. .j ■ 2. Theoretical perspectives on the welfare state The remarkable growth of explanations and studies of the welfare state has brought arwul some Iheorelieal disorganization. Scholars often fail lo distinguish adequately among the various explanations, use broad terms such as pluralist or nev-Marxisl to cover quite different arguments, and gloss over the fact that different theories contain similar arguments. It is well worth the effort lo systematize the different theories of (he welfare state into a parsimonious yet meaningful scheme that can guide the specification and testing of the hypotheses to follow in the empirical chapters. We begin this effort by making a distinction between demand-based theories, which attend to the externally generated demands of groups and classes for spending, and stale-based or supply theories, which consider the characteristics of stales thai autonomously determine the supply of spending. Concentrating initially on the demand theories, we review the three questions raised at the outset a( the book hut attach more distinct theoretical labels lo the answers and systematically present the theories. We then turn lo the sliite-based theories. laying out their basic arguments and predictions and contrasting them with those of the demand theories. Demand theories l'o review, theories of the welfare slate address each of the three questions we discussed in the first chapter. I'irst. docs welfare spending respond primarily to class structure and class interests or lo economic development and the si/e of ascriplive groups such as the aged'.' Second, does the welfare stale redistribute income to groups most in need and reduce inequality, or does il maintain inequality and the power of dominant classes or interest groups? Third, do technological, economic, anil class constraints limit the independent actions ol democratic political institutions lo affect welfare spending and social equality, or can democratic political processes anil parties counteract economic pressures lo raise or limit soeial welfare spending.' Ik'cause these questions are presented as clear dichotomies, the answers to them are simplified, but ihey still allow us to compare and contrast the basic positions ol" existing theories. As a preview of the n Theoretical perspectives on the welfare state Table 2.1. Summary of theoretical predictions ClasS- Reduced Polities I'lienry based inequality independent Industrialism No Yes No Monopoly capitalism Yes No No Social democratic Yes Yes Yes Interest group polities No No Yes nunc detailed treatment to follow, we can biicily summari/e the theories In connecting them lo the preceding questions. I'irsl. industrialism theory explains the welfare stale as the necessary result ol technological development £Kcri>cl al.. I%4). This theory assumes that welfare spending helps maintain"economic and social equilibrium in industrial societies. In lunclional terms, the welfare slate bcnclits all members ol societ)', but the needy who icccivc the bcnclits are rewarded most directly (Wilensky. W15). Since it transfers income from the well-off lo the poor, welfare spending leads to lower inequality. Overall, the theory predicts nonclass determinants of social welfare spending, reduction id" inequality from welfare, and little inlluence ol democratic politics on cilher. These arguments are summarized in 'fable 2.1. where the dichotomized answers of the industrialism theory lo the three questions arc listed in the first row. Second. info-Mancisls. who disagree with the functionalist assumptions of iu-díísl (talis in (neory!oHer arguments that are similar in nature bul different in their implications. Rejecting the view that industrial growth and welfare benelil all members of a society and reduce inequality. U.'ConnorJt 1973) argues that welfare functions lo maintain the power of capital and reduce soeial protest. Although such arguments attribute utile independence lo the stale, they have been extended lo consider how a more autonomous slate can mediate class struggle while maintaining conditions for capital accumulation (I'oulant/as. I')7N: Olle. I WD. The monopoly capitalism theory, then, predicts class dclcrminantř of social wellare spending, no effect of welfare on cqualilv. and little inlluence of democratic polities on either (see Table 2.11. 'Ijmd. another ueo-MaixisI theory focuses on the strength of worker move mculs and the social democratic or socialist parlies that represent them in the political class struggle, Like the monopoly capital theory, ibis theory emphasi/es the importance of class; yet. il argues that the wellare stale results from the 1754 44 34 61 735 0276 00 5466 24 Age, class, politics, and the welfare state political cITorls oľ workers can lead lo (lie election oľ leľlisl parlies, which then implement welfare programs lhal redistribute income lo workers and the poor. The social deniocraclic theory predicts class delerminanls of social welfare spending, reduction of inequality front welfare, and important class-based political influences on bolh. Cyjftlh, an intemry claims that democratic political institutions combined with demographic and economic changes in group structures explain I he growth of welfare spending. Unlike the functionalist views of the industrialism theory, it emphasizes the impact of political conflict and mobilization of interest groups in democracies. Unlike class theories, it recognizes Ihe competition among a variety of ascriptive and economic groups lhal transcend and fragment (he distinction between labor and capital. The stale ami democratic political processes have Ihe potential lo influence Ihe economy, according lo the theory, bul since spending goes to groups with the most political power, the inllucncc is seldom in Ihe direction of greater equality. This brief review fails to capture ihe complexities of Ihe theories and provides only a preliminary overview of what is discussed in more detail in Ihe next sections. However, il does illustrate several themes that run through Ihe various theories. To some degree, each theory addresses common questions and oilers a unique set of answers to the questions. This is apparent in Tahle 2.1. which shows, in simplified form, how Ihe combination of predictions uniquely defines Ihe theories. Il also provides a strategy for testing the theories. I-or any single issue or question. Ihe theories overlap: il is only when al least (woof the questions arc considered that ihe theories can be fully distinguished anil tested. Another way lo compare the theories is to cross-classify the questions and answers. This is shown in Table 2.2. The rows in the (able identify Ihe different views of the role of class in social welfare spending: the columns classify the redislribulivc consequences that welfare spending may have: and the diagonals indicate which of Ihe institutions - economic or political - dominate welfare spending and equality.' Lach cell defines one of Ihe four demand theories of Ihe welfare stale. Given the 2x2x2 classification, there are eight potential cells but (inly four theories. This indicates overlap in the classification (or ovcridcnlilica-tion): Two of the dimensions are sufficient lo identify each of Ihe theories, and the third is redundant. However, considering all three dimensions shows precisely how each theory (1) shares some arguments with each of Ihe oilier theories and (2) differs in important respects from each of Ihe oilier theories. The monopoly capitalism and social democratic theories share assumptions about the dominance of class cleavages, and Ihe industrialism and interest group theories share pluralist assumptions. Monopoly capitalism and interest group theories both argue (hat the welfare state maintains inequality, whereas the imlnslriaiisni anil Theoretical perspectives on the welfare stale 25 Table 2.2. Typology of theories of social welfare spending, social equality, and the influence af political institutions Maintain Reduce inequality" .Structural Primarily economic (structuralist) dynamics Political and economic (group agency) inequality" .Social Monopoly Social classes capitalism democratic Organizational theory theory unit for mohili/alion of interests •Sotial- Industrialism Interest group deinographie theory politics theory groups (si rata) Reduce inequality" inequality" "Dimension refers lo (he diauonals of die lablc. social democralic theories argue that it reduces inequality. The industrialism and monopoly capitalism theories, despite having widely divergent ideological bases, both focus on the response of stale action to economic and productive relations, whereas ihe social democralic and interest.group theories, also from widely dil-lerenl ideological perspeclives. attribute Ihe ability lo political institutions and parties to act independently of economic structures. With this background and overview in mind, wc can consider in more detail each of the theories. Industrialism theory Hrst. wc can consider (he logic of industrialization or industrialism theory .as applied lo Ihe welfare slate and social equality. Advocates ol Ihe theory (Kun>cl al.. l°o4; Form. IW: Kerr. 1983) argue that Ihe technological imperatives of industry shape the economic and social institutions of all industrialized nations. As a result. nations lend to converge, or become more similar, as they industrialize (Inkeles. I"8I). Like oilier institutions, the stale responds to exogenous technological imperatives and lakes a spec i lie form in all advanced industrial 85 26442� 1527 42 783305 7454 24 2428 18 78 6 26 Age, class, politics, and the welfare state nations. The state performs a regulatory function to help organize and plan for technological development and lo provide the- stable environment needed for complex production procedures. Expansion of the state is closely lied to the direel requirements of the industrialization process and contributes to economic progress (Goldlhorpc. 