International Journal of Sociology and Social Policy
When workfare fails: post-crisis activation reform in the Czech Republic
Tomas Sirovatka,
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When workfare fails:
post-crisis activation
reform in the Czech Republic
Tomas Sirovatka
Masaryk University, Brno, Czech Republic
Abstract
Purpose – The purpose of this paper is to analyse Czech’s activation reforms enacted since 2006
which culminated in 2010-2012 as radical workfare-like reforms. It also aims to explain which factors
have influenced their development.
Design/methodology/approach – The paper is the case study of activation reforms in one country
interpreted within the theoretical framework of the “activation models” and discussion of the factors
influencing activation reforms. The design and implementation of the reforms of activation policies are
in focus. Institutional analysis is combined with secondary statistical data and survey data.
Findings – The author distinguish three phases of the activation reforms: the initial phase of
activation (work first), the radical phase (workfare) and the failure of radical workfare as the final
phase. The key argument is that the main factors leading to the radical workfare version of activation
were the political factors combined with institutional factors, particularly, the specific model of policy
making (the so-called “compost model”). Ironically, this model which has enabled fast and radical
workfare-like reforms was also the main reason why the reforms failed.
Originality/value – The paper is innovative since it explains the specific features of the activation
reforms in the Czech Republic, distinguishing workfare from other models of activation, and
identifying the factors which have played a role in shaping these features. The in-depth case study of
one country provides the evidence on the role of the specific factors and helps the author to understand
the motives, the design and the implementation of activation reforms in their mutual relationships.
The specific role of the institutional legacy in the new circumstances is emphasized.
Keywords Social assistance, Activation models, Compost model of policy making, Workfare
Paper type Research paper
Introduction
Numerous studies emphasize the increasing role of “activation strategy” within the new
societal and economic context: the ageing of society and shrinking labour force,
combined with global competition and the crisis, have enormously increased the
economic pressures on the welfare state. Labour market marginalization, poverty,
social exclusion and emergent social disintegration represent other challenges. In this
context, activation measures are expected to bring more employment, in particular in
the lower end of the labour market, higher government revenues, as well as less welfare
dependency, thus increasing household incomes and social inclusion.
Nevertheless, activation measures are of a different nature. There has been no
consensus achieved among scholars on defining “activation”; see Moreira (2008). More
generally, it is understood as a “set of policies/measures/instruments aimed at
reintegrating unemployed people (typically social assistance recipients) into the labour
market” (Hanesh and Baltzer, Hvinden, in Moreira, 2008, p. 7). Sometimes, activation is
understood as a dynamic linkage among social welfare, employment and labour market
International Journal of Sociology
and Social Policy
Vol. 36 No. 1/2, 2016
pp. 86-101
© Emerald Group Publishing Limited
0144-333X
DOI 10.1108/IJSSP-01-2015-0001
Received 2 January 2015
Revised 24 March 2015
Accepted 30 April 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0144-333X.htm
This study was written with the support of the Czech Grant Agency (Project No. P404/11/0086,
Modernization of Czech Social Policy).
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programmes (Barbier, 2004, p. 48). This dynamic link is mainly produced by balancing
rights and duties, harmonizing social security benefits and taxation, and coordinating
benefit schemes with a variety of labour market policy tools, with a link between social
assistance (SA) and labour market policies being central (cf. Lødemel and Trickey,
2001; Saraceno, 2002; van Berkel and Møller, 2002; Serrano Pascual, 2004; OECD, 2007).
The literature has traditionally identified two stylized “model approaches” to
activation which are understood as “ideal types” while in reality, activation strategies
usually include elements of both approaches, signalling “contingent convergence”
when demanding and enabling measures that are mixed (Eichhorst et al., 2008a).
Although these two ideal types were differently labelled (Lødemel and Trickey, 2001;
Barbier, 2004; Bonvin and Farvaque, 2007), they may be understood as work first
strategy, which emphasizes the duty of accepting any job or work programme,
irrespective of its quality or suitability vs the human development approach, which
emphasizes finding and retaining a suitable, meaningful job, underpinned with skills
and capabilities. Bonoli (2010, 2013) departed from the above dichotomous distinction
and suggested a typology including four ideal types of active labour market policy:
incentive reinforcement (positive and negative incentives to work), employment
assistance (facilitating (re-)entry into the labour market), occupation (keeping the
jobless occupied in various schemes) and human capital investment (upskilling).
