization of political resources sufficient to overcome organized opponents and
other barriers to change’ (Pierson 2001: 411, our emphasis).
Theoretically, and in accordance with mainstream political science, institutionalist approaches provided part of the solution to this puzzle by identifying some of the
crucial mechanisms that explained welfare state persistence. Another part of the solution was found in the “politics of blame avoidance” (Weaver 1986). Taken together, a
theoretically plausible answer was formulated to the puzzle. Major policy reform was
not only very difficult because of the heavy weight of policy legacies, but also politically
highly risky as it adversely affected (parts of) the electorate and vested interests. Major
welfare state reform efforts time and again failed because of two major pro-status quo
forces: first, the broad (electoral) support for core social programmes and accordingly
the political unpopularity of cutbacks; and second, the rigidity of welfare state institutions that results from path dependent development and veto points that have the capacity to obstruct reform.
Paul Pierson (1996: 178) argued that ‘frontal assaults on the welfare state carry
tremendous electoral risks’ and that retrenchment as a political issue should not be
misunderstood as the mirror image of the growth of the welfare state. Welfare expansion usually generated a popular politics of credit claiming for extending social rights
and raising benefits to an increasing number of citizens (i.e. the old politics), while austerity policies tended to affront voters and networks of organized interests and therefore
triggered a politics of blame avoidance (i.e. the new politics of the welfare state).
In other words, the post-1945 welfare state had produced an entirely novel institutional and political context. Once welfare programmes were solidly established, they
2
created their own programme specific constituencies of clients and professional interests. As a consequence, ‘the emergence of powerful groups surrounding social programs may make the welfare state less dependent on the political parties, social
movements, and labor organizations that expanded social programs in the first place’
(Pierson 1996: 147). Specialized social programmes in the policy areas of social housing, health care, education, public assistance, social security, and labour market management developed into institutionally separated and functionally differentiated policy
domains. Therefore, a general weakening of social democratic and Christian democratic parties and the trade union movement – the main historical supporters of welfare
state expansion – was unlikely to translate into a corresponding weakening of social
policy.
Supported by strong popular attachments to specific policies, professional policy networks were able to muster substantial veto powers against reform efforts. Moreover, given the political salience and popularity of social policy, it was not easy to turn a
political preference of “dismantling the welfare state” into an electorally attractive
proposition. Shifting the goals from expansion to retrenchment imposed ‘tangible
losses on concentrated groups of voters in return for diffuse and uncertain gains’ (Pierson 1996: 145). On average, ‘retrenchment advocates thus confront a clash between
their policy preferences and their electoral ambitions’ (idem: 146). Other researchers
(e.g. Huber and Stephens 2001) empirically corroborated the Pierson-thesis and concluded that for austerity and retrenchment (public employment in Scandinavia is the
exception) class and politics matter less and less, because an institutional rather than a
political logic governed the adaptation of welfare states.
However, by the late 1990s, a new puzzle was emerging: if institutional sclerosis and political deadlock were indeed so powerful in precluding change, why were
there nonetheless empirical instances of (sometimes substantial or even radical) welfare state restructuring? What explained the reforms that did occur in spite of the theoretically plausible predictions of log jam?
Most new analyses start from the institutionalist argument, and then try to add
specific mechanisms of conditions under which substantial reform is possible. So, researchers stress the role of coalition politics (Bonoli 2000), the potential and risks of
concentrated political power (e.g. in France, Great Britain and Switzerland; Bonoli
2001). They look at the particular institutional configurations that determine retrenchment (Swank 2001) or the domestic institutional “refraction” of international pressures
(Kitschelt et al. 1999).They highlight the effect of the party system, party competition
3
and party strategy (Levy 1999; Ross 2000; Green-Pedersen 2001; Kitschelt 2001) and
point to the role of framing, discourse, policy learning and ideational leadership in overcoming electoral and institutional resistance against major policy reform (Cox 2001;
Schmidt 2000; see Green-Pedersen and Haverland 2002; Van Kersbergen 2002).
The current state of affairs is such that many researchers are struggling to understand the dynamics of institutional resilience and reform. Indeed, many theoretical
propositions and empirical hypotheses are proposed (and even tested), but all seem to
face serious problems in elaborating the necessary causal (micro-) foundation of their
argument. Let us give two examples.
Scharpf (2000: 116ff) explains that the large-scale comparative project that he
directed with Schmidt did not succeed in finding plausible political and institutional explanations of national adjustment strategies. He points to the unsatisfactory explanatory power of existing theories and explain their own failure to provide a better alternative by arguing that the ‘irreducible contingency of the problem-institutions-actorspolitics-policy nexus’ (Scharpf 2000: 117) of national reform experiences is too complex
to allow for causal inferences. But part of the complexity and contingency that the
Scharpf–Schmidt project suffered from was theoretically self-imposed, namely by conceptualizing – in the best institutionalist tradition – the causal relationship between institutions (or institutional conditions) and policy and policy outcomes as inherently of an
contingent character. It seems to exclude the possibility of formulating a general theory
from which specific empirical hypotheses can be derived. As Scharpf (2000: 22) himself put it: ‘even though institutional differences may provide very powerful explanations
for the success or failure of national policy responses, these explanations can be formulated only with regard to specific types of challenges’. Scharpf’s theoretical exercise
is therefore phrased in the typical wording of “challenges”, “vulnerabilities” and “institutional capabilities”. It gives us the general picture of what kind of economic and social
challenges national welfare states are facing, how vulnerable they are to the whims of
the world market and how well adjusted the national institutional arrangements are. But
it gives us very little to hold on to when we want to explain, for instance, why countries
similar in institutional layout and facing comparable challenges, nevertheless perform
radically different in reforming their welfare arrangements (for an interesting attempt
see Kuipers 2004). A capability is a disposition, but for a causal argument one needs
information on the strategy with which political actors attempt to realise the potential
and avoid the likely backlash of policies that aim to reform the status quo.
