Modern Social Welfare Systems

The modern social welfare systems largely in operation today are in mixed economies in western pseudo-capitalist countries and some south asian nations.


Although they all provide basic needs provision for the needy and poor, their degree of provision varies markedly from those using the benchmark of absolute poverty as a standard as compared to others which are closer to the benchmark of relative poverty. Other determining factors include natural resources, productivity, debt burden, governance and management. The contemporary social welfare system in operation today in western countries represents a compromise between the lassez faire version of capitalism and pure socialism.

Examples of countries where there is some form of a social welfare system is Norway, Germany, UK, USA and Malaysia. Their mode and degree of basic needs provision varies greatly.

The general outline and infrastructure of modern contemporary social welfare systems can be adopted and re-applied in developing & muslim countries providing they take into consideration the heritage, social, cultural & religious values of indigeneous populations.

The idea of the "welfare state" means different things in different countries.

  • An ideal model. The "welfare state" usually refers to an ideal model of provision, where the state accepts responsibility for the provision of comprehensive and universal welfare for its citizens.
  • State welfare. Some commentators use it to mean "welfare provided by the state". This is the main use in the USA.
  • Social protection. In many "welfare states", social protection is not delivered by the state at all, but by a combination of independent, voluntary and government services. These countries are still usually thought of as "welfare states".

Comparing welfare states
There are 5 main approaches to the comparison of welfare systems:

  • Comparison of policy, comparing the explicit terms in which actions are taken and it has been found that welfare in different countries often develops on similar lines.
  • Comparison of inputs. Inputs are the resources which go into welfare provision and the main determinants are the age of the system and the structure of the population.
  • Comparing production. Different states operate different kinds of rules and structures.
  • Comparing operations. This is done by considering the detailed operation of benefits and services - what they do, how they are paid for, and who runs them.
  • Comparing outcomes. The case can be made that what matters about welfare is not what is intended, nor what the process is, but whether or not people benefit from it. This is the basis of the work done by the Luxembourg Income Study in assessing and comparing social security systems in different countries.

The United Kingdom: the Welfare State
There are three principal elements :-

  • A guarantee of minimum standards, including a minimum income
  • Social protection in the event of insecurity
  • The provision of services at the best level possible

This has become identified, in practice, with the 'institutional' model of welfare: the key elements are social protection, and the provision of welfare services on the basis of right.

In practice, social welfare in the United Kingdom is very different from this ideal. Coverage is extensive, but benefits and services are delivered at a low level. The social protection provided is patchy, and services are tightly rationed.

Germany: the Social Market

The post-war German settlement was based on the idea of a 'social state', sometimes rendered as a 'social market economy'. The first, central principle was that economic development was the best way to achieve social welfare. The structure of social services had to reflect this priority. The principle is represented most clearly in the close relationship of services to people's position in the labour market. Social benefits are earnings-related, and those without work records may find they are not covered for important contingencies. Less clear, but probably even more important, is the general concern to ensure that public expenditure on welfare is directly compatible with the need for economic development and growth.

Second, the German economy, and the welfare system, developed through a corporatist structure. This principle was developed by Bismarck on the basis of existing mutual aid associations, and remained the basis for social protection subsequently. Social insurance, which covers the costs of health, some social care and much of the income maintenance system, is managed by a system of independent funds.

Third, there is a strong emphasis on the principle of "subsidiarity". This principle is taken in Germany to mean both that services should be decentralised or independently managed, and that the level of state intervention should be residual - that is, limited to circumstances which are not adequately covered in other ways. Higher earners are not covered by the main social insurance system, but are left to make their own arrangements.

France: Solidarity and insertion
Social protection in France is based on the principle of solidarity: the commitment is declared in the first article of the French Code of Social Security. The principle is used in a number of different senses. The idea seems, at first sight, to refer to co-operative mutual support. Some writers apply the term in relation to 'mutualist' groups (friendly societies) and emphasise that people insured within national schemes (les assurés sociaux) are called to contribute and benefit on an equal footing. Others stress that relationships of solidarity are based in interdependence. Solidarity is usually understood, in this context, in terms of common action, mutual responsibility and shared risks.

The pursuit of 'national solidarity' was undertaken in the first place by attempting progressively to extend the scope of existing solidarities, most notably through the creation of a 'régime général' for health and social security, and subsequently through its progressive expansion. Since the 1970s this pattern of solidarities has been supplemented by additional measures designed to bring 'excluded' people into the net. The most important of these measures is the Revenu Minimum d'Insertion (RMI), introduced in 1988, which combines a basic benefit with a personal contract for 'insertion' or social inclusion.

The French system of welfare is a complex, patchwork quilt of services. This kind of arrangement is relatively expensive, and much of the focus of social policy in recent years has fallen on the control of expenditure - filling 'the hole in the social', le trou de la Sécu. The main areas of concern are not dependency or unemployment, but pensions, because of the special privileges accorded to particular occupational groups, and spending on health care, where the stress on independent, market-led services (la médicine libérale) presents considerable problems in cost control.

