Two - Two or three waves of welfare state transformation?

Summary

Introduction

Most comparative welfare state researchers divide the post-war era into two periods: a phase of construction and expansion, from 1945 to the mid-1970s; and one of consolidation and retrenchment, from the mid-1970s to the early years of the twenty-first century (Pierson, 2002). I wish to put forward an alternative periodisation by subdividing the post-war period until the early twenty-first century into three distinct phases of welfare state reconfiguration. These are: (1) the era of welfare state expansion and class compromise, starting at the end of World War II; (2) the period of welfare retrenchment and neoliberalism, which took shape in the wake of the oil shocks of the mid- to late-1970s; and (3) the more recent epoch since the mid-1990s in which social investment policy prescriptions took root. Each phase of welfare state development can be conceptualised as promoted by distinct policy expert advocacy, designed to effectively respond to impending socioeconomic challenges and to achieve shared policy objectives, supported by fairly robust political compromises. It should immediately be emphasised that no single country welfare transformation experience maps neatly onto the suggested three-stage developmental sequence. This applies all the more so to the social investment perspective. As Morel, Palier and Palme underline in Chapter One, the social investment perspective is an emerging, rather than a settle, paradigm. To date the social investment perspective has not been fully accepted as a hegemonic new welfare state paradigm on a par with Keynesian welfare state expansion and neoliberal social retrenchment. Moreover, its overall historical fate very much lies in the evolution of the precarious aftermath of the 2007–10 global financial crisis.

Moments of fundamental policy change are often associated with successive waves of economic adjustment. Especially deep economic crises provide important political windows for policy redirection. At such junctures, social policy redirection was often guided by economic and social policy analysis innovation, better able to respond to the predicament of the day. In the first phase after 1945, economic security transformed from ‘charity’ into a ‘right’ for which potentially every citizen was eligible.