Less Bad than its Reputation: Social Spending as a Proxy for Welfare Effort in Cross-national Studies

Abstract

The welfare state literature is characterized by a healthy methodological debate on how best to measure differences in welfare effort among advanced industrialized nations. Since Esping-Andersen noted that it is “difficult to imagine that anyone struggled for spending per se”, a consensus has emerged in the methodological community that spending data is a poor proxy of cross-national differences in welfare effort. Social spending is arguably only able to capture one element of welfare effort, namely the size of the budget, whereas entitlement criteria and benefit type are not adequately captured. This paper brings some needed nuance to this consensus. It argues that the existing methodological literature, which almost exclusively studies old-age pensions, sickness insurance and unemployment protection, has inferred its conclusions to all welfare programs. This is misguided because welfare programs like health care and education exhibit much less cross-national variation in either entitlement criteria or benefit type. When studying cross-national differences in the willingness of decision-makers to promote these kinds of programs, social spending is in fact the most adequate measure.