4
A second example is taken from a co-authored work of one of us. Hemerijck
and Van Kersbergen (1999) attempted to identify some of the mechanisms of reform:
next to patching up institutions and transposing their use, they focused on policy learning. They argued that ideas and institutions are intimately related: institutions give us
ideas; ideas are embodied in institutions. Policy learning is therefore institutionally
nested. The institutional context of the welfare state is complex and consists of various
policy domains, namely macroeconomic policy, industrial relations, social security and
labour market policy, they may be loosely or tightly coupled. These domains vary in
policy content and are governed according to different institutional logics. The relative
ease and success of policy learning is contingent on the structure and character of the
linkages between the different policy domains. This means that in some institutional
contexts paradigmatic changes in ideas and policies happen slower and are less visible
than in other contexts.
They then proposed to view policy learning as informed by 1) policy failures, 2)
anomalies and 3) the extent to which new information and insights into the relationships of cause and effect in various policy domains generate political windows of opportunity for reform. But although they were aware that policy making is a matter of
both “puzzling” and “powering”, they treated reform to a large extent as an almost exclusively policy rather than also political issue and accordingly had very little to tell
about the conditions under which those responsible and accountable for reform could
be successful both in a policy sense and a political sense. In other words, theories of
policy learning failed to problematise the political feedback mechanisms that either preclude learning to occur in the first place or inhibit action on the basis of new failure induced insights.
So, on the one hand we have a body of literature that explains the difficulty, if
not impossibility, of welfare state reform by pointing to institutional resistance and electoral risks, and on the other hand we have various fragmented hypotheses from policymaking, organizational and political-economy theories that try to identify the mechanisms, conditions and strategies of welfare state reform. It seems to us that we need
stronger theory that can specify much better how – under conditions of a viscous institutional context and a limited room to manoeuvre – political actors succeed to overcome the resistance against change. And for this we turn to other sources of inspiration, particularly prospect theory and the literature that deals with blame-management
and blame avoidance, in order to understand better the mechanisms that affect the
political management of hazardous welfare state reforms.
5
3
Specifying the conditions of welfare state reform I: prospect theory
Expected utility theory – as commonly used in economics and in schools that employ
economic theories such as rational choice institutionalism – make predictions that do
not adequately describe how people actually make choices under conditions of risk and
uncertainty. More than 25 years ago, Kahneman and Tversky (1979) already offered an
alternative, prospect theory, which was meant to provide a better account of choice
under risk. As Levy (2003: 215) aptly summarized: ‘Prospect theory deviates from expected-utility theory by positing that the way people frame a problem around a reference point has a critical influence on their choices, and that people tend to overweight
losses with respect to comparable gains, engage in risk-averse behavior with respect
to gains and risk-acceptant behavior with respect to losses, and respond to probabilities in a non-linear manner’. In Political Science, prospect theory has been mainly applied in the field of International Relations (and occasionally in Comparative Politics)
(see Quattrone and Tversky 2000; special issue Political Psychology 2004, issues 2
and 3), but – precisely because of its stress on choice under conditions of risk and uncertainty – we expect prospect theory to be particularly relevant for improving our theoretical understanding of the choices that politicians make when trying to reform welfare
state programmes.
There are a number of reasons why – in the face of “risk” – decision-making
does not involve a rational deliberation over so-called end-states (as in expected utility
theory), but rather a choice between “gambles” (i.e. prospects). First, there is the “certainty effect”, which means that ‘people overweight outcomes that are considered certain, relative to outcomes which are merely probable’ (Kahneman and Tversky 1979:
265). If there is a chance of 50 per cent that one can win € 300 and certainty that one
wins € 75, expected utility theory predicts that people choose the first option (expected
utility of option 1 = 0.5 * € 300 + 0.5 * € 0 = 150, which is higher than the expected utility of option 2 = 1.0 * € 75 = € 75). However, experiments show that a theoretically unexpected but statistically significant high number of people choose the second option.
Second, there is the “reflection effect”, which suggests that the preference order
in the negative domain is the exact mirror (hence the term “reflection”) of the preference order in the positive domain. This implies that how choices are “framed” matters
for how preferences are ordered. Framing is ‘(…) the process by which a communication source constructs and defines a social or political issue for its audience’ (Nelson et
al. 1997: 221). For example, when people are faced with the fact that there is 10 per
6
cent unemployment, they probably are ready to accept tough policy measures to fight
unemployment. However, when this fact is reformulated in positive terms, namely that
employment is at 90 per cent, they probably are less inclined to accept harsh measures
to increase further the level of employment. In other words, framing the same fact differently reverses preferences.
Finally, there is the “isolation effect”, which tells us that ‘(…) to simplify a choice
between alternatives, people often disregard components that the alternatives share,
and focus on the components that distinguish them’ (Kahneman and Tversky 1979:
271). Hence, voters disregard those elements in the manifestos of political parties that
they have in common (e.g. retrenchment of health care) and focus on the distinguishing
aspects of the programme. This implies that voters do not consider political alternatives
as a whole (i.e. a party electoral manifesto), but focus on a comparison of political differences. A vote for a party manifesto, therefore, cannot be taken as a contribution to
the mandate of that party.
Given these psychological processes, prospect theory states that there are two
phases in the choice process: an editing phase and an evaluation phase. During the
editing phase, the decision is simplified by means of all kind of editing operations like
coding in gains and losses, established against some neutral reference point. In the
evaluation phase, a choice is made between the prospects.
These are just the basics of prospect theory: the theory is more complex (complexity that we do not need for our purposes) and surely more complex than expected
utility theory. The added value is, of course, that prospect theory better reflects how
choices are made. Prospect theory namely argues that policy-makers avoid risks as
long as the outcomes of the status quo are perceived as gains, i.e. as still acceptable
or tolerable. Paraphrasing Berejekian (1997: 793), the theory yields two predictions.
First, governments will opt for the certainty of the status quo, when they view the status
quo as a gain (their position of power) and are confronted with a choice between a) the
status quo (no reform) and b) some gamble (reform) with both a positive expected
value (e.g. electoral gain) and some smaller risk of loss (electoral punishment smaller
than the expected gain). Second, governments will opt for the gamble, when they view
the status quo as a loss and are confronted with a choice between a) the status quo
(no reform) and b) some gamble (reform) with both an expected value of further loss
(further electoral loss) and some smaller prospect for improvement (an electoral reward
smaller than the expected loss).
