This article attempts to shed some light on the developments of welfare states in highly developed nations since World War Two (WW2) within the context of a narrative which seeks to combine institutional distinctions, termed “varieties of capitalism,” with the historical regimes of regulation theory in a political economy perspective which puts interested political actors at center stage. It will be argued that in a liberal democracy, the elite has the framing and agenda-setting power to “manufacture a political will” according to its interests. The welfare state is not the result of a long social struggle on the part of the needy; rather, it results in its general features from the minimal state of meritocratic exigencies. Under the very peculiar circumstances of the post-WW2 era, this even translated into a rise in social welfare spending to more than a third of national income. The particular design of welfare state organization was the subject-matter of political conflict, and a clear distinction between liberal and coordinated market economies can be attributed to cultural differences and institutional settings. Yet the core of the welfare state conception serves the interest of the meritocracy as much as those who benefit from social programs and redistribution. And the neoliberal attack on the welfare state since the 1980s is not a necessary re-calibration due to changing economic conditions or a growing lack of solidarity among the people but an expression of a modified cost–benefit analysis from the elite's perspective.
Allan, J., and L. Scruggs. 2004. “Political Partisanship and Welfare State Reform in Advanced Industrial Societies.” American Journal of Political Science 48 (3): 496–512.
Ameco Database. 2018. “Ameco Database.” Annual macro-economic database of the European Commission's Directorate General for Economic and Financial Affairs. https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases/macro-economic-database-ameco/ameco-database_en.
Bartels, L. M. 2008. Unequal Democracy: The Political Economy of the New Guilded Age. Princeton, NJ: Princeton University Press.
Best, H., and J. Higley. 2009. “Introduction: Democratic Elitism Reappraised.” Comparative Sociology 8 (2): 323–344.
Caminada, K., J. Wang, K. Goudswaard, and J. Wang. 2017. “Income Inequality and Fiscal Redistribution in 47 LIS Countries: 1967–2014.” Luxembourg Income Study (LIS) Working Paper Series No. 724, Luxembourg.
Castel, R. 1995. Les Metamorphoses de la question social: Une chronique du salariat [The Metamorphosis of the Social Question: A Chronical of the Workforce]. Paris: Fayard.
Causa, O., and M. Hermansen. 2018. “Income Redistribution through Taxes and Transfers across OECD Countries.” Luxembourg Income Study (LIS) Working Paper Series No. 729, Luxembourg.
Dahl, R. A. 1971. Polyarchy: Participation and Opposition. New Haven, CT: Yale University Press.
Dahl, R. A. 1989. Democracy and Its Critics. New Haven, CT: Yale University Press.
Dryzek, J., and R. E. Goodin. 1986. “Risk-Sharing and Social Justice: The Motivational Foundations of the Post-War Welfare State.” British Journal of Political Science 16 (1): 1–34.
Edlund, J., and A. Lindh. 2015. “The Democratic Class Struggle Revisited: The Welfare State, Social Cohesion and Political Conflict.” Acta Sociologica 58 (4): 311–328.
Elsässer, L., I. Rademacher, and A. Schäfer. 2015. “Cracks in the Foundations: Retrenchment in Advanced Welfare States.” Economic Sociology 16 (3): 4–16.
Esping-Andersen, G. 1990. The Three Worlds of Welfare Capitalism. London: Polity.
Estevez-Abe, M., T. Iversen, and D. Soskice. 2001. “Social Protection and the Formation of Skills: A Reinterpretation of the Welfare State.” In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, edited by A. Peter and D. Soskice, 145–183. Oxford: Oxford University Press.
Förster, M. F. 2000. “Trends and Driving Factors in Income Distribution and Poverty in the OECD area.” OECD Social Policies Studies Division, Labour Market and Social Policy Occasional Paper No. 42.
Frazer, D. 1984. The Evolution of the British Welfare State. Basingstoke: Red Globe Press.