1969). Implications for determination of social welfare spending follow from these general arguments. Industrialization involves dislocations and differentiation in family and work. Urbanization, divorce, geographical mobility, and smaller families reduce the functions of the family and the support it can provide during periods of financial need. At the same time, the demands of industry for young, recently educated, cflicicnt workers create employment problems among the sick, the unemployed, single-parent families, and the aged. Since many vulnerable persons arc unable to obtain traditional support from family members, the state, serving as a mechanism to meet the needs of the population, expands to provide social welfare support. The benevolence of the state, a more or less automatic rcsniHisc. stems ultimately from the needs of industrialization. Support for superfluous groups through welfare spending allows employment of a specialized, skilled labor force that contributes to economic growth in industrial societies. An early statement of much the same argument comes from ^ľigner (1983 |I8X3|). His law of iiurca.sint; stale activity holds that the size of the public sector relative to the private sector rises with real per capita income. In part, public sector growth is a response to the expanded administrative needs of an increasingly complex industrial society (l.arkey. Stolp, and Winer. 1981). Perhaps more importantly, the public sector grows because the demand of households lor services and their willingness lo pay taxes are income elastic (Cameron. I*)7X|, The need of governments lo meliorate the harmful effects of industrialization thus occurs simultaneously with increases in income, which enables funding of public programs. Ik-sides income, demographic changes in age structure are important for the growth of the welfare slate, because of the growth, in absolute and relative terms, of the aged and retired population in industrial societies and loss of traditional family support, much of the social welfare effort of governments is directed to the aged (^Vileňšfcy. 197?). Private pensions, if they exist, are seldom adequate, so the slate responds to the linaneial plight of this population by providing public pensions. Again, the slate is not an autonomous force in the growth of pensions but responds to siibsiruclural changes in the age structure, family, and labor force. In addition to arguments about the aged, oilier aspects of population structure may be important in the determination of welfare spending, particularly in developing nations. Imtwislc and Wincgarden (1984) argue that as fertility and Theoretical perspectives on the welfare state 27 family size decline, parents recognize that there will be fewer children lo support Ihem in old age. Children, as they grow lo adulthood, likewise recognize that they have fewer siblings with whom to share the burden of supporting their parents in old age. Pressure for governmental old-age pensions thus comes from nonaged family members and relates lo the number of children relative lo the number of parents they have to support. Like proponents of other industrialism arguments. Hntwisle and Wincgarden emphasize the response of governments to the needs of the population, but consider the effects of declining fertility during industrialization as well as those of the increasing aged population. According to the industrialism arguments, technological and industrial development leads lo reduced inequality, partly through the growth of social welfare and pension spending. Directly, the logic of industrialization leads to greater social equality through the growth of middle-level occupations, greater knowledge and skills of workers, higher educational levels, increasing worker control over crucial knowledge, and growth of high economic rewards (Kerr ct al.. I9b4). Indirectly, industrial development leads to greater social equality through higher welfare spending. Croups in need receive the greatest share of welfare expenditures, and. on the whole, the effects of welfare spending are egalitarian (Wilen-sky. 1975). Because of the common economic and demographic constraints, state actions in general and social welfare expenditures in particular lend lo be similar among industrial nations (Pryor. I9d8). Ajparticularly jnmoilantj: sample of convergence relates lo the comparison of capitalist and socialist nations. Given thai both desire industrial development and face the homogenizing demands of ad-vancedHJjduslrial technology, work, public policies, and inequality in the different societies have much in common (Parkin. 1971: Connor. 1979) despite vastly different political systems and forms of economic ownership. The systems are clearly not identical: The form of welfare spending may vary from cash transfers in capitalist societies to full employment ami slate-owned housing in socialist nations. Yet. the demands leading lo the varying forms of social welfare are the same in both types of societies (Bell. 1973). To sum up. «c can describe the theory in terms of the three dimensions listed earlier, ľ'irst. the theory recognizes but minimizes the importance of class divisions and gives primary attention lo a variety of economic and demographic groups, with particular attention lo the aged. A pluralist conception of group competition best lit s this theory; consensus and cooperation, with regulation of competition by the state, is the norm among these multiple groups. Second, the theory argues that the welfare stale is on the whole egalitarian in result. Wilen-sky"s study offers a defense of the efficacy of the welfare stale: others similarly see problems in the welfare slate as due to failures of desire and implementation 4703 44 84 4284 3 4 61 4 77 2839 28 Age, class, politics, and the welfare state ralhcr than problems inherent in such programs (Mishra. 1984). The welfare state benc/ils not only (lie needy but society overall through its contribution to industrial growth. Third, the theory sees the stale as responsive to the needs of technology and industry and. as a result, responsive to the economic and demographic needs of the population. Although not denying the necessity of political democracy for long-term industrial development, the theory nonetheless attributes little independent influence to the political parties that occupy the government or to the institutional structures of the slate. Since all political parlies favor economic growth, all support the demands of industrial and technological development. Critique. Critics of the industrialism theory focus oiV weaknesses in both the theoretical arguments and the quality of empirical evidence in support of them. Theoretically, the industrialism arguments fail to specify clearly the mechanisms by which problems or needs of (he aged and other groups translate into higher social welfare expenditures. Ľntitlcmcnt provisions in welfare programs may automatically raise expenditures in response to more recipients; deprived groups or their professional and bureaucratic representatives may exert political pressure to raise spending: or leftist and working-class parties acting in the interest of the subordinate classes may intervene to raise spending. By emphasizing the automatic response of governments to the needs of the population, industrialism theory only vaguely identifies (he causal linkages involved. In addition, industrialism theory fails to predict or account for the financial problems and weakened political support for the welfare stale apparent in many advanced industrial nations. Given that the welfare state responds to the needs ol" industries and groups adversely affected by industrialization, and contributes to economic growth and increased equality, there is little reason to expect the emergence of sustained political opposition to the welfare slate in recent years. Because of the functionalist emphasis on equilibrium, and the assumed responsiveness of the welfare stale and political institutions to the imperatives of industry, industrialism theory applies less well to the crisis of the welfare stale in the I970s_and 1980s than it does to the consensus in the 1950s and 1960s. The theoretical assumptions formulated during optimistic earlier decades may not generalize well to other lime periods and cast doubt on the general validity of the theory. Empirically, support for the industrialism theory comes from a number of studies, most of which quantitatively analyze a large cross section of developed and developing nations. Cutright (1965) and Jackman (1975) examine the experience with social insurance programs, and VVilcusky (1975) and Aaron (1967) look al the actual expenditures of nations for various programs. Most of these Theoretical perspectives on the welfare state 29 authors also study income inequality (Cutright-, 1967; .laekmaii, 1975; Wilcnsky, 1975). Their results generally show a strong influence of economic development and percentage aged on various forms of social welfare effort and a strong influence of social welfare effort on income inequality. Political variables, except for some weak effects of political democracy, have little effect on any of the dependent variables. Such Undings have been updated by Wilcnsky (1976. 