7
Hence, a corollary of this reasoning is that governments will only embark upon
drastic welfare state reforms with risky electoral repercussions (“gamble”) if the status
quo is considered a “loss”. Prospect theory therefore gives us the necessary condition
under which welfare state reform can occur, namely that governments view the status
quo as a “loss”. In contrast to mainstream welfare state theory that holds that welfare
state reform varies according to the different institutional logics of welfare state regimes
(liberal, social democratic, conservative), prospect theory predicts that reform takes
place under similar conditions (status quo equals a loss) and therefore applies to all
welfare states irrespective of their regime-type. Paraphrasing Berejekian (1997: 789)
governments in a gains frame pursue absolute gains and are unwilling to engage in
risky reform efforts, while governments in a losses frame pursue relative gains and are
more willing to accept the risks of reform. This theory, then, gives us an explanation for
the fact that governments embark upon risky reforms at all, that is for the empirical fact
for which institutional approaches – and especially rational choice institutionalism that
employs expected utility theory – have no account. Stated differently, prospect theory
gives us the basic cause of hazardous reforms.
However, the theory tells us little about a) the causal mechanisms (except inductivist psychological findings of laboratory experiments) that connect cause (the
losses frame) and effect (reform) and b) other possible conditions that enable or restrain action (e.g. institutions), c) problems of choice at the aggregate rather then the
individual level. We hope to find clues for solving these problems in what is rapidly becoming a theory of blame avoidance.
4
Specifying the conditions of welfare state reform II: the theory of blame
avoidance
Irrespective of whether or not policymakers find themselves in a losses frame, for their
decisions they can be influenced by different and mutually exclusive kinds of motivations: 1) credit claiming (assuming vote seeking), 2) “good policy” (assuming policy
seeking) and 3) blame avoidance (assuming vote seeking) (Weaver 1986: 372). Which
motivation or strategy is chosen, is affected by the structure of party competition.
Weaver (1986: 378) argues that ‘the number of parties or candidates competing for
votes (…) may influence whether a party stresses credit-claiming or blame avoiding in
its electoral appeals. In a two-party system (…), the best strategy is probably to take
ambiguous stands and duck divisive issues (i.e., to minimize blame) to avoid offending
8
marginal voters. In a multi-party system, on the other hand, some parties may be better
off by taking pointed, controversial positions (credit-claiming) in order to build a distinctive political base and avoid becoming lost in a crowded field’.
However, we think that in certain contexts, especially those in which established
social rights are object of reform, the motivation of blame avoidance seems most relevant to focus on. Policymakers are here most likely to search for blame avoidance
strategies because it promises to attain the goal that they have been forced to set (reform), whilst avoiding the well-known risk of blame that accompanies such hazardous
reform. As Weaver (1986: 372) argued: ‘(…) when push comes to shove, most officeholders seek above all not to maximize the credit they receive but to minimize blame’.
But can blame avoidance strategies in this sense be politically (rather than policy) effective? There are arguments that support a positive answer. The idea of “negativity effects” in political behaviour is important here. A negativity effect refers to ‘the
greater weight given to negative information relative to equally extreme and equally
likely positive information (…)’ (Lau 1985: 119). There appears to be a rising negativity
bias both among voters and politicians (Hood 2002: 20). In addition, Pierson (2001),
among others, has correctly argued that the benefits of reforms are widely dispersed
electorally, while the losses tend to be concentrated among voter groups. We take this
to imply that voters who are negatively affected by welfare state reforms remember
such reforms much better and longer than reforms that affect them positively. Or, as
Weaver (1988: 21) states, voters ‘(…) are more sensitive to what has been done to
them than what has been done for them’ (italics in original). So, how to do things to
voters and get away with it?
Many empirical studies in one way or another refer to strategies of blame
avoidance as a solution to policymaking under uncertain and risky conditions. Hood
(2002), focussing on the link between the “risk game” and the “blame game”, discusses
three strategies of blame management. First, there are presentational strategies or
“impression management”, that is ‘selecting arguments to minimize or avoid blame, for
example in choosing between excuses intended to mitigate blame and justifications
designed to turn blame into credit’ (Hood 2002: 16). Second, there are policy or substantive strategies, i.e. ‘the selection of policy positions to minimize or avoid blame, for
example choosing between policies that support risk creators as against those that
support risk victims’ (idem). Third, through agency strategies, that is ‘the selection of
institutional arrangements to minimize or avoid blame, for example in choosing between direct control and delegation’ (idem: 17). Hood’s point is that ‘(…) agency strate-
9
gies (…) if successful (…) eliminate the need for presentational or policy bias to
achieve blame avoidance (…)’ (2002: 17).
In our interpretation, however, these strategies are not so much mutually exclusive, but rather hierarchically nested. That is to say, policymakers are most likely to try,
first, to choose an institutional arrangement that minimises or avoids blame, second, if
this fails, to alter policy positions, and finally, to present and phrase policies in a manner which minimises or avoids blame. This means that we do need a more detailed
understanding of blame management or blame avoidance strategies, because empirically they may very well overlap.
The theory of blame avoidance, which can be traced back to Downs’ (1957)
theory of electoral competition, has had a clear focus on explaining why governments
have a strong incentive to refrain from pursuing policies that are unpopular among voters. It was, in fact, one of the theoretical underpinnings of the welfare state resilience
thesis. Interest group theory at the same time had been informing us that ‘in addition to
resisting to vetoing reforms, strong organized interests also reinforce the blame avoidance incentives of governments because trade unions and elderly lobbies are able to
mobilize large segments of voters in elections’ (Hering 2003: 4, referring to Weaver
1986: 394–5).
Indeed and interestingly, the resistance-against-change theorem was definitively one of the specific consequences of the politics of blame avoidance that Weaver
(1986: 394) pointed to: ‘Blame avoidance (…) helps to explain why policies are so difficult to change, even if they fail. If policymakers and their constituents perceived costs
and benefits symmetrically, they would be willing to change policies quite freely, at
least as long as the new policies promised at least as high a surplus of concentrated
benefits over costs as the status quo. But substantial vested interests often develop
around programmes. Because costs and benefits are perceived asymmetrically, policymakers fear that new policies will not win them as much support as dismantling the
old ones will lose’.