Some authors distinguished the so-called workfare version of activation (Lødemel
and Trickey, 2001; Handler, 2004; Lødemel and Moreira, 2014). The normative debate
on the activation paradigm has concentrated exactly on this workfare version of
activation since workfare challenges the principles of social rights/social citizenship
(compare Betzelt and Bothfeld, 2011; Eichhorst et al., 2008b; Evers and Guillemard,
2012; Handler, 2004; Moreira, 2008 and others): not only workfare increases
(re-)commodification of labour, by making it more dependent on the market;
workfare mainly pays an unfair “living wage” in the form of benefits when rewarding
work activities that make a contribution to society. Two further issues emerge: the first
concerns the opportunities available to individuals for making “a contribution to
society”. The second concerns the activities that can be considered to make a
contribution to society (Moreira, 2008).
One may assume that workfare is different from the work first approach or incentive
reinforcement, although it is quite compatible with them and sometimes not well
distinguished from them; also Bonoli (2013, p. 20) associated workfare with a
(re)commodification strategy rather than with active social policy. Workfare is
understood as “programmes or schemes that require people to work in return for social
assistance benefits” (Lødemel and Trickey, 2001, p. 6), underlined by the author.
Neither the work first approach nor incentive reinforcement extend so far.
In this paper we are dealing with the Czech activation reforms enacted since 2006.
These reforms are interesting because, although they were initiated relatively late
(when compared to other countries), a series of other “radical” activation measures
followed quickly within a short time span. There are two interrelated questions dealt
with in this paper: first, to what extent the Czech activation strategy has been inclining
towards workfare; second, which factors have influenced developments of activation
policies in a specific direction[1]. Theoretical debates on the factors influencing
activation policies have suggested the following: the problem (benefit dependency),
political factors (political parties and others), institutional factors, path dependency and
a profile of the target group (Lødemel and Trickey, 2001). Similar factors were
discussed by Bonoli (2010, 2013), who distinguished political explanations (power
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resources and partisan politics), public opinion and societal values based on
explanations, institutional explanations (including the timing hypothesis, which
suggests that the influence of the institutional factors may change over time with the
changing contextual factors) and the diffusion of ideas (and learning). The above
factors will inspire the empirical analysis.
The paper is structured as follows: in the next section, we characterize the pre-reform
SA scheme as it was established and functioned in the Czech Republic before the later
substantive reforms were initiated (before 2006). In the third section, we analyse the
development of the activation strategy in the Czech Republic. We distinguish three
phases of the developments: the initial phase of activation: work first approach, the
radical phase (workfare) and the failure of radical workfare as the final phase. In the
fourth section, we discuss the factors that have influenced the direction of the reforms in
SA. In the last concluding section, we summarize and discuss the findings.
Emergence of SA in the Czech Republic
After the “Velvet Revolution” in 1989 the Czech welfare state was continuously
transformed in order to better fit the challenges of the market economy. In particular,
new instruments like active labour market policies, unemployment protection and SA
had to be established. The Living Minimum Act and the closely related Act on Social
Need introduced a new SA scheme in November 1991 that was mainly concerned with
the protective objectives during the first market transition period fitting well into the
political strategy of “protest avoidance” (for this label see Vanhuysse, 2006a, b) as a
basic social safety net that provided a guarantee of minimum income.
The SA scheme designed at the beginning of the 1990s was relatively generous as
its SA scheme provided an approximate 55 per cent replacement of the net average
wage for a single person, 99 per cent for a couple and 181 per cent for a family of four.
No financial incentives such as disregards on earnings or back-to-work bonuses were
provided to SA recipients.
The administration of the SA scheme was not favourable for activation either.
The first obstacle (until 2012 when SA was merged with Public Employment Services
(PES)) was an institutional split between the SA administration by municipalities and
the employment services administration. Municipalities required only formal proof
from SA benefits recipients that they were registered as jobseekers at the employment
office. They neither intervened in their job search nor cooperated in activating SA
recipients with employment offices since legislation did not oblige them to do so.
Another important obstacle to activation was the serious implementation deficit:
social departments did not have enough personnel to provide social work to their clients
or activation measures. There were about 300 clients for every front-line staff member at
the social departments, while a reasonable estimate was that there should have been at
most about 150 clients for one staff member. Additionally, the demanding administration
procedures associated with making decisions about benefit claims hindered individual
social work (see Ministry of Labour and Social Affairs (MLSA), 2005).
The activation reform
The initial reform steps (2006): incentive reinforcement/work first
The reform of SA in 2006 aimed to provide adequate minimum guarantees, while
increasing incentives in order to “activate” welfare recipients (cf. MLSA, 2005; Vládní
návrh, 2005). The most important of these changes was the restricted access to SA
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benefits for youth: according to the new legislation, adult children and parents sharing
accommodation were considered a household when testing the means of subsistence
for the purpose of the main benefit – the allowance for living. In practice, this measure
excluded most unemployed youth from benefit entitlements. Data confirm a significant
decrease in the number of SA recipients: between 2006 and 2007, this was by about
58 per cent (from 169,000 to 72,000) ( Jahoda et al., 2009).