Gillmor, D. 2004. We the Media: Grassroots Journalism by the People, for the People. Sebastopol, CA: O'Reilly Media.
Gilman, N. 2017. “The Cold War and the Welfare State.” The American Interest. https://www.the-american-interest.com/2017/12/04/cold-war-welfare-state.
Hall, P. A., and D. Soskice. 2001. “An Introduction to Varieties of Capitalism.” In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, edited by A. Peter and D. Soskice, 1–70. Oxford: Oxford University Press.
Hancké, B., M. Rhodes, and M. Thatcher, eds. 2007. Beyond Varieties of Capitalism: Conflict, Contradictions and Complementarities in the European Economy. Oxford: Oxford University Press.
Heise, A. 1997. Deregulation and Employment in Great Britain and Germany: Anglo-German Foundation Report. London: Anglo-German Foundation.
Heise, A. 2005. “German Social Democratic Economic Politics in the Light of Agenda Theory.” Intervention Journal of Economis 2 (2): 131–151.
Heise, A. 2008. “The Political Economy of Meritocracy: A Post-Kaleckian, Post-Olsonian Approach to Unemployment and Income Inequality in Modern Varieties of Capitalism.” Review of Radical Political Economics 40 (1): 67–88.
Heise, A., and Ö. Görmez Heise. 2013. “The Social Market Economy Revisited: The German Variety of Capitalism in Retrospect.” Izmir Review of Social Sciences 1 (1): 7–18.
Henry, J. F. 2018. “Reflections on the New Deal: The Vested Interests, Limits to Reform, and the Meaning of Liberal Democracy.” Levy Economics Institute Working Paper No. 905, Annadale-on-Hudson.
Houtman, D., P. Achterberg, and A. Derks. 2008. Farewell to the Leftist Working Class. New Brunswick, NJ: Routledge.
Huber, E., and J. D. Stephens. 2001. Development and Crisis of the Welfare State: Parties and Policies in Global Markets. Chicago, IL: University of Chicago Press.
Iversen, T., and D. Soskice. 2006. “Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More than Others.” American Political Science Review 100 (2): 165–181.
Jessop, B. 2004. “From the Welfare State to the Competition State.” In Die Europäische Union—Marionette oder Regisseur? [The European Union—Marionette or Director?], edited by P. Bauer and H. Voelzkow, 335–359. Wiesbaden: Springer VS.
Korpi, W. 1983. The Democratic Class Struggle. London: Routledge.
Korpi, W. 2006. “Power Resources and Employer-Centered Approaches in Explanations of Welfare States and Varieties of Capitalism: Protagonists, Consenters, and Antagonists.” World Politics 58 (2): 167–206.
Korpi, W., and J. Palme. 1998. “The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries.” American Sociological Review 63 (5): 661–687.
Korpi, W., and J. Palme. 2003. “New Politics and Class Politics in the Context of Austerity and Globalization: Welfare State Regress in 18 Countries, 1975–95.” American Political Science Review 97 (3): 425–446.
Lindert, P. H. 2004. Growing Public: Social Spending and Economic Growth since the Eighteenth Century, vol. 1—The Story. Cambridge: Cambridge University Press.
Lopez, M. 2013. “Elite Theory.” Sociopedia.isa. https://pdfs.semanticscholar.org/aa21/01a34819115e17384d08bf4ab573945dcfc3.pdf.
McCombs, M. 2005. “A Look at Agenda Setting: Past, Present, and Future.” Journalism Studies 6 (4): 543–557.
McCombs, M., and D. Shaw. 1972. “The Agenda-Setting Function of Mass Media.” Public Opinion Quarterly 36 (2): 176–187.
Meraz, S. 2009. “Is There an Elite Hold? Traditional Media to Social Media Agenda Setting Influence in Blog Networks.” Journal of Computer-Mediated Communication 14 (3): 682–707.
Merkel, W. 2001. “The Third Ways of Social Democracy.” In The Global Third Way Debate, edited by A. Giddens, 50–73. Cambridge: Blackwell.