However, we think that of the strategies that Weaver identified (see table 1) to
explain why policy change is so difficult, most of them may very well be strategies that
can be employed to simplify or facilitate reform.
10
Table 1
Blame avoiding strategies
Strategy
Approach to avoiding blame
(1)
Agenda limitation
Prevent blame generating by keeping potentially costly choices from being
considered
(2)
Redefine the issue
Prevent blame generating by developing new policy options which diffuse or
obfuscate losses
(3)
Throw good money after
Bad
Prevent or delay blame generating by providing resources to prevent constituencies from suffering losses
(4)
Pass the buck
Deflect blame by forcing others to make politically costly choices
(5)
Find a scapegoat
Deflect blame by blaming others
(6)
Jump on the bandwagon
Deflect blame by supporting politically popular alternative
(7)
Diffuse blame by spreading it among as many policymakers as possible
Circle the wagons
(8)
Prevent blame generation by keeping credit claiming opportunities that con“Stop me before I kill again” flict with policy preferences from being considered
Source: Weaver (1986: 385), table 3.
Strategy 1, limit the agenda, basically tries to avoid that the very issue of a hazardous
reform is politicized and therefore is not an option if reform is considered necessary.
Strategy 2, redefine the issue, is primarily an attempt to spread the costs of reform and
can just as likely be used as a reform strategy. Strategy 3, throw good money after
bad, is basically a strategy that tries to soften the pain of reforms by offering a small
compensation and can also be a strategy to help reform. Strategy 4, pass the buck, is
delegation of the blame and includes also “automatic government” (see Weaver 1988).
This, again, is a strategy for implementing reform that may help to minimise negative
consequences. Strategy 5, find a scapegoat, is shifting the responsibility for reform
measures. As indicated in the context of prospect theory, the European Union and especially the Economic and Monetary Union (EMU) are probably the best examples of
scapegoats in welfare state reforms. Strategy 6, jump on the bandwagon, is swinging
opinion towards the direction of the winning group. In the context of welfare state reform, this seems a strategy that either is not likely to occur or reinforces the difficulty of
reform. Strategy 7, circle the wagons, is used when blame is inevitable and aims to
share as much blame as possible, for instance by including the opposition in a reform
package that is highly unpopular. Finally, Weaver’s strategy 8, “stop me before I kill
again”, is restricting the discretion over the choice. The EU’s stability and growth pact
11
and the introduction of an independent European Central Bank are examples of such a
strategy. This strategy is also a reform reinforcer.
In sum, most blame avoidance strategies that were originally thought primarily
to work against reform, can, in fact, be employed by politicians to ease the reform efforts that they undertake.
5
Assessing the empirical relevance of the theoretical findings
We have now established that prospect theory gives us the reason why hazardous
reforms take place and that the theory of blame avoidance provides us with a list of
strategies with which politicians can deflect the negative feedback of such reforms.
Next, we search for ways to find out whether these theoretical results have empirical
plausibility.
We start with prospect theory. On the basis of the three psychological biases
(“certainty effect”, “isolation effect”, and “reflection effect”), we deduced that politicians
introduce drastic reforms only when the status quo is considered a loss. Is it possible to
assess the empirical relevance of this supposition? Obviously, this would involve a
careful conceptual discussion of what exactly is a drastic reform, a painstaking operationalization of the concept and devising a clever way of measuring it. This is still a
highly controversial issue among welfare state researchers and is also known as the
dependent variable problem (for an overview see e.g. Green-Pedersen 2004). In addition, it would include a comparable exercise for the main independent variable, namely
“risky electoral repercussions” in order to be able to establish if the status quo can be
considered a loss.
Budget cuts that reverse the trend towards increasing public debt and budgetary deficits can be considered drastic reforms because of the expansionary political
and institutional logic normally present in public finances. Moreover, such cuts can also
be considered as very risky, because of the high visibility and salience of fiscal policy,
not only during phases of government formation, but also during the yearly political
presentation of the government’s plans.
Another argument is that the criteria for entry into the EMU have forced the
governments of EU member states (and other states whose currency is strongly linked
to the Euro) to follow more radical adjustment policies than those that seemed electorally safe from the politician’s short term perspective. In the context of national social
policy changes, the EU already functioned as a whipping-boy for the politics of blame
12
avoidance in some countries (Anderson 1995), but increasingly became a major point
of reference for the Thatcherite TINA (there-is-no-alternative) arguments that underpinned proposals of more radical shifts in national policy. National governments that
tried to meet the harsh criteria of Maastricht, in our view, automatically ended up in a
losses status quo. Therefore, budgetary cuts that reverse the trend towards increasing
public debt and budget deficits indicate the losses context.
Table 2a
Budget deficits 1985–2000, selected countries
1985
1990
1995
2000
∆1985–90
∆1990–95
∆1995–00
Austria
- 2.6
- 2.4
- 5.3
- 1.7
0.2
- 2.9
3.6
Belgium
- 10.2
- 6.8
- 4.3
0.1
3.4
2.5
4.4
Denmark
0
- 1.0
- 2.3
2.5
- 1.0
- 1.3
4.8
Finland
3.3
5.3
- 3.7
7.0
2.0
- 9.0
10.7
France
- 3.0
- 2.1
- 5.5
- 1.3
0.9
- 3.4
4.2
Germany
- 1.1
- 2.0
- 3.3
1.1
- 0.9
- 1.3
4.4
Greece
- 11.6
- 15.9
- 10.2
- 1.8
- 4.3
5.7
8.4
Ireland
- 10.3
- 2.8
- 2.2
4.5
7.5
0.6
6.7
Italy
- 12.7
- 11.8
- 7.6
- 0.6
0.9
4.2
8.2
Netherlands
- 4.1
- 5.7
- 4.2
2.2
- 1.6
1.5
6.4
Portugal
- 7.2
- 4.9
- 4.5
- 3.0
2.3
0.4
1.5
Spain
0
0
- 6.6
- 0.6
0
- 6.6
7.2
Sweden
- 3.9
3.8
- 7.7
3.7
7.7
- 11.5
11.4
Great Britain
- 2.9
- 1.6
- 5.8
3.9
1.3
- 4.2
9.7
Notes: A negative entry means that there is a deficit; a positive entry means that there is a surplus;
changes are absolute changes.