198 I). who adds corporatism to the determinants of social welfare spending, and by lintwisle and Winegarden (1984), who add fertility to the determinants of pension expenditures. Other more specialized studies of infant mortality (Shin. 1975). educational institutions (Inkeles and Sirowy, 1983). and female labor force participation (Wilcnsky. 1968) find strong effects of industrialization and modernization variables. However, these quantitative studies may he methodologically Hawed. Castles aiid McKinlay (1979) argue thai because there is a bimotlal distribution of nations on development, with a huge gap between advanced industrial nations and others, analysis of both clusters together merely shows that rich nations can afford to spend more on social welfare than nations with barely enough food to feed the population - a trivial conclusion. What is needed to support the industrialism theory is the demonstration of a relationship between development or percentage aged within as well as across these clusters.: Neo-Marxist theories of advanced monopoly capitalism The late 1960s and 1970s proved to be a period of theoretical innovation and resurgence for Marxist theory. The neo-Marxist theories, al least as Ihcy apply to the welfare slate and social equality, differ in important respects from traditional Marxist theory and deal with a number of problems in the original formulations (Uuroway. 1982). This theoretical revival has led to a variety of new ideas, each with its own variations on the standard arguments. What links them is their focus on class conllict and productive relations in soeielies and their view of the capitalist stale. In this section, we focus on these neo-Marxisi theories of monopoly capitalism (in the next section, we consider a group of fundamentally different neo-Marxist theories of working-class strength). According to the monopoly capitalism theories, the stale plays a more active - albeit not completely independent - role in advanced monopoly cap:talism than ii diil in the theories of Marx. Traditional Marxist theory views the stale as an instrument to be Idled and controlled by representatives of the dominant class and to serve primarily as a means to repress protest among workers. In contrast, the work o\' O'Connor (1973). O lie (1984). andJJmiliHU^as (1973. 1978) sees the state as crucial to capital reproduction. hiM)'Cjimiiir_>r973). the stale must 53 92 30 Age, class, politics, and the welfare state perform two major but contradictory functions. The lirsl is to assist in private capitial accumulation. In order to increase the productivity of labor and the profits of capital, the stale subsidizes the costs of education, social insurance, research and development, and transportation and communications. The second function is.to maintain social harmony or legitimacy through expenditures for nonproductive parts of Ihc population (e.g.. public assistance.-food and housing subsidies). These expenditures control the surplus population politically and expand demand in domestic markets.' The purposes of these two types of expenditures arc ultimately contradictory. With subsidies from the stale, monopoly capital grows in Ihc short run. but in the long run it necessarily overproduces, contracts, and lays oil workers. Since the stale receives few of the profits during periods of economic growth and must support surplus workers during periods of economic recession, public costs exceed revenues. Hence, the fiscal crisis of the stale emerges. O fie (1984) makes the similar point that monopoly capitalism must preserve the commodilicalion of labor for economic growth and at the same time dceommodify labor to reduce the harmful effects of the private market. Both processes are necessary for the survival of monopoly capital bul are inherently contradictory. Recurrent crises of fiscal policy, national planning, and population loyally occur, making governance in capitalist democracies problematic (Oľľe. 1984). Given the structure of monopoly capitalism, then, advanced capitalist economies converge in both levels of stale expenditures and the economic and social problems that result (Gough. 1979). In part lo deal with inevitable crises, capitalism may transcend the boundaries of individual nations. The need for capital accumulation leads to the search for foreign markets and cheap foreign labor. Through economic and trading lies, as well as political and military relations, low- and middle-income peripheral and semipcriphcral nations are exploited by multinational corporations in the core nations. Just as in core nations, forms of foreign aid and welfare spending may emerge in noncore nations to maintain social harmony in the (ace of the harmful effects of capitalist production (O'Connor. 1973). Capitalism slill creates, even among economically dependent nations, the same problems of unemployment, poverty, and social discontent and the same need lor social welfare spending lo maintain conditions lor continued capital accumulation as in core nations. The stale in monopoly capitalism need not be directly manipulated anil occupied by class-conscious capitalists (Mock. 1977: I'r/eworski and Wallerstcin. 1988). O'Connor (1973) sees the state as a partner in capital accumulation and Offe (1984) as the outcome of the contradictions of capital accumulation. I'ou-lanl/.as (1973. 1978) further extends the concept of the relative autonomy of the slate. He argues that the state must neutralize contradictions rooted in capitalist economics in order to reproduce the capitalist structure. The state functions to Theoretical perspectives on the welfare state 31 atomi/.e working-class interests and organize unity .within the capitalist class. This requires an autonomous stale lhal transcends the short-term interests of a few capitalists in the longer-term interests of the class (see also Gough. 1979). Ultimately, the stale may become Ihc site of class struggle and mediate conllict between class power blocks (Poulantzas. 1978: Quadagno. 1984). Whatever the views, however, they are related by their assumption that the stale is embedded in the capitalist system and must contribute lo capital accumulation. The state may be relatively autonomous, but it cannot be emancipated completely from the constraints of the capitalist logic of accumulation (Gold et al., 1975; Pr/.e-worski. 1985:201). UjHojhis point ihr monopoly capitalism theories show some similarities lo 'l'Vjilli^liin-UdLsi-iücluUaidiiiiii theories. ■ Myles (1984) argues that both theories are structural-functionalist, since both see Ihc welfare slate as responding to functional imperatives: In one case, the imperatives are technological; in the other case, they relate lo the needs of monopoly capitalism. In Slinchcombe's (1968:80) terminology, functional explanations Heal the consequences of a social arrangement as the causes of thai arrangement. Monopoly capitalism theory, by focusing on the beneficial consequences of welfare spending for capital accumulation, relics on a functional explanation. The explanation differs from lhal oľ functionalist theory in that there is no locus on general societal needs or equilibrium - oidy on the needs of the capitalist class - but the similarities of the two theories should not he overlooked (Stinchcombe. 1908).J The theories more strongly diverge over the effectiveness of social welfare spending in reducing inequality. According lo the monopoly capitalism theory, the weHiířevstale reduces class tensions, but without threatening control oľ the capitalist market. Social insurance programs arc most likely built up from the contributions of workers themselves and do little lo transfer income from the rich lo the poor (Stinchcombe, 1985). Other types of programs may place income in the hands of the needy, but (hey do not cover the loss in wages brought about by changes in the capitalist economy: whatever the benefit levels lo the unemployed, retired, or single-parent families, they do not equal income from productive employment. If. as some claim (S/yinanski. 1978). taxes lo finance welfare programs are regressive, even meager benelits lo the poor may do lillle more than return lo the poor what they contribute to the government. Although offering some short-term benelits lo the poor, public assistance programs more importantly dampen discontent and help maintain the environment for capital accumulation (Offe. 1972: O'Connor. 1973). Rather than a means to achieve equality, the welfare stale is a means of social control employed lo regulate and exploit the lower classes (I'iven and Cloward. 1971). Although advocates of the theory are vague about whether they support dismantling of the welfare slate (Mishra. 12 B7C 99 15 C/$B 44 5421 8755 15 52 0�6994 72 32 Age, class, politics, and the welfare stale 1984). they arc critical of its intent, hold opinions similar to those oľ neoconser-vative critics oľ the welfare stale (Skocpol. 