At the same time, positive work incentives in the form of disregards on earnings
were implemented: after 2007, only 70 per cent of income from work and 80 per cent of
income from sickness and unemployment benefits were taken into account when
testing for the means of subsistence.
Furthermore, case-work with benefit recipients had to support their activation: the
elaboration of an “activation plan” was required for those who were recipients of
welfare benefits for more than six months (and a “plan of individual motivation” for
those whose situation required immediate assistance). The reform of SA also aimed to
differentiate SA recipients between deserving (and provide them full rights to the SA
scheme, that is, the living minimum) and undeserving/inactive (provided at most with
only restricted SA scheme rights; this was the existence minimum but dependent on the
discretionary decision by front-line staff).
The reforms in the SA scheme were accompanied with reforms in unemployment
protection and employment policies, mainly focused on youth and the long-term
unemployed. The new Employment Act of 2004 entailed several measures of increased
conditionality and administrative pressures, restricted access to or cuts in
unemployment benefits and, finally, creating work-pay measures aimed at
improving work incentives. Furthermore, a wider definition was implemented of the
term “suitable job”: this included temporary jobs, that is, those that last for longer than
three months and amount to 80 per cent of full-time. In the case of long-term
unemployed persons, the job may last for even a shorter period of time provided that it
corresponds to no less than 50 per cent of full-time. It was not strictly necessary to take
into account qualification, abilities, accommodation and accessibility by transport (only
health status had to be considered). Refusal to participate in a temporary job (including
subsidized jobs such as public work programs) or non-compliance with the individual
action plan commitments might result in sanctioning the unemployed (loss of benefit
entitlements for a period of six months instead of three, as it had been before).
Lastly, the Employment Act of 2004 established a duty for employment offices to offer
individual plans to those unemployed who are younger than 25. Participation was
voluntary and, as documented in some studies (Sirovátka et al., 2007; Horák and
Horáková, 2009), it was beyond the personnel capacities of employment offices. The target
of 25,000 individual action plans for 2006 promised in the National Reform Programme
of 2005-2008 was not met: there were only 7,000 signed in 2006 (data of the Ministry of
Labour and Social Affairs (MLSA), 2007).
Radical activation: Workfare I (2007-2008)
In the June 2006 elections, the Social Democrat-led government lost its majority in
parliament and, after difficult negotiations, the centre-right coalition government of Civic
Democrats, Christian Democrats and Greens emerged with a slight majority in parliament.
Within the comprehensive package of the “social reform” acts of August 2007
legitimized by an “affordable credit” objective, the new parliament accepted one important
change in the SA scheme: the automatic revaluation of subsistence and existence
minimums was cancelled; it has been at the sole discretion of the government since 2007.
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Since 2008, the period covered by unemployment benefits was shortened from six to
five months (and from 9/12 to 8/11 months in the case of the unemployed over 50/55
years of age, respectively), while the level of benefits was increased in the first two
months from a 50 per cent replacement rate to 65 per cent, left at 50 per cent for the next
two months, and 45 per cent for the remaining month(s). At the same time, the period
spent on studies was no longer recognized as a substitute for a work record for the
purpose of unemployment insurance entitlements. Next, the activation plan, which had
been under the jurisdiction of the social departments of the municipalities since 2006,
was cancelled. Instead, employment offices were obliged to implement activation plans
with all unemployed after five months of their unemployment.
The key measure concerned entitlements for SA benefits: these were cut again in
September 2008, in effect as of January 2009. After six months, SA benefit recipients
were automatically entitled only to an existence minimum instead of a living minimum.
Only in cases in which they participated in public works for a total of 20-30 hours per
month were they entitled to a living minimum plus a supplement in the amount of
30 per cent of the difference between an existence and a living minimum. If they worked
more than 30 hours, they received a bonus to the existence minimum in the amount of
half the difference between the living minimum and the existence minimum. In August
2009, about 24,000 of the 123,000 claimants for the living allowance were evaluated to
be entitled to the lower benefit corresponding to the mere existence minimum. The new
institute of public service (a workfare condition for the entitlement of being provided a
living minimum) was criticized by the Ombudsman because only few municipalities
offered sufficient opportunities to SA recipients to participate in the programmes for
public service jobs (CT24, 2009): in 2009, only 10 per cent of the municipalities
organized these activities (Ministry of Labour and Social Affairs (MLSA), 2010).