Source: To be added.
If we look at Table 2a, we observe that of the 14 countries for which we had data, 9
were still increasing their budget deficits between 1985 and 1995. These 9 countries,
however, clearly reversed this trend as a result of which every single country was reducing its budget deficit measured over the period 1995–2000. This policy reversal can
be taken to indicate that there is indeed a losses frame and that there is therefore
some empirical confirmation for the basic cause of risky welfare state reform.
13
Table 2b
Australia
Public debt 1985–2002, selected countries
1985
1990
1995
2002
∆1985–90
∆1990–95
∆1995–02
..
22.6
42.2
..
..
19.6
..
Austria
49.8
57.9
69.4
60.0
8.1
11.5
- 9.4
Belgium
118.8
125.2
129.8
106.8
6.4
4.6
- 23
Canada
66.3
73.5
99.2
..
7.2
25.7
..
Denmark
74.9
65.8
73.9
49.0
- 9.1
8.1
- 24.9
Finland
..
14.5
58.1
43.2
..
43.6
- 14.9
France
37.9
39.5
59.4
57.1
1.6
19.9
- 2.3
Germany
41.6
42.0
59.1
60.5
0.4
17.1
1.4
Greece
47.2
89.0
108.7
99.8a
41.8
19.7
- 8.9
Ireland
99.7
92.6
80.8
43.0
a
- 7.1
- 11.8
- 37.8
a
Italy
82.1
103.7
123.1
107.0
21.6
19.4
- 16.1
Netherlands
68.7
75.6
75.5
64.5
6.9
-0.1
- 11
Norway
34.6
32.4
41.1
..
- 2.2
8.7
..
Portugal
57.0
65.3
65.9
53.2
8.3
0.6
- 12.7
Spain
48.6
48.5
68.4
59.3
- 0.1
19.9
- 9.1
77.2
58.0
a
- 21.7
34.3
- 19.2
Sweden
64.6
42.9
Great Britain
59.4
39.1
58.9
42.0
- 20.3
19.8
- 16.9
United States
53.5
60.9
68.3
..
7.4
7.4
..
a
2001.
Notes: Debt is general government gross public debt as a percentage of nominal gross domestic product;
changes are absolute changes.
Sources: Data for 1985–1995: Comparative Political Data Set 1960-2002 [OECD Economic Outlook 75,
2004]; data for 2002: Schuknecht (2002).
Table 2b summarizes the development of the public debt and basically we find the
same pattern as in table 2a. Of the 14 countries for which we had data for all the years,
1o were still increasing their debt between 1985 and 1995. All countries, except Germany, however, clearly reversed this trend as a result of which 9 countries were reducing their public debt measured over the period 1995–2002. Also this policy reversal can
be taken to indicate that there is indeed a losses frame and that there is therefore
some empirical confirmation for the basic cause of risky welfare state reform.
As with respect to prospect theory, we need to ask if it is at all possible to assess the
empirical relevance of the mechanisms of blame avoidance that may help to explain
how the need to reform (in the context of the losses frame) is successfully translated.
Let us, first, briefly discuss the empirical applicability of the reform concept.
Pierson (2001) criticized mainstream welfare state theory for not capturing fully the
multi-dimensionality of reform. He therefore reconceptualized reform as having three
dimensions. First, cost containment is the attempt to keep balanced budgets through
14
austerity policies, including deficit reduction and tax moderation. Cost containment is a
feature of all welfare states. Second, recalibration consists of ‘reforms which seek to
make contemporary welfare states more consistent with contemporary goals and demands for social provision’ (Pierson 2001: 425). This is an unlikely route for blame
avoidance, because it belongs more to the expansion phase of the welfare state and is
therefore more suitable for credit claiming. Levy (1999) has argued that some policies
can turn vices into virtues. However, this is an option that can only occur if there are
very (regime) specific vices that already lead to serious “blaming”, such as the disability
scheme in the Netherlands (see Kuipers 2004). Finally, recommodification is the attempt ‘to restrict the alternatives to participation in the labour market, either by tightening eligibility or cutting benefits’ (Pierson 2001: 422).
Pierson (2001) argued that each regime (social democratic, liberal or conservative) is characterized by its own specific “new politics” of welfare state reform. So, in the
liberal regime voters are less likely to be attached to the welfare state than in the conservative or social democratic models. Since the level of decommodification is fairly low
already here, further restricting the alternatives to participation in the labour market (i.e.
recommodification) is the politically most feasible feature of welfare state reform. In the
social democratic welfare regime, voters are highly attached to, and dependent on, the
welfare state. Recommodification is not so much on the political agenda of reform, but
– if only because of the sheer size of the public sector – cost containment is. The conservative regime is probably the most ill-adapted model of the three worlds of welfare
capitalism, as a result of which recalibration and cost containment are the two dimensions of reform that dominate. Here the issues are how to stimulate job growth in the
underdeveloped service sector and how to contain the exploding costs of pensions,
disability, and health.
In contrast to Pierson, however, we think that – like cost containment – recommodification is a feature of all welfare reform efforts, irrespective of the regime, especially given the basic cause of reform (the losses frame) that we identified above.
These are at the same time by far the most risky strategies, as a result of which the
politics of blame avoidance should be most prominent here. In our empirical analysis,
we therefore concentrate on recommodification and cost containment.
Can we convert the expectations of blame theory to what we expect on the basis of mainstream welfare state theory? The strategy of redefining the issue, i.e. spending the costs of reform, can be recognized in recommodification policies that are presented as cost containment. Cost containment, while the demand for social expendi-
15
tures remains the same or increases, implies recommodification. We may assume that
no government will ever defend reform policies of popular social programmes as explicitly aiming at reducing the level of protection from the market, that is as explicitly recommodifying. Instead, harsh retrenchment policies will always be portrayed as necessary efficiency measures (for impopular social programmes the opposite would apply).
