THE UNIVERSAL WELFARE STATE AS A SOCIAL DILEMMA

Abstract

A major finding within comparative welfare state research is the differences in welfare state programs among the industrialized Western democracies. Contrary to most economic analysis, it is argued that many welfare state programs should be defined as public goods and thus be analysed within a `social dilemma' approach. A model is presented to show that if voters/taxpayers act out of self-interest, both a selective/minimal and an encompassing/universal welfare state are likely outcomes (i.e., a multiple equilibria situation). The different outcomes cannot be explained by the importance of the ideology of ruling political parties or by citizens in these different countries having different basic values about social justice. Rather, the argument is that the puzzle of structurally similar countries managing this social dilemma very differently can be solved by institutional theory, specified as the theory of contingent consent.