These circumstances were harmful to the principle of reciprocity, which constitutes
an inherent argument for workfare: SA recipients were given unfair obligations which
could not be met.
Workfare II: attack on social insurance rights
In 2009, the government was disbanded and new elections were held in June 2010,
whereby the centre-right coalition was reaffirmed. They continued strong activation
reforms as well as strict reforms aiming to stabilize the public budget. This effort
intensified due to the crisis and the deficit of the public budget, which increased from
0.5 per cent to 4.9 per cent in 2009 and 4 per cent in 2010. At the same time, the numbers of
unemployed nearly doubled to about 560,000 in 2010 when compared to 2008
(i.e. about 9 per cent was the registered unemployment rate in 2010) (Ministry of Labour
and Social Affairs (MLSA), 2011). The number of SA recipient households nearly doubled
as well: from 65,000 households in 2008 to 73 in 2009, 91 in 2010, 103 in 2011 and 116 in
2012 (average annual figures) (Ministry of Labour and Social Affairs (MLSA), 2013a).
The new activation measures adopted in 2011 represented a continuation of the
radical activation reforms with great emphasis on the workfare principle along with
further deterioration in rights to protection. First, positive incentives in the form of
bonuses to the living minimum or the existence minimum in the case of participation in
public service were cancelled. Instead, all unemployed (regardless of whether they were
SA recipients or unemployment benefit recipients) were obliged after two months of
unemployment to participate in public service for up to 20 hours per week (which in
fact corresponds to a part-time job). Refusal could result in exclusion from all
entitlements to unemployment or SA benefits. The Ministry of Labour and Social
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Affairs planned to increase participation in public services from 15,000 to 50,000
(mainly long-term) unemployed people in 2012 (Ministry of Labour and Social Affairs
(MLSA), 2012a). This target was achieved: by the end of November 2012, 47,000 (mostly
long-term) unemployed participated in the measure (Ministry of Labour and Social
Affairs (MLSA), 2012b). Although in practice the measure was applied mainly to the
long-term unemployed, discretion was given to employment offices to punish even
those short-term unemployed who were entitled to unemployment benefits based on
social insurance rights. This penetration of the workfare principle into the social
insurance scheme is a unique feature of the Czech version of workfare reform.
Another form of pressure on the unemployed meant that dealing with working in
the shadow economy was a new duty, implemented at the end of 2011; in 2012, it
required them to appear twice a week at a given time at “Czech points” established at
post offices[2].
The last measure was again the increased control over the use of SA benefits by
introducing more in-kind benefits: while in 2009 an electronic payment tool was
implemented in cases where recipients were suspected of misusing benefits for
inappropriate purposes, from 2012, social cards have been implemented, aimed mainly
at this category of SA benefit recipients.
Further measures were adopted in an Employment Act amendment which aimed to
increase pressure on the unemployed: people who terminated their labour contract
without “serious reasons” received only a 45 per cent replacement rate after the first
month, and people who receive severance pay do not get benefits during the period
covered by severance pay. On the other hand, positive incentive for the unemployed in
the form of “non-colliding employment” (this means that earnings up to half of
minimum wage were tolerated in part-time temporary jobs to the unemployed as a
supplement to entitlements for unemployment benefits) was cancelled.
The last important element of the activation reform was the governance reform of
2010-2011, which did not aim so much to improve the governance of ALMPs, but rather
to have a cost-containment objective. The emerging trend in 2010-2011 was
re-centralization; this involved the stronger subordination of local employment offices
to the central of PES shifting more competences from the local (77 local employment
offices) to the centre and regional level (14 regional offices). At the same time during
2011, the number of PES employees dropped from 8,136 to 6,237, when three waves of
staff reduction took place and some of the staff quit voluntarily (Ministry of Labour
and Social Affairs (MLSA), 2014).
In 2011, another decision followed to merge the SA administration with the
employment offices by shifting the administration of SA to the Public Employment
Office in January 2012. Only 1,953 of the original 3,642 staff working on this agenda at
municipal social departments were employed at employment offices. The reduction of
staff in 2012 was more than 60 per cent compared to 2011 when it was in the
competence of municipalities. Understaffing of the SA administration was heavily
criticized by the Ombudsman (Veřejný, 2012).
The institution of shared mediation (i.e. outsourcing of mediation and counselling to
private agencies implemented into legislation in 2011) did not become reality because
the financial rewards offered to the private agencies were set too low in legislation, thus
failing to convince these agencies to take part.