Although this is not uncontroversial, we conceptualise recommodification as the
opposite of decommodification (cf. Bonoli 1998) and define the latter as ‘(…) a citizen’s
relative independence from pure market forces’ (Esping-Andersen 2000: 353). To
measure the extent of decommodification, Esping-Andersen’s (1990) index is widely
used. This index incorporates 1) benefit replacement rates, 2) the number of qualifying
weeks; 3) the numbers of waiting days; 4) the duration of the benefit; and 5) the coverage of the benefit for unemployment insurance, sick pay and pensions. The higher the
score on this index, the higher the extent of decommodification. We therefore take that
a lowering of this score through time indicates recommodification.
Table 3 summarizes the development of the decommodification index between
1980 and 2002. On average, the changes in the three welfare regimes are rather
small.1 In the conservative regime, the extent of decommodification increased somewhat between 1980 and 1985 and then stabilised. In the social democratic regime, we
see an increase between 1980 and 1985 as well, but here there is some recommodification between 1985 and 1990 and stabilisation from 1990 onwards. In the liberal regime, the extent of decommodification is stable until 1990, then converts into recommodification between 1990 and 1995 and decommodification between 1995 and 2002.
1
To make the averages as adequate as possible, we have not included Italy and Switzerland in
any of the regimes but present their data separately. Whilst Italy is often placed in the conservative welfare
regime, it has been convincingly argued that the Southern European welfare states have their own logic
and should therefore be seen as a separate welfare regime (Ferrera et al. 2000). Unfortunately, Scruggs
(2004) does not provide data for the other Southern European countries (Spain, Portugal, Greece) so we
cannot include this regime. Switzerland is often placed in the conservative regime and, equally often, in the
liberal regime. The former is probably correct for the period 1980–early 1990s; the latter probably for the
early 1990s onwards.
16
Table 3
Decommodification index 1980–2002, selected countries
1980
1985
1990
1995
2002
Liberal Welfare Regime
Australia
20.1
19.2
18.3
18.5
17.9
Canada
25.8
25.2
25.2
25.1
25.8
Ireland
21.8
25.8
22.2
23.1
28.9
New Zealand
23.8
24.5
24.4
22.0
22.9
Gr. Britain
22.9
22.4
23.8
24.2
24.7
US
18.6
18.6
19.0
18.1
18.1
Average
22.2
22.6
22.2
18.5
23.1
Austria
27.8
28.4
27.3
28.1
28.8
Belgium
30.5
29.5
30.2
30.4
30.1
France
27.7
30.0
30.3
29.6
27.0
Germany
30.7
30.8
30.5
30.9
30.2
Netherlands
31.8
34.7
33.7
33.5
34.6
Average
29.7
30.7
30.4
30.4
30.1
Conservative Welfare Regime
Social Democratic Welfare Regime
Denmark
33.0
34.2
33.3
35.0
34.9
Finland
27.9
31.4
30.4
30.3
30.1
Norway
33.5
36.7
34.8
35.0
37.3
Sweden
36.4
41.0
36.9
34.5
32.5
Average
32.7
35.8
33.9
33.7
33.7
Italy
20.6
24.0
24.2
24.3
26.7
Switzerland
32.2
32.3
30.2
28.4
21.9
Notes: See for the construction of the decommodification index Esping-Andersen (1990) and Scruggs and
Allan (2004).
Source: Scruggs (2004); averages own calculations.
This picture of rather unspectacular changes transforms in a mixed picture if we focus
on the whole time series 1980–2002 instead of on snapshots through time, and on individual countries instead of on welfare regimes’ averages.2 What we can identify on
the basis of these time series is, first, a group of countries (Austria, Belgium, and Denmark), where the increase of decommodification levels off over time, but where recommodification is not a feature of reform. Second, there is another group (Australia,
New Zealand, Sweden, Switzerland) that is clearly characterised by recommodification.
Third, the data show that there is a group of countries where either nothing changes or
17
the level of decommodification keeps increasing (Canada, Finland, Germany, Ireland,
Netherlands, United Kingdom). The final group, then, consists of the countries that
have very peculiar structural breaks in their development (France, Italy, Norway, United
States).
As stated, the decommodification index has different components so that a variety of reform measures can result in a change in the index. Most of the components’
changes are fairly transparent (replacement rates, waiting days, benefit duration, and
benefit coverage) and are thus not likely candidates for blame avoidance. One, however, is much more non-transparent (qualifying weeks) and is thus a likely candidate for
blame avoidance. The recently publicised Welfare State Entitlement Data Set (Scruggs
2004) presents data on the different components of the decommodification index, allowing us to see what caused the trend towards recommodification and the structural
breaks identified above.
Lets us begin with the countries displaying recommodification. In Australia, the
only component that declines substantially is pension coverage, i.e. the portion of those
above official retirement age who receive a public pension (Scruggs 2004). In New
Zealand, the replacement rates for sick pay and unemployment insurance (UI) were
increased between 1981 and 1986 (potentially indicating decommodification) and were
then lowered (potentially indicating recommodification); the waiting days for UI were
doubled in 1982 and subsequently remained the same; the waiting days for sick pay,
finally, were doubled in 1991. In Sweden, a lot of changes took place but the steadily
lowering of the replacement rates of UI, sick pay and pensions were probably critical.
Also in Switzerland, there is a large number of changes of which the reduced sick pay
coverage, measured as the percentage of the labour force with sick pay insurance
(Scruggs 2004), is the most substantial. But also the increase in UI waiting days and
the increased number of qualifying weeks for pensions are important here.
In sum, only in Switzerland, some of the change in the decommodification index
is caused by the “invisible” measure, qualifying weeks. Is this different in the countries
that display peculiar structural breaks? The structural break in France’s decommodification occurs in 1982, when the level suddenly increases substantially and remains
stable until around 1996. Then another break occurs and decommodification decreases
to a lower level than in the pre–1982 period. In 1982 it is the qualifying weeks for UI
2
thors.
