224
employees' salary increases commensurate to what had been set aside in previous private pensions agreements, which meant in the short run that the bourgeois parties were proved wrong in their predictions of stagnant real salaries and wages due to direct and indirect effects of ATP. In the longer run, theJnclusion_of white-collar.employees injhe ATP system broadened and.soliďifjed.the welfare state coalition.F^jrJYate, entrepreneurs \sQpn_ten(ied.4p fin^U.advantageous to join the ATP scheme tooľ ,| i    The extension of the revenue base by massive resort to employers' f j    contributions - the sole finance of ATP pensions for ,worke,rs^and H   empToyeěXH..anH indirect taxation created the financial1 means,and the 4    working class mobilization for occupational pensions for all manual ?i    workěr"šj)rovided the impetus and the political! clouťfor Swedisn welfare í    state ej^nsjt£nľThé dynamic was sustained and kept up for two^aecahes 8 » owíílgtoat leaSt three important expTarititory forces. '*'     One had to do with the resounding political victory with which the whole process had started and the very large part of the population "'/ cfireqtlv bengh^fl^fxojcn.jt. Against such a background,.,irwas unlikely that all three rival bourgeois parties woijld come round to a common anti-w.eifa.re position. They have not done so to this day, and the frontal opposition of each party by itself is futile, given the size of Social Democracy. It is in this political context that the rapid ageing of the *-j Swedish populatiqn^must be seen, with concomitanC.SQc{|!ffl^h.ts and cajrglfle£4&^ftfc..^delr^The ATP system went into effect in 19.60 and the first pensions were paid out in 1963. Then there were 16,000, in 1970, 393,000, and in 1980, 1,227,000 (Olsson, 1987, p. 56), and by the beginning of the  financial year  1987—88  they amounted  to about 1,700,000 (Finansdepartemcntct, 1988, p. 151).
The third explanatory force is the mode of finance. ATP is a funded. insurance scheme and is therefore capable of running into deficit and
calling.....forth   restraining^ mechanisms.   D chate   about   its   long-term
viability has started, but so far eyehtualproblems have been located in the next millennium. tnereby,.as. yet, inciting nb political action. The rest of Swedish social insurance is clc facto not based on insuranc^jaxlnaples and has, therefore, like the Dutch, a cost-led expánsionajyj^yjiajiúc with révenue5''adápfědTo"'čo'vércbsts. But tlľe'SweTrish^wbifare state also has another, more particular financial dynamic. That is the provinces (íatidstiuíň and the municipalities, both with important income taxing rjovyyg, The provinces run most of the c<)untry s health care, and the municipalities provide child daycare, non-medical care for the elderly, a wide supply of leisure facilities, social assistance, public housing and housing..subsidies. Under tight central supervision and with central money the latter also administer the comprehensive school system. Local djrecX teľjtejs. h.a^                                               pnbHc revenue, from 19
per cent in 1962 tn 26 ttt ri-nr in losn ■.:.;;.  i..           ., ,;.,n ,,r ,-rr>r™\
V
'pillařižation' and 'popyLAii .\i()yki,|.-.,yiV                225
direct taxes has gone down from 26 per cient to 12 pej" \i\}\\[ jji thl' same period (Olsson, 1987, p. 53). Outof totaj public c.xj]ej1djtijre, provinces jand municipalities have increased their sharb frqiri jj pur cent Í0 1960 to !56 per cent in 1980 (Olsson, 1987, p. 14)i ^ average Swedish municipality is rather big. A forced rrierger ill the pat1!)' 1970s brought the number down to 278, the norm being that hope sjiptllt) hitve fewer than 8000 inhabitants. The immediate reason foj' that nutili was the recruitment tq a full Comprehensive schrjp) sy.stetij, nut an important implication is a relatively large tax b4se upbn'whicji to hiiild ah extensive municipal apparatus.
Sweden has 23 provinces (and the citibs of Gfjthehbíirg ntld Mnlmo and the island of Gotland, in which cases the irklnicipaljly also has provincial, competence). The overwhelming pah of ff|ejť tilsk consists of health care administration, for which they pay by leyyljig u n inculne tax. He'áTth care has expanded and become tmutpifJusly innre expensive everywhere. Swedish health care administration fycüH l11(.|ph Je.HK financial restraint than in most other countries, ho\Vöyeri f?fr,y||ie||i| electiops take place on the same day as municipal and parljíjrpP!lUiľy opes, and lew citizens pay much attention to provincial polities. Jji f( jjc-peroj 4fť|ti|li|,ee of welfare state cxp4nsion, this tends tp foster pi'pVlflt-'lil! cx|ii|ps|lil1
without much concern. Second td the U&A (with jifj niiijil up) -Sweden has the most expensive health care .svs}tíh/| |r (OECD,  1985, pp.  li, 31, 32). Ldtirgedis ajK! ^|^|j provinces have increased their expenditure at b4f{ii:i.||y tjfe k; the perio^ 1960-80, controlling for cjernogH}phic Kjftlblfil'jJ it (Therborn, 1987b, p. 41).