Finally, data on the participation of the unemployed in ALMP measures confirm a
divergence of the Czech activation strategy from the general trend in the EU, which was
more inclined to expanding ALMP measures during the crisis. The scope of the ALMP
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measures was modest before the crisis (2008); in 2008, participants in active employment
policy measures accounted for 21.6 per cent; in 2009 it was 17.0 per cent; in 2010,
22.5 per cent; in 2011, 19.1 per cent; in 2012, a mere 9.6 per cent and in 2013, 14.9 per cent
of the unemployment stock[3]. This development was due to cuts in ALMP expenditures
as well as to the governance reforms of PES implemented during 2010-2011.
When assessing the activation strategy within this short period culminating during
the crisis, the direction of the reforms may be understood as a significant shift towards
explicit workfare: workfare requirements were extended to the short-term unemployed
and positive incentives in workfare were cancelled.
The failures of the activation reforms (2012-2013)
The common features of the activation reform measures which led to several failures were
their poor preparation, design and implementation. These aspects were neglected since the
reforms simply aimed to cut public expenditure, which was the key political commitment
of the government (Programové, 2010). Then preparations of the policy measures were
explicitly dictated by this aim and often unprofessional. Furthermore, the procedures of
their approval were non-transparent and non-standard. The negotiations of the new
governance reform of the Employment Office in 2011, from its initial “merit proposal”
up to its submission to parliament, took only three months, while the new Employment
Act of 2004 took one whole year to negotiate (Kotrusová and Výborná, 2015). These
circumstances were also the reason for the refusal of this act by the President (Stanovisko
prezidenta republiky, 2011). In spite of this, the parliament, where a government coalition
held the majority, quickly overruled the refusal of the President.
During 2012 and 2013, it became apparent that several measures implemented as
activation reforms suffered serious weaknesses and were criticized, thus most of the
reforms had to be abandoned. The most important was the decision by the
Constitutional Court from November 2012 to discontinue the institution of public
service as a compulsory activity for those who were unemployed for more than two
months, enforced through a punitive sanction[4].
Second, after strong criticism from many stakeholders, including the Ombudsman’s
Office, the so-called “social cards” were also cancelled in 2013. There were several
reasons for this: apparent disadvantages as well as negative financial impact on the
recipients (discomfort, fees paid for the administration of cards and other services) and
considerable flows of public resources going to the private financial company
established to administer the system of the social cards.
Furthermore, the screening of the unemployed implemented within the DONEZ
project (i.e. controls at the “Czech points”) was abandoned as well. The Ombudsman
criticized this measure strongly (as well as representatives of the political opposition),
since the unemployed were not provided any employment services or support in job
searching when appearing in person at the “Czech points”: the measure in fact infringed
on their social rights (Veřejný, 2012). In January 2013, the Ministry of Labour and Social
Affairs decided to diminish the numbers of the unemployed required to visit the Czech
points and also to terminate the project by September 2013 (MLSA)[5].
Further, a positive turn may be seen in the decision to increase the personnel
capacity of the employment offices and to strengthen the individual approach to the
unemployed. In order to improve the capacity of PES, in 2013 the Ministry of Labour
and Social Affairs increased personnel by 250 permanent employees and
150 temporary employees, both in employment policy and the non-contributory
benefits agenda (Ministry of Labour and Social Affairs (MLSA), 2013c). With the new
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temporary “caretaker government” established in July 2013, a more substantial
decision was made: to accept 700 new employees who would be clearly pro-client
oriented, that is, 319 positions in 2013 and the rest in 2014 (Ministry of Labour and
Social Affairs (MLSA), 2013d). During 2013 the number of PES staff was increased
from 8,382 to about 9,000, and in January 2014 it reached 9,407. In spite of these
measures, the estimate (MLSA, 2014) of the understaffing was still about 20 per cent at
the beginning of 2014, compared to the situation in 2011 preceding the reform.
The overview of the key reform steps is provided in Table I.
Date Legislation Contents of the reform (keywords)
Work first/incentive reinforcement
2004
March
Act No. 435/2004 Coll.
Employment Act
Wide definition of suitable job (temporary,
part-time)
Stricter sanctions in the case of non-cooperation
(exclusion from registers and benefits for 6 months)
Individual action plans to be offered to the youth
2006
March
Act No. 110/2006 Coll. on living and
existence minimum
Act no 111/2006 Coll. on assistance
in material need
Existence minimum instead of living minimum
(one-third less) for the “undeserving”
Disregards earnings
Dependent children up to 26 years living with
parents considered as one household when
assessing incomes
Workfare I
2007
October
Act No. 261/2007 Coll. on
stabilization of public budget
Unemployment benefit period cut by 1 month
Period of studies no longer substitutes for work
record period
2008
September
Act No. 382/2008 Coll. (change of
Employment Act)
After 6 months, SA recipients get only existence
minimum
Public service participation required for living
minimum (+ bonus provided for participation)
Individual action plans obligatory after 5 months
of unemployment
Workfare II: attack on social insurance rights
2010 Act No. 347/2010 Coll. on austenity
measures in kompetence of MLSA
Earnings in “non-colliding employment (compatible
with UB benefits) not more possible
2011
February
Act No. 73/2011 Coll. on
Employment Office
Governance reform: centralization + staff reduction
2011
November
Act No. 366/2011 Coll. Bonuses in the case of participation in public service
cancelled
Public service participation required after 2 months
of unemployment
2011
November
Act No. 367/2011 Coll. UB cut to 45% replacement rate if job contract
terminated without “serious reasons”
Unemployment benefits not paid during the period
covered by severance pay
Failure of the reform
2012
November
Decision of the Constitutional Court
– Act No. 437/2012 Coll.