1985a). and reject the welfare stale as a source of equality for the poor and Ihc working class. Nco-Marxist arguments have also been extended and applied to (lie aged, but again differ from industrialism arguments. Pivcn and Cloward (1971) argue that Social Security in the United States was a response of the government to social protests such as the Townsend movements. Although the program offered meager benefits and covered modest numbers of workers, it quelled the protests and maintained conditions for the growth of capital. Similar points are made in more detail by Laura Olson (1982). Aged persons in modem capitalist societies become the least productive workers (as also argued by industrialism theory) anil face loss of work. Public pensions mute ihe protests that result from forced retirement while raising the productivity of the work force. Private pensions, although benefiting relirecs to some degree, have Ihe more important characteristic of providing a source of capital for further investment. Pensions are thus a form ol social control that reinforce existing inequalities. In summary, there are many diverse neo-Marxist views of the slate, yet they share a number oľ common attributes.5 The welfare state is seen as a response to Ihc contradictions of advanced monopoly capitalism and is largest where capitalist power is most concentrated. The welfare state relieves pressure from the contradictions in the short run. although this does little to change the nature of class relations, the power of capital, or the levels of social equality. The stale may become relatively autonomous compared to traditional Marxian conceptions but is not a source oľ structural change lor the good of the working class. This creates considerable ambivalence toward the wclľarc state among nco-Marxists. While arguing that the welfare state creates and exploits a permanent underclass (Offe. P>72). advocates of the theory likely oppose the logical goal of dismantling the welfare state (e.g.. compare Piven and Cloward. 1971 and 19S2). Still, this ambivalence distinguishes the theories from others that support the welfare stale more unambiguously. Criiit/in-. Monopoly capitalism theory avoids one problem of industrialism the-or\ - it does not icily societal needs. It specifies which groups bendit from the Mructure and which do not. and recognizes conflicting interests among groups. liven so. monopoly capitalism theory anil neo-Marxist theories are syiýciMo other criticisms of functionalist arguments: They tend to be tautological and difficult to ľalsiľy_Xlic theories assume that stale policies benefit ihe capitalist class; empirical study then illustrates how events can be interpreted to lit the assumptions. When contrary evidence is indisputable, the arguments are refrained to maintain the original assumptions without allowing the assumptions to be falsi- Theoretical perspectives on the welfare slate 33 lied. As Cawson (1985:4-5) states. "neo-Marxism asserts a structurally guaranteed dominance forclass interests of capital through the institution of Ihe stale. Iividencc of slate policies which favor noncapitalisl interests is rendered by some theorists consistent with this assertion by the tortuous logic oľ the idea oľ the relative autonomy oľ Ihe state." The theories thus lack specilic, testable propositions and rely on abstract assertions that are plausible hul difficult to prove false. A related weakness of the neo-Marxist theories is that they devote little.attention to explaining the diversity among similar capitalist nations. None oľ the theories attempts to make systematic comparisons across nations, and each assumes that ils arguments apply to all advanced capitalist economics. Yet. enormous variation in wclľarc stale policies exists among capitalist nations that is not adequately explained by Ihe neo-Marixisl theories. Ľven if all capitalist nations face the same accumulation demands, each nation may ľullill I he m diľľerenlly. Another criticism of the neo-Marxist theories is that Ihcy provide inadequate treatment of democratic politics. The argument that the stale is autonomous coexists with the argument lhal incumbents in the government make liltle difference in the level of social wclľarc spending. The argument oľ autonomy must be accepted to deal with many examples oľ policies implemented that were opposed by capitalists. Yet. the next logical step, lhal the stale may act against ihe needs of capital, is not taken. Skocpol (1980) argues that neo-Marxist theories really do not take the state seriously, since they do not recognize the potential of the stale, independent oľ class structure, to realign economic institutions and productive relations. Similarly. Stephens (1979) and Korpi (1983) crilici/.e Ihe theory for ignoring how public policies respond to democratic elections and philosophical differences between parlies. The theory's excessive economic determinism fails to account for Ihe different policies of nations like Sweden and the United Slates, which vary in the electoral power given to social democratic or labor parlies. Finally, although illustrative evidence exists for Ihe monopoly capitalism theory, there is little systematic empirical support, (iriflin's time-series studies of the United Stales (Cirillin. Devine, and Wallace. 1983: Griffin and Leicht. 1986) show that measures of economic downturn, such as unemployment in competitive sector industries and industrial utilization, affect transfer payments net o\' government revenues, inllation. defense expenditures, and transfer payments lagged (see also Isaac and Kelly. 1981. Devine. 1983. 1985. for similar studies). Their model, however, explains short-term lluclualion in payments rather than long-term growth of. or cross-nalional differences in. the welfare slate. Debate also exists over the validity of treating endogenous variables in Ihe budget-making process - revenues and expenditures - as exogenous (Jennings. 1983: Jencks. 02 D0A 82 4 34 Age, í7í/.v.v, politics, and the welfare Male 1985). Cross-national studies show less support for the theory. Stephens (1979) and Myles (1984) use a measure of monopolization (in part estimated from gross domestic product) but lind lhal il has no effect on social welfare or pension spending. Hicks and Swank (1984) use a measure of assets of the world's largest industrial corporalions in u nalion divided by GNP and lind positive effects on cash Iransfer payments. Although their measure is promising, its influence needs lo be rcplicalcd before it offers lirm support for the theory. Thus, systematic empirical evaluation of (he theory remains to he done. ~~ Working-class strength, social democracy theory Tne(thjrji theory shares the assumption of the dominant role of class conllict in capitalist societies hut differs from the monopoly capitalism theory in its view of Ihe relative power of the subordinale class. Where monopoly capitalism theory sees welfare spending as a means for capital lo maintain its dominant position (at least temporarily), the working-class strength theory sees wľlľjuy ^ppniľm^ as a reflection of the political power gained by workers. Although markets may pláce workers under the control of cTipilal. politics in democratic nations provides Ihe resources for workers to counteract, through social welfare spending. Ihe harmful effects of markets (Esping-Andersen, 1985a). Working-class political power rather than capitalist dominance of the economy thus becomes crucial for ihe growth of the welfare state. The major point of Ihe working-class strength or social democratic theory is well summarized by Shalev (1983:319): "the welfare stale is a class issue . . . its principal proponents and defenders are movements of Ihe working class." The welfare stale is an outcome of democratic class struggle, and levels of expenditures rellecl the balance of class forces in a society. The theory assumes. lirst of all. (hat ihe basic cleavage in society - between capital and the working class - is rellecled in political behavior (Korpi. 1983). In developed nations, parlies arc based on Ihe upper and lower classes, with low-income persons voting for the left and high-income persons voting for the right (Upset. 1904). Workers and capitalists are not the only relevant groups, and alliances wilh other groups may be necessary for electoral victory (Esping-Andersen, 1985a. 1985b). Yel. the group most important to Ihe growlh of Ihe welfare slate, ami Ihe source of power of leftist parties, is the working class. Secondly, il assumes lhal Ihe choices and actions of Ihe government and Ihe dominant parly define the characteristics of the welfare stale. Unlike other neo-Marxisl theories, this theory proposes thai the stale autonomously and substantially affects economic relations, and is not necessarily dominated or constrained by capital. The power of Ihe slate may be wrested from the capitalist class by workers through democratic means. Then Theoretical perspectives on the welfare state 35 social democratic or socialist parties that represent the working class dominate the government, and spending for social welfare is high. When dominated by rightist parlies that do not represent the working class, governments spend little for social welfare (Castles. 