Figures on which the statements that follow are based are available upon request from the au-
18
that increase, but this recommodifying trend is offset by increased UI duration. The
break in 1996 is caused by increasing UI waiting days and a lower sick pay duration.
The Italian decommodification level is very low until 1983. After the break, there
is a sudden increase and then stabilization between 1983 and 2000, when a further
increase commences. Higher UI replacement rates cause the index to increase and
offset these benefits’ extra waiting days. It is the withdrawal of these waiting days that
caused the index’s additional increase in 2000.
The Norwegian decommodification index displays an increasing trend until the
sudden decrease in 1990 that continues to the – again – sudden increase in 1998. It is
difficult to precisely identify the causes of these changes because the different components show little alterations. However, the higher score in 1998 can be attributed to an
extension of the UI duration.
The American decommodification pattern shows a structural break in 1990,
namely a decrease in the index. Like the Norwegian index, also here it is difficult to
distinguish what instigated the structural rupture. Probably the lowered UI replacement
rates and the lowered coverage of this benefit are the primary suspects. All in all,
again, the only non-transparent measure, the qualifying weeks, are not important in the
reforms.
The strategy of throwing good money after bad, i.e. softening the pain of reforms, is difficult to translate into the terms of mainstream welfare state theory and also
hard to operationalise and measure for quantitative comparison. However, we know
that in many countries various cost containment measures were introduced – varying
from tightening the eligibility criteria and lowering the benefit replacement rates to the
abolishment of whole social programmes – that were subsequently followed by special
measures to compensate partly the disadvantageous impact on income equality and
poverty. However, cross-national studies of aggregate data and of survey data on income (the Luxembourg Income Study) indicate that generally speaking both incomes
inequality and poverty have increased (see e.g. Huber and Stephens 2001: chapters 6
and 7). One may infer from this that most probably throwing good money after bad
does not fully compensate retrenchment, but is used as a political strategy for its high
symbolic positive potential.
Pass the buck, i.e. delegation of the blame and/or automatic government, is another important strategy in welfare state reform. Retrenchment policies very often take
the form of national framework laws that specify general objectives for lower level government to attain. To redefine competencies and delegate them to lower levels of gov-
19
ernment or to quasi-governmental institutions is also an option. This strategy therefore
includes various shifts in governance that aim to shun direct government responsibility
(including decentralisation and privatisation). Although we would need much more specific data and although trends in sub-national government spending are caused by a
variety of variables, table 4 nevertheless tells us that – with the exception of Germany
and Ireland – there is a clear growth in sub-national governments’ share in general
government spending both in federal and unitary countries. It implies that sub-national
governments are more directly and clearly accountable for a larger amount of general
government tasks and therefore also for reforms.
Table 4
Sub-national government spending 1985 and 2001, selected coun-
tries
a
b
1985
2001
∆ 1985–2001
Austria
28.4
28.5
0.1
Belgium
31.8
34.0
2.2
Canada
54.5
56.5
2
Germany
37.6
36.1
- 1.5
United States
32.6
40.0
7.4
Unitary countries
Denmark
53.7
57.8
4.1
Finland
30.6
35.5
4.9
France
16.1
18.6
2.5
Greece
4.0
5.0
1
Ireland
30.2
29.5
- 0.7
Federal countries
Italy
25.6
29.7
4.1
Netherlands
32.6
34.2
1.6
Norway
34.6
38.8
4.2
Portugal
10.3
12.8
2.5
Spain
25.0
32.2
7.2
Sweden
36.7
43.4
6.7
Great Britain
22.2
25.9
3.7
a
Or earliest year available: 1986 for Ireland; 1987 for the Netherlands and the United Kingdom; 1990 for
Norway; 1991 for Germany; 1993 for Sweden; 1995 for Austria, Belgium, Denmark, Finland, Greece, Portugal and Spain.
b
Or latest year available: 1998 for Ireland; 1997 for Canada; 1999 for Portugal; 2000 for the United Kingdom.
Notes: Sub-national government spending as share of general government spending; change is absolute
change.
Source: Joumard and Kongsrud (2003).
20
Moreover, a feature of welfare schemes also particularly suitable for passing the buck
is found in indexation, a usually highly technical and therefore poorly visible matter (see
Weaver 1988). Many benefits are automatically coupled to developments in the economy, for instance the inflation rate, the growth rate of private sector wages, the level of
the minimum wage, etc. Passing the buck would imply that a blame avoiding retrenchment strategy would tinker with the indexation rather than with, for instance, the replacement rate of benefits. The information we have from the Scruggs data set suggests that in a substantial group of countries very little happens to the replacement
rates. To know more about this strategy, we would need to look at how and at what
level the basic (or lowest) social benefits are coupled to the (minimum) wage development in the economy. An increasing distance between benefits and wages, presented
as a technical adjustment of indexation, would be an indication of “passing the buck”.
We have not yet found the data that could verify this.
Finding a scapegoat, i.e. shifting responsibility, is almost an automatic response
for political actors who get into trouble. We already mentioned the example of the EU
and especially the EMU criteria that apparently has helped many governments to do in
the 1990s what they said they would do already in the 1980s. Ferrera and Gualmini
(2004) convincingly show that is has been the tightening of EU constraints that in Italy
in the first half of the 1990s enabled reform oriented politicians to introduce drastic reforms. As a result, between 1992 and 1998 the inflation rate dropped from 5 to 2 per
cent, and the deficit fell from 10.7 to 2.8 per cent (although the public debt continued to
rise from 107.7 to 116.3 per cent of GDP). The EMU convergence criteria provided
quantitative norms against which to measure success or failure as well as a clear and –
for Italian standards – inexorable deadline. These criteria could be presented to the
Italian public as external “givens” with which national politician had to comply. Noncompliance would not simply mean failure to enter the EMU, but economic loss. The
blame game was played out as follows: ‘Actors had to choose between a potentially
positive sum outcome (adjustment and entry) and a negative sum outcome (no or insufficient adjustment, non-entry and therefore high losses for virtually all actors’ (Ferrera and Gualmini 2004: 24). Italian politicians were used to deal with competitive electoral pressure by increasing public spending and refusing to raise taxes, thus causing
rising levels of public debt (Newell 2000: 164). The Maastricht criteria blocked this and
at the same time provided the scapegoat for cutting public spending and raising taxes.