Public service as compulsory activity for the
unemployed cancelled after 2 months
2013
November
Act No 306/2013 Coll. Social cards cancelled
Table I.
Activation reforms
2006-2013
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The reform path of activation and ALMPs was from the work first approach based
more on incentive reinforcement than on employment assistance towards workfare.
What can be assessed as a specific feature of the Czech activation reforms is the
emphasis on workfare in its simple radical form, which strongly suppressed the
principles of social insurance rights. This development is different from the ALMPs
trends in Europe as discussed by Bonoli (2010). How to explain this development path
towards radical welfare (and its failure shortly after) will be discussed in the next
section.
The factors shaping the reform path and its failure
When discussing the factors (and actors) which influenced the activation reform, we
considered those discussed in the Introduction. Concerning the period until 2010, these
factors are addressed in more detail in Sirovatka (2014). We are building on this here
and concentrate on the most recent period when Workfare II was implemented and
failed shortly thereafter. Due to the space available, only the most important factors are
discussed in each stage. Their summary is provided in Table II.
The first reform steps (2006): work first approach
The reform of 2006 was mainly influenced by political factors, the profile of the target
group, and to some extent the scope of the problem.
Political and public opinion factors. In line with the protest avoidance strategy
(Vanhuysse, 2006b), the Czech government decided to provide a relatively generous
safety net in the early 1990s. In contrast to these generous policies, the centre-right
governments that were in power after 1993 were always strongly neo-liberal in their
public discourse rhetoric. The “individualization” of the causes of welfare dependency
become generally widespread in public discourse (Sirovátka, 2014). Under these
circumstances, SA benefit recipients were blamed in the eyes of the public for the gap
between the relatively benevolent approach towards them in practice.
The target group. At the time of EU accession (2003-2004), the Czech Social
Democrats who were in power faced difficult policy choices: they mainly had to
Period Factors Keywords
Work first/incentive reinforcement
2004-2006 Political
Public opinion
The problem
Target group
Protest avoidance policies vs “blaming the victim” discourse
Increase of welfare dependency vs easy access to benefits
Marginal work force, weak political group
Workfare
2007-2011 Political
The problem
Target group
Institutional
legacy
Legitimacy of welfare state reforms
Crisis: increase of UB and SA recipients, expenditure
Undeservingness argument legitimising the reforms
New policy field provides room for the radical reforms
Specific policy-making model: “emergency” WS, adaptive to political
demands, leading to compost model of policy making
Failure of the reform
2012-2013 Political Strong political demand for radical changes + speed of the reforms
Political instability (caretaker government in 2013)
Table II.
The factors which
influenced the
activation/workfare
reforms
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continue with the reform of public finance in order to diminish the public finance deficit
in order to comply with the Stabilization and Growth Pact requirements. Under such
conditions, social protection for marginal groups became the target of curtailments (for
similar conclusions, compare Kitschelt, 2001; Keman et al., 2006).
Scale of the problem. The long-term benefit dependency associated with long-term
unemployment represented one of the motives for the reforms. During the late 1990s,
unemployment became a problem in the Czech Republic. Even after 2000, in times of
accelerating economic growth, it rose to about 8 per cent-9 per cent due to structural
problems, with long-term unemployment representing over half of the unemployed
(i.e. long-term unemployment rate was above 4 per cent). Between 1997 and 2000, the
number of SA recipients more than doubled (while expenditures increased more than
threefold). During 2001-2006, expenditures on SA benefits varied between eight and
nine billion Czech crowns (CZK), which was still less than the expenditure on
unemployment benefits (8-11 billion CZK), but twice the expenditure on ALMPs (four to
five billion CZK). In this context, welfare dependency was considered a problem as was
easy access to benefits and lack of incentives for SA recipients to work. These issues
were often publicly discussed and finally expressed in the proposal to reform the SA
scheme as the main underlying reasons (MLSA, 2005; Vládnínávrh, 2005)[6].
