How Welfare Regimes Generate and Erode Social Capital: The Impact of Underclass Phenomena

Abstract

The origins of social trust have been much discussed in recent years. This attention is understandable, as social trust is perceived to be a mechanism for overcoming the pri mary social problem highlighted by rational choice theory: how actors without mutual trust logically would choose a suboptimal solution (the prisoner's dilemma problem). Social trust is thus believed to be very important in solving collective problems, mak ing democracy work, and generating economic growth.1 In brief, everyone agrees that social trust is nice to have. However, its origins, creation, and in some countries erosion are up for discussion. Table 1 shows the empirical results of the World Values Surveys (WVS) conducted in the beginning (1990-1993) and the end (1999-2001) of the 1990s. As argued by Inglehart, economic development and religion have a huge impact. Therefore, this study is limited to the rich capitalist countries that share Christianity as a common cultural background.2 Furthermore, the countries will be categorized accord ing to Esping-Andersen's renowned distinction among liberal (Anglo-Saxon), conserva tive (continental European), and social democratic (Scandinavian) welfare regimes.3 The standard question for social trust (also labeled interpersonal or horizontal trust) has been used: Generally speaking, would you say that people can be or that you can't be too careful in dealing with people?. Table 1 reveals two major puzzles. The first is the striking level of horizontal trust in the social democratic regimes. In 1990 the share responding that most people can be trusted averaged 61 percent in these countries. In the nine conservative regimes, the average was 31 percent, whereas the average was 48 percent in the four liberal regimes. The distinctiveness of the social democratic regimes is even more remarkable in the lat est wave, where the average was 63 percent in the social democratic regimes as com pared to 29 percent in the conservative regimes and 38 percent in the liberal regimes. Regime patterns are not clearly present. At first sight, the distinction between conserva tive and liberal regimes does not appear to be of much relevance. However, one can not deny that the countries that Esping-Andersen grouped as social democratic welfare regimes distinguish themselves. The second, rather striking finding is that the dramatic erosion of social trust appears only in the countries Esping-Andersen labeled liberal welfare state regimes. The