ij'ivti|e .net-ihf-' Wif|}| )b|il<|cTij||e the |1í|ľľ Iri lid nis-htl^
nfcuti} t<>
Market Voice anrJ Marker. Exit; Tvvb jSj Market Loyalty
The extensive and socially arnbitioüs polities in SsVet|eli atld the Netherlands coexist, as we rioted in th,e first Heetioj), with Vigorous private capital accumulation. However, thjiJ coj"iilbilj.t|ti||nf plib|l|.' sector and _private markets is not wjthqijt problems^ It n|||H I'lf itK'jhlH (jf accommodating statej capital, arid lahou£. M'HIs chjUHtijin |,s ultířjHíuult witn" theoretically by*invokThg^orpT)nuisft\), otj iyfjli-'ll (Sweden rtlUl t|ie Netherlands both score 'strong'(L'ehHiptlich, ldfj^ |1. of|} Oj' 'IliitlV (Schmitter, 1981, p. 297). Occasionally, the t\vd cjjnp[tien \}\± L||.|üjitiUlveiy differentiated among those wft;h a heavy d|isj: tjf tlil'hHhttlfhl! tlie Netherlands as iiberal__corporatist', haying stj-orjjJf b|ipita| ittHl We^k labour, and Sweden, having both strong labptjr dtld eiipilal, ifs being 'sociaľ aswclfas 'lihemf :.•;;':•;v)r:.ŕi:ir, (Kat/.tírilj|Ľ|(n  1ÓHS, |l.  W). IH
1           ''    •    '    •  >iU.....----- f 1 n. i 111 r    üiil llv 'liliľľ:lt
corporatisť characterization of the Netherlands rather misleading. To           n
seěSwcden as libcrally-cum-socially corporatisť is móre äptj'b'üfit is hot          -| i
a very fruitful base of comparison with the Netherlands. Instead, the
"suggestive distinction by Albert llirschmann (1970) of exit, voice, and
•loyalty seems more promising. The public policies of Sweden as well as
of the Netherlands have developed on the basis of a fundamental loyalty
to the capitalist market economy;. But on that common Basis the. two
; cóTintnVs luťve jdjUM^                                                                          to
»important   non-market prijicjpj&s,, of pubjic  policy-making.   It  is*in
'captu'riiig the core  of these  modes  that I lirschmann's distinction is
helpful. The Swedish manner of bringing markets and public policy
goals intiTviable coexistence is to regulate who may speak in the markets,
af what pitch, and at what time, and to raise a strong state voice in the
marka. The Dutch mode, on the other hand, is to provide, to organize,
or to facilitate exits from markets. The Swedish public authorities are
anxious not to leave the marketplace to the free marketeers, and the
Dutch to keep the public voice low or quiet. Metaphors aside, what is
meant is that Swedish public policy is oriented towards regulating the
parameters ofmarket action and to intervention in the market, while the
liutch concchTratélVn public adaptation or compensation for the market.
Differences are not pure and absolute, but are ones of emphasis.
Contrary to what the 'liberal corporatisť label suggests, the latter may
turn out more subversive of liberal market rationality than the former
kind of policy.
two key markets are the money and the labour markets. The former was crucial to the distinctive crisis policies of Swede^ and the Netherlands in the 19.30s as well as in the 1970s and 1980s, the second to social reform as well as to crisis policies in both nations. From the          ,||
money market, there is no real exit for a capitalist country, but the extent         ' * 1
to which the option is for voice or loyalty very strongly affects the burden upon exit or voice in the labour market.
