Bringing Corporate Welfare In

Abstract

AbstractOne of the consequences of the post-2008 global economic crisis is that it has thrust into the public spotlight the issue of state provision for corporations, putting paid to the myth that capitalism and businesses could ultimately be more profitable, more efficient and more competitive without state interference and direct support. The reality is that corporations of every size and within every sector depend on government support in some way. Hence, while the measures taken by governments in response to the global crisis have been exceptional in their scale, they are not exceptional by design. Rather, direct and indirect state support to corporations – referred to here as corporate welfare – is commonplace and is deeply embedded within the state's operations with various forms of assistance being delivered through social policies. In such an environment, the fact that social policy has very little to say about ‘corporate welfare’ is a serious omission. Bringing corporate welfare into social policy analysis reinforces the potential defence of the welfare state and, at the same time, increases our understanding of how best to balance the needs of private businesses with those of citizens on the one hand, and the burden of paying for welfare on the other. To this end, this paper argues for a deeper recognition, understanding, consideration and embedding of corporate welfare in social policy analysis. The first half of the paper advances conceptually the analysis of corporate welfare, mapping corporate and social welfare along a continuum. The second half provides some empirical evidence of the relative size of corporate and social welfare provision in a number of OECD countries.