According to Hering (2003: 5), circling the wagons, i.e. sharing the blame as
widely as possible, is probably the most important strategy for avoiding blame, particu-
21
larly in the form of ‘(…) an all-party consensus to diffuse blame’. If the major opposition
party is no credible defender of the welfare state, ‘voters may be unable to blame the
government for welfare cutbacks because they have no reasonable alternative to turn
to’ (idem). As a result, ‘(…) governments are more likely to initiate welfare state reform
if they command a large majority in parliament and are in a powerful electoral position’
(idem: 9). This would imply that in systems with multiple veto points and veto players,
such as Germany, all major reforms necessarily are the result of system-wide bargains.
It would also imply that in multi-party systems the number of surplus-coalitions as opposed to minimal winning coalitions increases and/or that the size of the surplus increases. Over the period 1980–2002 there are three countries that had (almost) always
surplus coalitions (Finland, Italy and Switzerland). Three other countries – ignoring the
3 months experience of Greece – that have had surplus coalitions in the past, provide
some evidence for the hypothesis that the number of surplus coalitions is increasing.
So, Belgium had a surplus coalition from 1999–2002, after almost 20 years of a minimal winning coalition. France possessed a surplus government from 1993–2000 after
more than a decade of single party governments, single party minority governments
and multi party minority governments. And the Netherlands turned to a surplus coalition
in 1998–2000 after 15 years of minimal winning coalitions (Comparative Political Data
Set 1960–2002 [see Woldendorp et al. 1998; Political Data Yearbook, various issues]).
The “stop me before I kill again”, i.e. restricting the discretion over choice, strategy is frequently used when coalition partners agree upon certain budget norms to
govern their spending behaviour during their period in office or when a system-wide
bargain is struck that incorporates such a budget method in law or even the constitution. At the European level Ulysses (the member states) have delegated their power
over monetary policy to an independent European Central Bank in order to be able to
listen to the song of the sirens (low inflation) without the risk of being shipwrecked. The
implication is that many countries that had central banks that were fairly to strongly
dependent on the political whims of the government (those with a score of 3 and lower
in table 5), have jumped to a high level of independence (4 to 5). The cost of this
change is that politicians no longer have control over monetary policy. The benefit,
however, is that they can point to the ECB as the cause of their tied hands and consequently shift blame.
22
Table 5
Central banks’ independence 1980–1995, selected countries
Australia
1
Austria
3
Belgium
3
Canada
1
Denmark
4
Finland
3
France
2
Germany
5
Greece
2
Ireland
3
Italy
2
Netherlands
4
New Zealand
3
Norway
2
Portugal
2
Spain
3
Sweden
2
Switzerland
5
Great Britain
2
United States
3
Notes: Central bank independence is measured by an index that ranges from 1 to 5, the higher, the more
independent. This index is based on the location of final responsibility for monetary policy, the absence or
presence of government officials on the board of central bank, and the percentage of board appointees
made by the government (see Eijffinger and De Haan 1996).
Source: Comparative Political Data Set 1960-2002 [Eijffinger and De Haan 1996].
The ‘(…) political commitment to fiscal discipline’ (Blöndel 2003: 9), is one of the major
instruments to attain a balanced budget. Although this is best represented by the introduction of the Euro and the self-imposed EMU criteria, also the non-EU member-states
politically aim for fiscal consolidation. The United States has introduced the Budget
Enforcement Act; Switzerland recently passed a constitutional amendment that mandates a balanced budget; and Australia and New Zealand have, respectively, a Charter
of Budget Honesty Act and Fiscal Responsibility Act to show their political commitment
to fiscal discipline. Therefore, also these countries can use the “stop me before I kill
again” strategy of blame avoidance.
All in all, we end this section by concluding that the – admittedly somewhat
fragmented – empirical material we have presented, indeed helps to explain how the
need to reform (in the context of the losses frame) is successfully translated.
23
6
Conclusion
Why and how drastic or radical reform takes place, in spite of the institutional mechanisms and political resistance counteracting change, remains one of the key puzzles of
contemporary welfare state research. Especially the dynamics of reform are still largely
unaccounted for, as are the basic cause and the necessary causal micro-mechanisms
explaining the link between cause and effect. In this paper we therefore posed the
question why and how politicians do risky reforms?
Drawing on prospect theory we identified the so-called losses frame as the basic cause of reform. This means that policy-makers only take risks as the outcomes of
the status quo are no longer perceived as gains but as losses. Prospect theory furthermore predicts that reform takes place under similar conditions (status quo equals a
loss) and thus contradicts the mainstream expectation that welfare states reforms take
place according to regime specific logics. We presented some arguments and data on
public finances that reinforce the idea that reform indeed does take place in a losses
frame and that this is a feature that all types of welfare state regimes have in common.
For a solution to the problem of causal mechanisms, we turned to the theory of
blame avoidance. Usually, blame avoidance strategies are taken to explain welfare
state resilience, but they can also be used as strategies to avoid the blame that accompanies risky welfare state reform efforts. We tried to identify the blame avoiding
strategies by providing empirical material and found that some could be clearly recognized, while others much less so. For instance, we used the decommodification index
to establish whether the strategy of redefining the issue was employed. We expected to
see recommodification everywhere, but this expectation was not fully supported by the
empirical evidence. The “stop me before I kill again” strategy, by contrast, was shown
to be empirically relevant.
In sum, in trying to answer why and how politicians do risky reforms, we described the basic cause and blame avoidance mechanisms of welfare state reform and
provided some data and illustrations to probe their empirical relevance. Fully appreciating that more and better empirical assessments are necessary, we formulate the following twofold conclusion: first, politicians do not do risky reforms, unless they consider
that upholding the status quo is no longer a political (electoral) option; second, of the
many strategies available, some (e.g. pass the buck, finding a scapegoat and “stop me
before I kill again”) are more likely to be chosen than others (such as redefining the
issue).
24
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