1982). The degree of working-class power, represented by the size and centralizalion of reformist labor unions, ihcn, determines whether or nol leftist parlies arc elecled and expand social welfare spending. In the economic sphere, since power depends on ownership of capital, labor occupies a subordinate position. However, labor can obtain power resources in the political sphere through organization of its relatively large numbers. Where unions arc organized, strong, and large, they can translate these resources into political power that can compete wilh and win over market power in Ihe class struggle for equality. Where union strength is fragmented and employers have more power, centrist and rightist parlies are elecled, governments are dominated by capital, and welfare spending is low. What. then, determines when unions will be centrally organized and able lo obtain political power? The underlying causes of working-class strength depend on ihe unique historical circumstances of nations. Stephens (1979) emphasizes thai small population size, late industrialization, and vulnerability to external economic forces lead lo a strong working class, but beyond this, working-class organization is treated exogenously. The social democratic arguments can be restated more broadly in terms of conllict over citizenship rights. Citizenship involves expansion of civil and political rights to include social rights to access to a tolerable standard of living (Marshall. I9d4: Zald. 1985). Social democratic theorists emphasize political eonflicfbver Ihe desires of classes lo tie income and.services to either labor force participation or citizenship rights (Masenleld et al.. 1987). The ability of the working class to rectify social inequalities through expansion of citizenship rights lo economic well-being and social inclusion Ihus depends on union organizational resources, the political power of social democratic parlies, and expanded welfare spending. The social democratic theory explicitly applies lo advanced industrial democracies. Political democracy anil economic development are necessary but not suflicieul conditions for growlh of Ihe welfare stale. Economic development creates a large working class and Ihe material basis for redistribution ol income: political democracy allows a large, organized working class lo gain political power. However, only when unions and lel'lisl parlies use these conditions to organize Ihe working class can they gain power, implement policies favorable to Ihe working class, and increase social welfare spending. Among ihe advanced industrial democracies, according to Korpi's (1983) Classification. Sweden. Austria, and Norway have had the highest union mobilization and the most stable 01 33 5566 �15457 71 14 36 Age, class, politics, and the welfare state leftist control of government, and have the highest social welfare spending and equality. Other nations with high union mobilization and occasional leftist control (Denmark, New Zealand, the United Kingdom, and Belgium) also have high spending and equality. Nations with low mobilization and exclusion of leftist control, such as Canada, the United Stales, and Ireland, have low welfare spending and equality. Other nations fall between these extremes. Even though all industrial nations may face the same functional demands, these national differences in working-class strength and political parly control determine how the demands arc met and what role spending plays in the processes. Although nearly all advocates of the social democratic arguments posit a direct, one-to-one relationship between the degree of leftist (or rightist) rule and the level or growth of welfare spending, some suggest that the relationship may be less simple. Hicks, Swank, and Ambuhl (1989) argue Ihi't the influence of leftist regimes varies, depending on the institutional strength of labor and the macroeconomic context. A strong union environment facilitates the realization of working-class demands in the form of leftist electoral programs, as it does the inllucnce of stalus-bascd groups such as the aged. Hence, the inlluencc of unions and leftist parties may occur only in combination rather than directly and addi- tively. The social democratic view of the consequences of social welfare spending on inequality follows straightforwardly from its view of the source and beneficiaries of welfare spending. Since welfare spending is supported by the disadvantaged working and lower classes who benelit from such expenditures, it must reduce inequality. One need only look al the lower income inequality and social democratic-controlled governments in Scandinavia, and compare them lo Ihe higher inequality and weaker labor parlies in the United Slates, Canada, and Japan, to see the benefits of the welfare state (Stephens, 1979). It is also clear from these arguments thai politics and political institutions independently inllucnce economic relations and the structure of rewards in society through implementation of progressive taxation policies, income transfers, and reduction of poverty and income inequality. In this sense, the slate is potentially autonomous of the capitalist class in capitalist societies. The state still responds to the structural characteristics of society, such as the organization of the working class, but is able to use political means lo create economic and class change. As Stephens (1979) argues, there is a political, democratic road to socialism. Mylcs (1984) applies the social democratic theory directly lo pensions anil Ihe aged. Public pensions may benefit the working class in several ways so as lo be consistent with the theory. Assuming that most workers receive little intrinsic satisfaction from their work, they would desire leisure if sufficient income were available lo afford it (Barlicld and Morgan. 1969; Bowen and Pincgan. I9f>9). Theoretical perspectives on the welfare state 37 Retirement is thus a desired status and a goal for which unions focus their collective bargaining efforts. This is consistent with (he strong causal effect of pension benelits on Ihe retirement decision found in studies of American men (Clark and Spengler. 1980). In addition, old-age pension contributions made by employers are a type of deferred wage. Other public pension contributions may come from general revenues and relied transfers of income through taxes. In cither case, public pensions - like private pensions - are a means for the working class lo raise their wages (Mylcs, 1984). Public pensions offer the additional advantages of stability and security in benelits that are not available from pri vale pension programs. Where private pensions may suffer from vesting or funding problems, government programs arc guaranteed (Schulz. 1980). ľor these reasons. Ihe growlh of public pensions can be accounted for by the same factors explaining Ihe growth of more general social welfare programs - namely. Ihe strength of working-class and social democratic parties. Critique. Critics of ihe social democratic theory point out that Marxist and neoMarxist theories fail to deal with ethnic, racial, religious, and cultural cleavages lhal cut across class boundaries (Parkin. 1979). Class may be only a subsidiary inlluencc on parly choice, less important than language or religious differences (Ujpharl. 1980: see also Kelley et al.. 1985. for evidence on the decline of class voting in (ileal Britain). liven if class position dominates electoral choice, it is not clear Ihat class -based policies can be directly implemented. Parkin's (1971) review of the evidence concludes thai European socialist programs have not hail clearly egalitarian results. To gain suppport. parlies may need lo move toward the cente,r and avoid adopting strong positions lhal offend large pails of Ihe electorate (Downs. 1957). ľor leftist parlies, their unionized constituency in most countries is too small to gain control of the government without alliance with other groups: these alliances, however, may require a compromise of social democratic ideals (Przeworski. 1985). liven if labor gains control, implementation of a program may be dil'licult or impossible in the face of a powerful minority bloc opposeil lo the program. Hence, lew differences may exist among parlies in terms of the programs implemented or Ihe effects of redistribution (Bollen and Jackmaii. 1985a). The class basis of political action and the egalitarian potential of class action may both be givally exaggerated by the social democratic thcon. The emphasis of class theories on the political aclion of labor and capital to ihe exclusion of oilier »roups active in the polities of the welfare stale may. in particular, slight Ihe aged. They may have interests thai do not coincide with those of cither the working or capitalist classes bul lhal may still be a major source of political pressure for higher welfare spending. Pensions in particular may be less sensitive lo class inlluencc than other expenditures, since Ihe con- 44 43 80 93 38 Af>e, class, politics, and the welfare stale nection between working-class interests and pensions - often seen as a middle-class program - is less clear than lor unemployment or occupational injury benelils. In fact, interests of the working class and the aged may diverge over pensions. Generational conflict over the tax burden required to support generous pension systems may separate the working class and the aged. Although the social democratic theory is right lo emphasize the role of politics, it may err in limiting its attention to class politics.. Despite these weaknesses, (he empirical literature shows slrong_juj]ipj^ lor the theory. Of the studies of working-class power in the eighteen or so most developed democracies, "nearly all agree that the strength of parliamentary socialism is more important for welfare stale development than other plausible influences'" (Sliafev, 1983:323). A list of studies that support the class arguments through various forms of cross-national, quantitative analyses includes Castles and McKinlay (1979). Castles (1982), Cameron (1978). DeViney (1983, 1984). Hspiug-Andcrsen (1981, 1985b), ľriedland and Sanders (198ft). Hewitt (1977). Ifibbs (1978). Hicks and Swank (1984). Korpi (1983). Stephens (1979). My les (1984), and Williamson and Weiss (1979). The studies differ in their measures of working-class strength: Some use leftist rule, some rightist rule, and others union density, union centralization, or strike activity. Yet, they all support ajncwj orthodoxy/that takes the validity of the class aruuments as proven (llollingsworlh and Hanneman. l982:Shalev. 