Workfare reforms (2007-2012)
The reforms of 2007-2012 and their failure were again mostly influenced by political
factors and path dependency to some extent; see below.
Political factors. The workfare-like reforms played a crucial role in the broader
context of welfare state reforms. Welfare dependency became a key argument used by
the right-wing government when arguing for welfare state reforms aiming to cut public
spending (Programové, 2007, 2010); they included implementing fees in healthcare,
cutting family benefits, enacting reforms in pensions with less emphasis on the public
pillar, while cutting social insurance payments and implementing a flat tax on incomes.
Most importantly, there was a political push to achieve savings in social
expenditures and reforms aimed to activate welfare recipients with the requirement
being a low deficit in public finance. This motive was successfully repeated by
right-wing parties in the June 2010 election campaign (Bělohradský, 2010), although
actually the cumulative public finance deficit in the Czech Republic (at 41 per cent in
2011) was among the lowest in Europe (compared to the 83 per cent EU average)[7].
Thus, workfare reforms were easier to ratify than reforms in other fields, because
SA and activation represented new policy fields that arose after 1989 and path
dependency did not play a prominent role (see Saxonberg et al., 2013). By contrast,
pensions and healthcare already had well established institutional frameworks and
were defended by various actors. The workfare-like reforms fitted very well into the
political project outlined by the centre-right governments which were in power from
2007 to 2013, whose objective was to roll back the welfare state. Although this political
project was ratified through the use of strong ideological declarations, it was laden with
problems of poor preparation, non-standard procedures of adoption and chaotic
implementation of the measures. This approach corresponds to the “compost model of
policy-making” typical for Czech neo-liberal policy-makers (Saxonberg and Sirovátka,
2014). Within this model, centre-right governments tried to introduce proposals,
whenever possible, which would direct the country towards a more market-liberal path.
However, for various reasons, primarily the lack of political power, they did not
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propose heavy-duty, durable-goods proposals for systemic change. Instead, given their
lack of popular support and the fragile majority in parliament, they chose various types
of light suggestions and measures that allowed the situation to “decompose” and thus
create fertile ground for more systemic changes in the future. That is, the reforms were
to trigger a process of gradual change in which the components of the system do not
disappear, but rather are eventually transformed into something else, creating ground
for a new system to arise.
Furthermore, in the “compost model” of policy making, even the reforms which
failed (in the sense of making the existing system ineffective) were not perceived as a
mistake/failure. It was exactly because the new reforms failed that they could help
“decompose” the existing PES and welfare system. The composting of the failed
reforms thus established fertile ground for future far-reaching reforms such as
workfare or cuts in other policy fields.
Policy inheritance/path dependency. The workfare reforms may be understood as topdown
policy reform undertaken by the political elite. This pattern of policy making by a
small circle of policy-makers and politicians represents one of the legacies of communism.
A highly opportunistic approach to policy making represents such a legacy from the past
which persists until the present. As Inglot (2008, pp. 310-311) explains, the analysis of
“both the communist and post-communist periods (since 1989) reveals numerous
contrasting examples of creative adaptations of existing welfare state institutions and
inherited patterns of social policy making to regime change […]. On the negative side, the
same structure becomes even more vulnerable to political manipulation, and its
replication under the new regime ultimately jeopardizes serious reform efforts”.
In contrast to political and institutional factors, the diffusion of ideas or policy learning
considered by Bonoli (2010) played only a limited role: the instruments which were
implemented following the experience of the other EU countries, like individual action
plans, “non-colliding employment” or “shared mediation” (engagement of private agencies)
in job counselling and meditation do not work well due to implementation deficits.
The failure of the reforms
The final failure of the workfare reform can best be explained by the political factors
combined with the institutional factors. In the first place, the speed of the preparations
and implementation of the reforms was due to strong political demand and
enforcement, which lead to many substantial shortcomings (see the second section).
What seems to be ironic is that the “compost model” of policy making, which made it
possible to promote the workfare-like reforms, was also the key factor in their failure.
These failures of activation/workfare reforms, like the rejection of the principles of
reciprocity (balance of rights and duties), or social insurance rights, became apparent
soon after their adoption.
Another factor was the political instability leading to change in the composition of
the government: the centre-right government promoting the reforms had to resign in
2009 and again in 2013. Because the political project of the reforms (which exhibited
workfare as the flagship) was abandoned due to the change of government, it was
possible for these failures to be openly discussed and subsequently rejected.
As we can see from Table II, political factors dominated in all reform stages. In
addition, the institutional legacy lead to the specific model of policy making (compost
model) in the workfare period. This model of policy making together with political
factors influenced the failure of the workfare reforms soon after their implementation.
