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The New Politics of the Welfare State$
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Paul Pierson

Print publication date: 2001

Print ISBN-13: 9780198297567

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198297564.001.0001

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Political Institutions and Welfare State Restructuring

Political Institutions and Welfare State Restructuring

The Impact of Institutions on Social Policy Change in Developed Democracies

(p.197) 7 Political Institutions and Welfare State Restructuring
The New Politics of the Welfare State

Duane Swank

Oxford University Press

The first of three chapters on the implications of electoral politics and the design of political institutions for welfare state adjustment. Swank first provides an overview of two key domestic and international pressures on developed welfare states: domestic fiscal stress and international capital mobility. He then outlines the theoretical argument that democratic institutions fundamentally determine government responses to domestic and international structural change, focusing on formal and informal institutions and drawing on and fusing insights from ‘power resources’ theory, the new institutionalism, and new cultural arguments about the determinants of social policy in advanced capitalist democracies. The next two sections utilize new data on social welfare effort, national political institutions, and internationalization to provide an econometric assessment of the social policy impacts of domestic fiscal stress and capital mobility during the period 1965 to 1995, looking first at the direct impacts of rises in public sector debt and in international capital mobility on social welfare provision, and second at the welfare state effects of fiscal stress and global capital flows across nationally and temporally divergent democratic institutional contexts; the initial focus is on total social welfare effort and then the analysis is shifted to changes in cash income maintenance and social services. The conclusion assesses the implications of the arguments and findings for the future course of social policy in developed democracies, and potentially bolsters the evidence for the central assertion that domestic institutions systematically determine the direction of welfare state restructuring.

Keywords:   capital mobility, capitalist democracies, cash income maintenance, democratic institutions, developed democracies, domestic institutions, electoral politics, fiscal stress, international capital mobility, internationalization, political institutions, public sector debt, social policy, social services, social welfare effort, social welfare provision, structural change, welfare state, welfare state reform

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