Sweden: the Institutional-Redistributive model
The Swedish model can be seen as an ideal form of 'welfare state', offering institutional care in the sense that it offers universal minima to its citizens. It goes further than the British model in its commitment to social equality.

Titmuss's 'institutional-redistributive' model combines the principles of comprehensive social provision with egalitarianism. This is an "ideal type", rather than a description of reality. Social protection is not necessarily associated with equality; the French and German systems offer differential protection according to one's position in the labour market. The Swedish system, looked at in greater detail, has many of the same characteristics: Ringen describes the system as "selective by occupational experience". However, the importance of equality - sometimes identified with 'solidarity', in the sense of organised co-operation - is considerable. The model of this is the 'solidaristic wage policy' advocated by the labour movement, which emphasised improving standards, limited differentials, and redistribution.

The United States: a 'liberal' regime?

The United States is sometimes described as a ‘liberal' welfare regime, in the sense that it represents individualism, laissez-faire, residualism and a punitive view of poverty. These issues often seem to dominate US debates on welfare: examples are the introduction of 'workfare', the exclusion of long-term benefit dependents, and the criticism of the 'underclass'.

The US does not, however, have a unified welfare system. Federalism has meant that many important functions are held by the States, including public assistance, social care and various health schemes (Minnesota and Hawaii have state-funded health systems). By comparison with other developed countries, central government has had a limited role in social welfare provision: the main developments of federal provision were during the Roosevelt administration of the 1930s, which laid the foundations for the social security system, and the "War on Poverty" of the 1960s, which provided some important benefits (notably health care for people on low incomes) and engaged the federal government in a wide variety of projects and activities at local level.

In practice, the US is pluralistic, rather than liberal. There are significant departures from the residual model - e.g. state schooling, social insurance, or the Veterans' Administration, which provides health care for nearly 40 million people. In addition to federal and state activity, there are extensive private, mutualist and corporate interests in welfare provision. The resulting systems are complex (and expensive): the guiding principle is less one of consistent individualism than what Klass has called "decentralised social altruism".

International aspects of social policy
The social policy of the European Union
The European Community was founded for political and economic reasons. The central political aim was less European Union than the maintenance of peace in Europe. The principal economic aim was the establishment of a European free market. By contrast, there were no clear social aims; such social measures as there were followed from the pressures of economic policy. During the 1970s, the emphasis of Community social policy changed towards improving 'living and working conditions' in the community, and the idea of the 'worker' was extended to include those who were not part of the labour force. Once it was accepted that the Community had social objectives distinct from the economic objectives, it became possible to expand the role of the Community in social policy.

The powers of the Union have developed through incremental development of marginal, relatively innocuous measures in order to establish precedent and competence. For example, provisions covering cigarette packets, bus passes or language teaching sought to establish competence in relation to public health, old people, transport and education. This has been resisted through the idea of 'subsidiarity', by which action should always be taken at the lowest possible level.

The Commission's approach to the development of policy is based on the incremental development of services, the progressive expansion of solidarity, and the insertion of those who are excluded. Powers have been taken to deal with the problems of exclusion.

Social policy in developing countries

The central problem of the developing countries is poverty. According the World Bank, half the world's population lives on less than $2 a day. Poverty stems not just from a lack of resources, but from lack of entitlement: famines happen, not because there is not enough food, but because poor people are not allowed to eat the food that is there. It is a question of equitable distribution of existing resources not production.

Economic development is essential to welfare. It produces material goods. It promotes integration and interdependence, and extends people's entitlements. It has clearly beneficial effects on social welfare: the last 30-40 years have seen spectacular improvements in longevity, infant survival, access to basic amenities like water supplies and fuel, and the provision of services like health care and education. At the same time, development produces casualties. It makes poor people vulnerable; it uproots traditional lifestyles; it can lead to social polarisation. The 'structural adjustment' favoured by international organisations - moving developing countries towards a formal market economy - has been criticised for pushing developing countries into a situation where their poor will be unprotected.

Although economic development is fundamental, it does not guarantee social protection. Several countries have introduced social security schemes, often tied to the status of particular categories of workers. In some of these only a small minority receive effective protection, but a few countries have made considerable advances in covering their populations, often over a relatively short period of time.

Globalization and welfare
The development of a global economy has implications for national welfare policies. The nation state is being 'hollowed out', with power being dispersed to localities, independent organisations, and supra-national bodies (like NAFTA or the European Union). In contemporary globalization and welfare state policies, globalization limits the capacity of nation-states to act for social protection. Global trends have been associated with a strong neo-liberal ideology, promoting inequality and representing social protection as the source of 'rigidity' in the labour market. International organisations like the World Bank and International Monetary Fund have been selling a particular brand of economic and social policy to developing countries, and the countries of Eastern Europe, focused on limited government expenditure, selective social services and private provision.

Although there has been retrenchment in many countries, and an increased focus on selective social services, however, simulataneously, most developed countries have moved towards basic coverage of the costs of hospital care and more inclusive social protection policies. There has been a greater diversification of the basis of coverage, through a combination of governmental and non-governmental provisions. There is no consistent trend to greater inequality.

Tuesday, 23 May 2017  
26. Sha'aban 1438
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