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Conclusions and discussion
Over the years 2004-2013, reforms of the SA scheme in the Czech Republic have followed
a direction from the work first approach towards workfare. Until 2006, the SA scheme
aimed at preventing poverty and social unrest, thus allowing for a peaceful transition to a
market economy. The reforms undertaken in 2004-2006 restricted access to SA by
increasing conditionality and repressive sanctions. At the same time, they introduced
some elements of activation based on individual support in job searches and financial
incentives. In 2007-2012, other reforms which explicitly relied on the strong enforcement
of workfare principles were implemented quickly by the centre-right government.
While until 2008 a work first activation approach was applied based mainly on
incentive reinforcement (combining repressive and restitutive sanctions), after 2008 a
radical workfare approach prevailed, where strong repressive measures were
introduced as well as workfare requirements. A similar trend was apparent in
employment policy in that unemployment protection and ALMPs with more restrictive
sanctions were implemented but with less support to employability and access to the
labour market. Finally, in 2011, workfare was expanded to apply to most of the
unemployed. This approach represents a distinct path away from the trajectories
recognized by Bonoli (2010, 2013).
The inspection of the factors behind the activation reforms in the Czech Republic
generally confirms the relevance of the factors discussed in Lødemel and Trickey (2001) or
Bonoli (2010). At the same time, the role of the specific model of policy making is
emphasized. The main explanation for the reform of the SA scheme, however, consists of
political factors and context. SA benefit recipients have been blamed for the gap between
benevolent treatment in practice and the public discourse on the causes of welfare
dependence, which have individualized the issue of poverty and eroded the public’s
solidarity with them during the 1990s and 2000s. In the initial stage of the reform, the
government led by the Social Democratic Party faced the dilemma of a double backlash;
this was in relation to the conditions that arose from the economic pressures of “negative
integration”. There was a question as to whether it was better to protect the “old risk
groups” (which form the traditional core electorate of this party), or the “new risk groups”/
marginal groups, such as SA recipients. The tendency towards the work first approach
prevailed as a consequence of the preference given to the “core electorate”. Later, during
the crisis, in the broader context of welfare state reforms, the radical workfare reforms of
the SA scheme helped the centre-right government to legitimize the other far-reaching
social reforms consisting of cuts in benefits and public services.
Second, the profile of the target group matters, as does the low legitimacy of the SA
scheme in the eyes of the public and policy-makers. The “moral failure” of the target
group became a key argument when discussing broader welfare state reforms that
aimed to cut public spending, as well as the workfare reforms.
Third, the problems of the increasing scope of welfare dependency and the related
expenditure on benefits posed a challenge to the Social Democrat-led government in the
mid-2000s. Similar problems were faced by the centre-right government in 2008-2011
during the financial and economic crisis when workfare reforms were implemented.
Lastly, institutional factors play an important role. SA and activation have
represented new policy fields since 1989, in contrast to policy fields like pensions and
healthcare, whose institutional frameworks were already established and defended by
various actors. Second, the context of weak civil society and a top-down model of policy
making represented an opportunity for politicians and policy-makers to promote their
proposals of reforms. These proposals were, similarly as in the communist past,
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dictated by political demand. In the conditions of parliamentary democracy, these
proposals are pushed through with the help of the newly emerging compost model of
policy making, aiming to decompose the existing system and provide fertile ground for
changes in the future.
What might be considered an ironic consequence of the dominance of political
factors in shaping the workfare reforms and promoting them is that the “compost
model” of policy-making has inevitably led to considerable failures in the design and
implementation of the measures and policies. These failures have become a strong
argument for their refusal later in time.
Notes
1. What we leave as an issue for further research is the impact of activation strategy.
2. This measure was designed as the ESF project DONEZ, the purpose of which was announced
by the Ministry of Labour and Social Affairs to halt illegal work.
3. The author’s own computations based on data provided by the 2014 MLSA web portal.
4. The proposal to the court was submitted by parliament members of the opposition Social
Democratic Party.
5. The reasons being first, the low effectiveness of the measure – due to the project only with
about 7,300 of the unemployed (their total number was above 500,000 in 2012) – some
administrative proceedings due to misconduct were initiated; and second, criticism by the
Ombudsman (2012).
6. However, the expenditure on SA benefits still did not represent more than about 0.2 per cent
of GDP. The main explanation for the reform of the MI scheme should be seen instead in
the broader political context of the partisan politics that shape the dynamics of the Czech
welfare state.
7. Data from the European Commission.
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Corresponding author
Tomas Sirovatka can be contacted at: sirovatk@fss.muni.cz
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