Redistribution and equality in the welfare state:

Abstract

One of the many vividly debated issues of the welfare state is that of its redistributive effects. Perhaps a majority of social scientists and economists believe that the welfare state makes a considerable effort to improve the lot of the poor and the worse-off more generally, at the expense of more well-to-do, joining Wilensky's conclusion that '. .. taxes and benefits taken together have a highly egalitarian effect on income distribution.' (Wilensky, 1975: 94). Some students in the field go even further and argue that the welfare state has actually broken the link between economic welfare and contributions made in the production system, thus causing strong work disincentives (Lindbeck, 1983: 227). For some scholars the welfare state is an important step towards democratic socialism, because it removes commodities from markets to be distributed politically and thereby changes the mechanisms and distributions of capitalism (Furniss and Tilton, 1977; Stephens, 1979, Esping-Andersen, 1980). Then there are those who claim that the welfare state is a failure. Its ability to diminish equality has been challenged: '. . . a growing body of academic work shows increasing disillusion with the achievements of state welfare and pessimism about its potential for achieving redistribution to those in need.' (Taylor-Gooby, 1982; quoted by O'Higgins, 1985b). Some even argue that the welfare state actually is as much for the rich as for the poor (Le Grand, 1982), and its ability to modify class relations has been seriously challenged (Westergaard and Resler, 1975, Westergaard, 1978). This review attempts to clarify the issue of the redistributive effects of the welfare state on equality by looking carefully at research findings and by examining the theoretical assumptions that have led to controversial interpretations. For this purpose, there are two types of study which are relevant. First, there is a diffuse group of studies focusing on welfare outcomes, both their development in time and their distribution. Welfare research and social indicators on health, education, housing, economic resources etc. have greatly improved our knowledge of the level and distribution of welfare in a society; but for our purpose the basic problem of the use of the welfare outcome studies is the difficulty of specifying the impact of the welfare state, since these outcomes are obviously an effect of a vast array of other factors as well. The second group of studies focuses on the welfare efforts of the state, or on the inputs it makes in order to influence welfare outcomes. These studies are similar enough to justify the notion of a 'redistribution research paradigm'. This review focuses on the presentation of this paradigm, examining its characteristics, findings and weaknesses, but in the end we come back to studies on welfare outcomes.