Michel, E. 2014. “Radical Right and the Welfare State: The Electoral Relevance of Welfare Politics.” In Elections in Europe in Times of Crisis, edited by L. Bardi, H. Kriesi, and A. H. Trechsel, 167–185. San Domenico di Fiesole: European University Institute.
Mudde, C. 2004. “The Populist Zeitgeist.” Government and Opposition 39 (4): 542–563.
Obinger, H., and S. Lee. 2013. “The Cold War and the Welfare State in Divided Korea and Germany.” Journal of International and Comparative Social Policy 29 (3): 258–275.
Obinger, H., and C. Schmitt. 2018. “The Impact of the Second World War on Postwar Social Spending.” European Journal of Political Research 57 (2): 496–517.
OECD. 1985. “Social Expenditure 1960–1990: Problems of Growth and Control.” OECD Social Policy Studies. Paris: OECD.
OECD. 1994. Economic Surveys—United Kingdom. Paris: OECD.
Palley, T. 2018. “Re-theorizing the Welfare State and the Political Economy of Neoliberalism's War against It.” FMM Working Paper No. 16, Düsseldorf.
Pankoke, E. 1970. Sociale Bewegung—Sociale Frage—Sociale Politik. Grundfragen der deutschen Socialwissenschaft im 19. Jahrhundert [Social Movement—Social Question—Social: Fundamental Question of German Social Science in the 19th Century]. Stuttgart: Ernst Klett Verlag.
Persson, T., and G. Tabellini. 1999. “The Size and Scope of Government: Comparative Politics with Rational Politicians.” European Economic Review 43 (4–6): 699–735.
Persson, T., and G. Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, MA: Harvard University Press.
Piketty, T. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press.
Polanyi, K. 1944. The Great Transformation: The Political and Economic Origin of Our Time. Boston, MA: Beacon Press.
Pühringer, S., and W. Ötsch. 2018. “Neoliberalism and Right-Wing Populism: Conceptual Analogies.” Forum for Social Economics 47 (2): 193–203.
Riker, W. 1982. Liberalism against Populism. San Francisco, CA: Waveland Publ.
Schumpeter, J. A. 1976. Capitalism, Socialism and Democracy. 5th ed. London: Allen & Unwin.
Scruggs, L. 2006. “The Generosity of Social Insurance, 1971–2002.” Oxford Review of Economic Policy 22 (3): 349–364.
Soskice, D. 1990. “Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries.” Oxford Review of Economic Policy 6 (4): 36–61.
Swank, D., and H. G. Betz. 2003. “Globalization, the Welfare State and Right-Wing Populism in Western Europe.” Socio-Economic Review 1 (2): 215–245.
Taylor-Gooby, P. 2002. “The Silver Age of the Welfare State: Perspectives on Resilience.” Journal of Social Policy 31 (1): 597–621.
Tüselmann, H. J., F. McDonald, and A. Heise. 2003. “Employee Relations in German Multinationals in an Anglo-Saxon Setting: Toward a Germanic Version of the Anglo-Saxon Approach?” European Journal of Industrial Relations 9 (3): 327–350.
Veblen, T. 1919. The Vested Interests and the Common Man. New York: Huebsch.
Von Mises, L. (1922) 1932. Socialism: An Economic and Sociological Analysis. 2nd ed. Translated by J. Kahane. London: Jonathan Cape.
Wang, J., and K. Caminada. 2017. “Budget Incidence Fiscal Redistribution Dataset on Income Inequality” (Version 1, November 2017). Open Access at Leiden Law School/Economics/Data. https://www.universiteitleiden.nl/en/law/institute-for-tax-law-and-economics/economics/data-sets/leiden-lis-budget-incidence-fiscal-redistribution-dataset-on-income-inequality-for-47-lis-countries—1967–2014.
Wilensky, H. L. 1975. The Welfare State and Equality: Structural and Ideological Roots of Social Expenditure. Berkeley, CA: University of California Press.