Political Parties and Social Policy Responses to Global Economic Crises: Constrained Partisanship in Mature Welfare States

Abstract

AbstractBased on empirical findings from a comparative study on welfare state responses to the four major economic shocks (the 1970s oil shocks, the early 1990s recession, the 2008 financial crisis) in four OECD countries, this article demonstrates that, in contrast to conventional wisdom, policy responses to global economic crises vary significantly across countries. What explains the cross-national and within-case variation in responses to crises? We discuss several potential causes of this pattern and argue that political parties and the party composition of governments can play a key role in shaping crisis responses, albeit in ways that go beyond traditional partisan theory. We show that the partisan conflict and the impact of parties are conditioned by existing welfare state configurations. In less generous welfare states, the party composition of governments plays a decisive role in shaping the direction of social policy change. By contrast, in more generous welfare states, i.e., those with highly developed automatic stabilisers, the overall direction of policy change is regularly not subject to debate. Political conflict in these welfare states rather concerns the extent to which expansion or retrenchment is necessary. Therefore, a clear-cut partisan impact can often not be shown.