1983). A weakness of these studies, however, is that they rely on approximately eighteen nations at one lime po'nl. Although the theory clearly delineates the nations to which it applies, the empirical tests of the theory truncate variation in development and age structure with their sample and discredit industrialism variables through analysis of data in which such factors are nearly constant, liven if sufficient variation did exist, reliable multivariate analysis is difficult with only eighteen cases. Support for working-class variables is often obtained without adequate controls for industrialism variables, particularly percent aged. To test the class theory, researchers need lo use multivariate techniques to examine the effects of all relevant variables on a sufficiently large sample with variation in both industrialism anil class variables. Lacking these methodological requirements, all the aforementioned studies may be suspect. Democracy and interest group politics Just as the social democratic theory may be seen as a political version of Marxist theoxics. the interest croup politics theory may be seen as a political ymioiioK industrialism theory. A brief statement of the theory comes fro in JanowiU ) (1976:75).: "The growth of the welfare slate since 1945 represents less.undJcKS Theoretical perspectives on the welfare slate 39 the influence of conceptualized goals - including class goals - and more and more the influence of the power of pressure-group politics reflecting the ordered segments of society.*' A general version of the theory has been applied to economic growth, government regulation, and various types of public spending, but a more specific version needs to be applied to the aged and social welfare spending. Whale ver llie version, the theory offers <5vtpessential propositions and empirical predictions that differ froni those of the other theories:/T) economic and demographic changes affect the structure of group resources and demands for welfare spending, and/fŽAhc existence of democratic political institutions lacil-itales the realization of group interests. The first proposition is that economic anil demographic changes have expanded group resources for collective political action and diversified group interests in the welfare stale. Nonclass ascriplive groups, in particular, have become crucial for government policy. In advanced industrial democracies, a general diversification of interests occurs as the economy becomes more specialized and universalistic (Lchner and Widmaier, 1983; Berry, 1984; Murrcll. 1984). This reduces the organizational potential of classes but provides a resource for collective action among groups defined by ascriplive characteristics (Nagel and Olzak. 1982: Nielsen, 1985). The retired and aged are a prime example of such a group: they have changed from a relatively small group identifying with families and local communities (Davis and van den Oever, 1981) lo a larger, high-voting, politically active group with common age-based interests (l;ox, 1981). The expansion of political rights and the incorporation of formerly excluded groups into the political system of advanced dcmocracjjMrfiicthcr contribute to the growth of groups'-competing for public resources (4auowitz,J97ft; Gronbjerg. 1977). This creates growing demands on (he slate from a variety of interest groups for higher welfare spending. It also implies the existence of a stratification system segmented by nonclass elements such as age. race, language, occupation, and region that transcend and fragment class boundaries (Parkin. 1979). The accumulation of interest groups in advanced industrial democracies is not only the result of economic diversification and political modernizalipn, it is the necessary result of the dynamics of collective action. Olson (1982) argues that since collective action is difficult lo organize, given the free-rider problem of group action, effective interest groups (or distributional coalitions, in Olson's terms) emerge slowly. The longer a nation offers a stable democratic environment, without upheaval or interruption, the more groups accumulate. Once groups exist. Olson argues, it is rational for Ihcm to act in their own interest rather than in ways (hat benefit the collective good: the rewards for special-interest activities are greater than those for actions on behalf of a collective good shared by all of society. I'urlhermore. the louic of collective action is such thai once promams 19 59 44 77 1 0889 40 Age, class, politics, and the welfare state benefiting interest groups arc implemented, there is little to be gained lor other groups by eliminating the programs and more lo be gained by advocating adoption oľ the group's own programs. Since one form ol' collective demand is for government programs, interest group action leads to escalating expenditures. The second proposition oľthc theory is that government spending results from competition for voles in democracies. Liberal democracies can be defined as institutionalized arrangements lor arriving at decisions by means ol' political struggles lor people's votes (Schumpeter, I975| I942|:269). The population seldom has a clear idea ol' political goals, voting instead on the basis ol' perfornianee-rclalcd criteria and economic sclC-intcrcst. Parties can be seen as loose coalitions designed lor the purpose ol' winning elections rather than formulating policies (Downs, 1957; Schlesinger. 1984). Under such arrangements, latent interest groups may be organized by political leaders, or existing groups of varying size and power may demand the support of their representatives for particular programs in return for their voles. Government spending is thus an inherently political process (Tulle, 1978) in which the collective political action of groups in stable democracies furthers their own interests. In these arguments, the central role given to voting in representative democracies stems from public choice models of politics. Public choice theorists, by assuming that person's are rational utility maximizes, depict voter choice as analogous lo market choice (Mueller, 1979; see Hechter, 1983, for other sociological applications). A huge literature has grown from this perspective thai investigates the behavior of sclf-inlcrcslcd groups (Buchanan and Tullock, 1980). voters (Downs, 1957), parlies (Schlesinger, 1984), and public bureaucracies (Niska-ncn. 1971). Applied lo the welfare state, public choice theory supplies a sei of underlying microlcvcl postulates about human behavior that imply the need to consider the government response lo voter demands for higher benefits. Lacking a concise label, we use the term interest group politics theory lo describe these arguments. Janowilz (1976) uses the name mass society theory lo emphasize the extension of political rights, but interest group politics theory may be more general because it emphasizes the collective action of a broad set of groups in the political process. An interest group can be defined as "an organized body ol' individuals who share some goals and who try lo influence public policy" (Berry. 1984:5). Similarly. Olson (19665:8) refers broadly to interest groups as individuals or firms thai have common interests and, at least lo some extent, share the benefits of concerted action lo gain political power. Such groups may effectively advance their interests through the formation of formal organizations and the employment of lobbyists. Yet, they may also influence public policy through voting patterns or other informal means. We use the term interest group Theoretical perspectives on the welfare state 41 in its broadest sense, and refer lo interest group theory, while recognizing thai there are diverse arguments that make up the broader theory.'' Although the interest group politics thcjjry is couched in general terms and may apply to a variety of groups, the ugccj descxyr sprrial aljr.ntion. Besides />-, being the prime beneficiary oi the largest welfare programs. J^vo-key changes - VV growing numbers and homogenizalion of interests - expand their political influence and illustrate how the interest group processes work. The obvious increase in the percentage of the population over age 65 is found in all developed nations, bul less obvious, and perhaps more important, is the greater increase in (he percentage of voters who are aged. For example, the percentage ol" aged voters rose lo 22.2 in Sweden in 1982 (Statistics Sweden. 1986) and to 32.5 in West Germany in 1984 (Slatistiches Bundesanl. 1986). liven if the aged do not vole as a single bloc, the threat of opposition by groups this large may sway the views and actions of legislators and candidates.7 The size of the aged population may also be used advantageously by more formal lobbying organizations for the aged. Smaller groups may generally enjoy disproportionate power because large groups lace greater problems in acting collectively (Olson, 1965. 1982). In Ihc United Slates, however, organizations of Ihc aged have been able to overcome the free-rider problem by offering selective incentives ol' insurance, travel, and pharmaceutical discounts with membership (Hudson, 1978). Their large membership can be mobilized against cuts in benefits or in favor of increased benefits or new programs. Through both voting turnout and effective lobbying, then, increasing numbers can translate into policies favorable lo (he aged." The second characteristic - homogenizalion of interests - results from changes iii: the,labor force status of the aged. Retirement makes the aged dependent on Ihc stale, and low fertility makes families less reliable sources of support. De-spile their diversity in status, location, and beliefs, nearly all aged persons benefit from increased public pension spending (Pampel. 