Welfare Capitalism in Crisis: A Qualitative Comparative Analysis of Labour Market Policy Responses to the Great Recession

Abstract

Social policy responses to the recent economic crisis have varied considerably across advanced capitalist countries. This study aims to explain this cross-national diversity through a qualitative comparative analysis of labour market policy responses to the Great Recession across eighteen advanced welfare states. The results of the study suggest that theories of welfare state change that attribute theoretical centrality to political and institutional factors do not provide a compelling explanation for patterns of labour market reform observed since the onset of the economic crisis. Rather, they appear to be explained principally in terms of the variable fiscal capacity of the state. In particular, the study findings indicate that the presence of fiscal crisis has acted as a necessary (but insufficient) condition for the presence of recommodification, while the absence of fiscal crisis has acted as a sufficient (but unnecessary) condition for the absence of recommodification. These empirical developments suggest that there is a need for a scholarly return to the problematic relationship between capitalism and the welfare state.