1981). In fact, diverse group membership, including heavy representation of the middle class as well as the poor, offers a resource for collective action that can effectively be used when a group is united by common interests in government policy. A coherent, generalized ideology relevant lo all issues or a dominant, encompassing age identification are unnecessary when older persons are united with respect to their financial stake in specific government welfare policies. The implications of (he theory for the three classilicatory dimensions follow logically. The iiUcrcst |;r»up theory, like the social democratic llimrv lakes politics seriously. The state may act autonomously in ways that are harmful to the economy and opposed by capital or by the working class; it need not act in ways that meet the technological imperatives of industry or the needs of monop- ��:./.:+++D 7637 84 1 1 17 ■42 Age, class, politics, and the welfare stale oly capitalism. In fact, the state itself develops its own interests that may conflict with those oľ various economic groups (Skocpol, 1985b). The political demands of a variety of groups, perhaps including stale managers as well as the aged, classes, and state constituents, and the political processes by which these demands are negotiated, occupy a prominent place in the interest group theory. Unlike the social democratic theory, however, class conllidis not the only_jur dominant political force in (hc expansion of the social welfare state. Janowilz (1985) argues that stralilicalion includes dimensions of age, sex, and ethnic-racial-rcligious groups that interact in complex patterns; he uses the term ordered social segments to capture this complexity. Labor and capital are important pails of these social segments, but (hey do not subsume all oilier bases of stratification (Parkin, 1979). Instead, the welfare state responds to (he needs and demands of the increasingly large and specialized social segments, transcending class-based categories (Janowitz, 1985). Among the social segments, perhaps die most important for social welfare spending is the aged. Demographic changes in age structure must be considered (o explain adequately the levels of welfare spending. Like the monopoly capitalism theory, the inlerest group Ihcory claims lhal the welfare slate is not necessarily ^distributive - in fact, it may be harmful to the interests of the disadvantaged (Janowilz, 1985). Instead of being a mechanism to the needy, the welfare slale can be viewed as a mechanism for the relatively advantaged (drawn particularly from (he middle classes) to maintain (heir position. For the aged, retirement income in the United Slates has not been redislri-butivc (Buskin, 1986:38), and several authors have noted the discrepancy between funding for medical, disability, and pension benefits, much oľ which goes to the affluent aged (Crystal, 1982). and funding for poor children and single-parent, minority families (Preston. 1984). More generally, welfare spending advances political competition al the expense of economic competition as a source oľ social mobility. Yet, disadvantaged groups may have greater opportunity economically than politically (Olson, 1982): There is greater inequality in the opportunity to create and maintain powerful distributional coalitions than (here is in productive abilities. The poor, in particular, have difficulty organizing, and as a result often benefit less from welfare slale spending than do oilier organized inlerest groups (Al ford and Fried laud, 1975). Instead, government spending goes to more powerful groups, resulting in little tendency lor inequality to decline. A spiral oľ expenditures may weaken social regulation and the ability to nice! political goals (Janowilz, 1976), create an entitlement ethic (Bell, 1976). and slow economic growth and efficiency (Olson, 1982)." Rather than reduce inequality, welfare spending may be a consequence of lower inequality previously brought about by economic change. As educational Theoretical perspectives on the welfare stale 43 attainment and income arc equalized during industrialization, and as the middle classes grow, the population that stands to benefit from redistribution, is articulate enough to sponsor policies, and can mobilize necessary political power grows in size (Wildavsky, 1985). Accordingly, Pcltzman (1980) shows that historical increases and decreases in government spending in the United States, Great Britain, and Japan follow with a lag oľ several decades decreases and increases, respectively, in inequality. Income inequality has changed little since 1950 in advanced industrial democracies, but reductions before then created the conditions - a politicized middle class - to increase spending. Although the arguments of Pcltzman and Wildavsky apply to all government spending, they arc consistent with the arguments of the interest group theory concerning the aged - most of whom come from the middle class - for welfare spending. Rather than focus-iim on the extremes or income distribution, such as the poor or occupationally defined classes, and how benefits to these groups reduce inequality, the interest group theory considers the role oľ middle-income groups in welfare spending and maintenance of inequality (sec also de Tocquevillc, 1945:222: Mcltzer and Richard. 1981). Critique. Many claim that the interest group Ihcory is based primarily on cxag-geralcd. negative interpretations of current events (Thurow, 1981; Mishra. 1984: Skocpol. l9R5)."Th"FrnTaneial problems of the welfare state, the failure oľ many programs to live up to expectations, and the ungovernability oľ modern democracies have all been overstated. Moreover, the attack on the welľare stale may slem.,primarily from ideological beliefs and political goals. More dispassionate presentations of the theory and tests oľ its predictions are needed. Such empirical support lor (he interest group theory is only just emerging. Many case studies examine the inlluence oľ interest groups on legislative action (see Pratt. 1976. Ľslcs. 1979. or Williamson. Evans, and Powell. 1982. lor examples involving the aged). Yet, quantitative studies arc few. Clronbjerg's (1977) study of stales in the United Slates shows that expenditures for Aid lo Families with Dependent Children are explained by levels of political modernization and citizen political participation rather than financial need. Other single-nation studies show the inlluence oľ ethnic group mobilization on voting pallcrns (Ragin. 1979; Nielsen, 1980: Ol/.ak. 1982). Economists have related spending trends in the United Stales to trends in voter incentives lor transfers (Pcltzman. 1980; Borcherding. 1985; Mueller and Murrell. 1985: North. 1985). Particularly problematic in all these eľľoils, however, is measurement of the concepts. Aggregate, cross-national measures oľ interest groups and lobbying eliorls are oľ dubious validity and often can be interpreted as indicators of concepts from other theories. This suggests the need lor some different approaches lo testing the 7147963 00 05700� 04 01 63 15 44 Age, class, politics, and the welfare slate theory, such as examining the fucililalive impact of democratic politics on the relationship between various groups and welfare spending. Tests of other propositions of the theory - that economic development delcrr mines inequality, whereas wclľare spending has no effect - are more straightforward. However, here the evidence in support of the theory is mixed. The literature review of Danzigcr, Havcrman, and Plolnick (1981) shows benefits of welfare spending in the United Slates. Recent cross-national studies present evidence that economic development fails to predict inequality when controlling for economic dependency (Bornschicr and Chase-Dunn, 1985) or union strength and social democratic government incumbency (Stephens. 1979). This evidence is by no means complete, and suffers from the same methodological problems mentioned earlier, but the burden of empirical proof for (he interest group theory remains. /s ) Stale-centered theories In addition to the previous theories, which focus on the demand by societal groups and classes for spending, we can consider a set of less developed, supply-based theories of the welfare slate. Such theories do not offer a cleaify~.spccilicd set of logically related propositions that answer all three questions we have raised. They do, however, suggest a number of stale characteristics lhal may autonomously inllucncc the level of welfare spending regardless of external group demands. The statc-cenlercd theories may overlap in some ways with the demand-based theories: the interest group theory, for instance, views the slate bureaucracy as a set of organizations concerned with maximizing their budgets, just as any group desires to increase its benefits. Yet, (he interest group theory, as well as the others, attends primarily to demands of external groups on (he government. Here we focus on arguments strictly concerned with effects of state structure. "/ Milch of the work of the stale-centered approach, particularly that ol'Thcda /1 (Sjvocpofjiind colleagues (Skocpol. 1980; Skocpol and Ikenberry, 1983: Orloff ( / ati*#&ic^ol, 1984; Weir and Skocpol, 1985; Skocpol and Amenta, I98fi). stems from a historical, qualitative research tradition. Because stale characteristics must be studied in their historical and structural context, advocates of this approach avoid abstract generalizations thai apply to a large number of nations and quantitative measures (hat can be used in statistical analyses, Rather, much of the work in this tradition addresses the historical emergence of initial welfare legislation in (he early decades of the twentieth century. We note here the similarity oľSkocpoľs work to the state-based explanations of welfare spending from 1950 - N to 1980. but we cannot claim to offer a lest of her work. K,t ) Instead, we discuss live stale characteristics that others have found important V-•'' in quantitative studies of welľítl'C speiKllllg. I'lrsl^he centralization and corpora- Theorelical perspectives on the welfare stale 45 list organization of the state may expand the ability of state nianai?txrs to implement desired policies for social welfare spending (Wileusky, 1981). Opposition to welfare spending from dispersed and isolated factions can be more easily overcome where the government, union and corporate elite arc highly centralized. In fact. Mislua (1984) argues that problems of legitimacy and eflicacy of the welfare slate in nations such as the United Stales. Canada, and Great Britain result from the failure of these nations lo integrate the welfare slate into the economy. When considered as an integrated rather than a differentiated (or residual) part of the economy, social policy can be closely coordinated with economic management of both production and distribution, demand and supply (Wileusky and l.cbcaux. 1958). This requires cooperation, economic bargaining, and a centralized pluralism among capital, labor, and the stale. Given such a corporate structure, as exists in Sweden or Austria, a national consensus may emerge to implement welfare policies or increase spending without divisive conflict (Mislira. 1984). Several aspects of centralization may also be relevant lo an explanation H" welfare spending. Nations in which decision making is most concentrated in the central government rather than located in subnational and local governments should lie better able to minimize (he inllucncc of fragmented opposition and expand national welfare .spending (DeViney. 1983, 1984). Conversely, nations composed of federations of subualional units should show lower spending, finally, centralization of labor and business elites, and their coordination with stale managers (i.e.. corporatist organization), should also increase welfare spending (Wileusky. 197ft).1" ;Secoiui'. the bure^ujcnujc^^nudi^o ľ ii^ n ijiiixtra t i y ľ S* ť V P Ih.'.*!.!**. ..11 Ť" Y. _.' iT S ""*£ * li*ii sŕientlinii. Assuming that the goal ofgovcrnmeliíTnireaueracies is to expand "their budget, those with the most resources - employees, administrative budgets, powerful constituents - may best be able to reach their goals (DeViney. 1983). Thus, the power of stale welfare agencies, like that of external groups, must be studied^ J'hirdJ/lhc sjfllÜyjjüjJjMjJij^^ (Cameron. 1978). Nations iii which (Tie Tax"structure is hasednmiiarilv ondirect taxes and payroll deductions m;|y ('JMLlUyjOIIiliMlL^^^ wc^Í!LSinsilm»H^'1'1it1, Reliance on indirect laxes |l|''|JMfit,,j4a«ttiuĽ taxes and spending. (Vourlhyilic electoral cycle specilic to each nation may inllucncc the timing of spending (Tulle, 1978: Grillin and Leicht. 198ft). Tl»- pnlinc:il l^sjiif-s.s.jM.l'.T involves govĽimumUlllňlldiJll- as n .Stimulus, |o [ke economy shortly before an election in the J'""^!^!..^^"^! of economic growth wiljprcdispose voters toward the incumbents. The reasoning here is consistent with a i'lffilicTIUflce. interest group theory of government, but the timing of elections is often mandated lo 41 52227�21 8778 0353 1739 22 46 /4,i»ť, class, politics, and the welfare stale occur at spccilied limes or intervals. This constrains the liming oľ cyclical trends in spending and must be taken as an exogenous determinant oľ spending. finally), expenditures oľ stales lor compjMjnjjjjajgJUjjjs. primarily military_oncs, inayToiistranMKéTunTfs^ívälT^leTor'social welfare spcn3mg"ll revenues set some sort oľ upper limit lor spending, expenditures for social well are must compete with military expenditures ľor available funds. During.periods ol" war. priority may go to the military and we Hare spending may remain low. Some nations spend more ľor defense than others, because oľ historical and strategic reasons, and may spend less ľor social welfare. It is diľlieull to claim that one type oľ spending causes the other, but the potential Irade-oľľs are at least worth considering. Although nearly all these arguments and studies predict a direct iiilluence ol state characteristics, a more sophisticated reading of the stale literature may suggest an interactive argument. It may not be possible to determine a priori how state structures affect spending. Instead, stale capacity may increase the ability oľ nations to respond lo citizen demands rather than determining itselľ what these demands are (I'ampel and Stryker. 1989). This suggesls lhal stale characteristics may facilitate the iiilluence oľ demands oľ class and status groups. Hence, in addition lo the additive effects, the interactive eľľects oľ stale or supply laclors must be considered. In summary, this list oľ state characteristics hardly oilers an integrated theoretical argument that describes the workings oľ the slate apparatus. Despite the early developmental stale oľ (his perspective, Ihe ad hoc nature oľ these arguments still oilers something unique to the explanation oľ social welľare spending. Unlike the oilier theories, slate-centered theories predict the eľľects oľ state characteristics regardless oľ class or demographic structure. They locus less on the potential demands oľ constituent groups and more on the ability ol" stale managers to meet their own goals in dealing with external groups. As ľor the consequences of welľare spending on inequality, the effects ol" stale structure are unclear. For example, in Wilcnsky's (1976) conception oľ corporatism, cooperation among elites allows them lo implement programs that benefit the poor and reduce inequality. In Schniiller's (1982) conception, officially designated representatives of labor may come to accept the procapilalist interests oľ business and die stale ralher than those of their members. Corporatism may therefore not lead lo lower inequalily. The essence of die argument, then, concerns the determinants of welfare spending rather than die consequences. Summary The goal of this chapter has been to differentiate theories of Ihe welfare slate and draw oul predictions thai can be empirically tested. Our focus, therefore, has Theoretical perspectives on the welfare stale 47 been on arguments and theories that are amenable lo quantitative, cross-national analyses and that specify abstract propositions concerning the operation of economic, political, and social forces across nations. This limits die scope oľ our review somewhat, yel slili allows coverage of the major arguments and traditions . in the field of stratification. Accordingly, we offer a scheme that clarities, compare's, and contrasts Ihe theories, and thereby provides some organization lo Ihe lie'ld thai is currently lacking." A summary of the predictions is presented in "fable 2.1. Although each theory shares fundamental arguments with the others, they can be distinguished when studying welľare spending, equality, ami democratic politics together. Another way lo contrast the theories is to consider Ihe groups thai each treats Y'. as dominant in driving up welfare spending. The industrialism theory views the / f needs oľ the pootcsjjgrotips as most important, although alllneiubers oľ society \ benefit indirectly. The monopoly capitalism theory considers the other end oľ the ) stratification system - Ihe needs ol" Ihevcjipilalisiklass ľor slate support of capital I accumulation. The social democratic theory argues lhal the wajŕkin^cl.ass is the \ prime proponent and beneficiary of the welfare stale, and the interest group Ihe- \ ory argues Ihaljniddfe-incomc groups benefit the most.'-' finally, slale-ceulered theories sec all of diese groups as active, but dependent on the response oľeíale-s structures nud-managcxs-Air determining levels ol" welfare spending. Pul in this perspective, the theories need not be seen as exclusive or encompassing views of the welfare state. By considering the individual programs thai make up the welfare stale and the groups they may benefit, the theories may prove complementary, for example, social insurance programs for public pensions-and health care may favor Ihe aged and middle-income groups and support the nonclass theories: means-tested public assistance and unemployment spending may favor die poor and working classes and support class theories. In evaluating theories, we must consider the domain oľ programs to which each may best apply. All this discussion, however, is no more than an inlroducliou lo testing the theories. Il is necessary lo delve into the predictions of each theory for specific dependent variables in more detail. Willi basic arguments, assumptions, and supportive research presented and discussed, we can proceed with such el'lbrls. Ni>k\s 1. Il is iidi possible. of course. Id piucoiihole exactly nil ihc wink on Ihe welfare slate. Theory ami research may he seen as lying alonj! a cimlimiiiiii on Ihe three dimensions we have iilenlilieil. dillcrini! as.mtieh in emphasis as on liuulamenlal assumptions. Il is nonetheless useful to identity Ihe dimensions on which the theories differ and lo offer roujili pronpinjis of theory and research nIoii[! Ihe dimensions. Such calesiori/nlion orjiaiii/cs and simplilies a hewildciini: variety ol ideas that otherwise are dillicull to compare anil conliast. 2. Allcmpls to lesl Wai'tier's law over lime and within nations have nol ollcied snppoil lor the 00 73 8264 02 64 18 10 6�94 8024 05 52 51