'M
r!3j
" íl
•s
Metnu: or end? The national currency on the world market
With regard to their currency policies, Sweden and the Netherlands maintained policy continuation in the crises of 1929 and of 1973. The Swedes devalued their currency unashamedly in both crises. In 1931 Sweden immediately followed the British off gold, and also devalued against the pound. In the 1970s Sweden undertook a series of devaluations for reasons of external adjustment and then, as the initial move of the Social Democrats back in office, in 1982 a 16 per cent competitive devaluation. Over the period of international 'stagflation' from 1973 to 1985, among comparable developed economies qnly Australia, Italy and New Zealand devalued their currency more than
Sweden's 2b.5 per cent. ThcJJutch, on the otHtJ-.ftjihdf revalued their currency by 26.4 per cent, surpassed only by Swlbenahcj, Japan and Germany (OECD, 1987b, p. 109). In the 1930s tile Netherlands Wits part of the 'Gold Bloc', the smajl group of countries sticking to the gold standard, after Britain, and others with her, h4d ábilijduncd it, Only In September 1936, a year after Belgium, and alter the Fiehch, and In view of impending Swiss defection did the Dutch authorities go off gold,
The effects of the currency option chosen weit' the siime in both crises: alleviating the pressure of international donjb.eHtiun find creating more .room.for' "domestic expansion in Sweden, Increasing external pressure in the Netherlands, llbwevei, the immed}a|ü reasons for the national choice'seem-to' have b'ciert lather different in1 tile fWO crises, The Swedish 1931 devaluation was a swift adaptation to Hew Market conditions, a consensual step following the lead of the country's major trading partner (lylyrdal, 1931). But the 1982 one was part of an offensive move by the new Social Democratic government, Dutch resistance to the British example in the 1930S Vyqs ap assertion of monetary independence, although with the de fach meaning of doing nothing - while at the same tinie t explicitly pillipg fbf ň policy of 'adaptation' at home (v. Oenen, 1982, ch. Viji íh fte 1970s and 1980s, on the other hand, the hard guilder policy iny^lýeií äft ä^btatipn fo the German mark and to French needs of Veiled fri^G dfeyfdpátloh,
Common to the national options, hi bptjt tMspSf hbWPVeři Was ä characteristic conception of the currency. In SvV^dßhi tile currency was in both cases seen as an instrument for achieving' ötids of international competitiveness. When the end was endäpgeret},- appropriate means had to be adopted and the public authorities híjd td Intervene ip the market. To the decisive Dutch actors the currency had 4fl intrinsic Value, In the 1930s gold-standard orthodoxy was defehded trj> arguments SUch as that of the President of the Nederlandse Bank that <fj[t ipre no Counterfeiters' (v. Oenen 1982, p. 250), Prime Müiisier Ödlijp and the Finance Ministers of the period held the sanjc vicAy, In the recent crisis, the hard currency, no foreign lo&n policy (in sjiifjä pf rhput1(ting public deficits) is justified by the assertion that art easy currency and öKteWal loans Would entail beggaring qne's neighbour (National Ijartjt President Duisenberg in an interview).The Dutch National Bank, although rtpt constitutionally sovereign in the manner of the Bundesbank (cf; pjl. $ thijä volume), is more autonomous ahd prestigious iri relatipn tp jiiji goy^fiimčnt thiín the Swedish National Bank. In this case, hjcjweyer, th^ j^sJiWjrt of fj specific1 institution seems less a policy cause than tjie éffgtíj: Of á policy COftc.'$ with a broader social base. In bqth Crises, jnqr^JÉjfý pjříjjp^xy tijtS; embraced by political leaders 4s well as by the p$m\
It seems tliat the basic reason i"r fh'ese f|ifM^| tí(í|)p!Hí?l ítíodefi of_reJ_ating to tjfe~ currency market is,' the ~"t^§ t||*! Ca{l(wi|siri(  Ařf
UJll l«.lj     U11U     U i l.
t í
V
o
\\
ľ
I' i I
í currency tends to be regarded as a means to indus"tnál~uttěrnational competitiveness. Dujch capitalism, on'trie'otficr hand, is traditřdňaíly měFčanule and cplonia!; largely rentier in the eigtheenth century, and in motlern limes with powerful private banks and international financial operators, all involving key actors for whqm tJh.evcurrency.t(:nds to acquire a value in itself. An instrumental view of fhc currency is conducive to 'S^^S^ŮuiJrJo.raisingwm.eJs^vmce in the market; an intrinsic respect.for the currency is a market lovaltv which necessitates a more extensive exit or louder voice in other markets.
'Parlies' ami 'partners''-- lipo kinds of institutionalized industrial relations
Prevailing language is symptomatic of social relations. In die Netherlands, unions and employers are 'social partners'. In Sweden they are 'the PiUliiiäJiiliii^,JiiJl(JJit.m.y.rkct'. P^rtnejshipconstituj^ rivalrvi.partisanship an organization, pfjL
The Dutch conception derives from Catholic and, Calvinist conceptions of social ordering. It culminated in the post-Second World War process         ;, li ľ
of labour market institutionalization. In order to understand the Dutch        I'll confessional   idea,   the   English   reader   should   be   reminded   of a        |j^
Continental European legal distinction between public and private law.         ' tj
The former pertains to the state and to the general public order, the         <jjj
lauer to relations between members of civil society. Continental European law gives special weight to and provides special procedures for public law. The^Business^Organizationjk-t of 1950, which was the instrument of labour market insüFutionalizatjon, was a public law regulation of business. A Socio JĽamonnc Council of representatives of capital, labour and 'the CrownHin effect, thcTnajor political parties via senior academics) was installed as an official advisory bpdy .to the Cabinet and as the top organ of branch-specific organizations of capital and labour. The latter were to constitute a public ordering of private enterprise and of capital-labour relations. The intention was twofold: to supersede capital-labour conflict and to mitigate goods market competition. In fact, the market reasserted itself against corporatist . .. organization with the momentum of the postwar boom and only the '!/*' advisory body actually materialized. Another possible exit from the j t \ market set-up, but never really opened, was the cstablishnient in 1947 of a Central Plan Bureau, originally as the chief agency for managing what was going to be a 'guided economy'. The Catholic politicians clipped its wings from the beginning, although they were crjJcial to bringing it about at all, as had also been the case with the Public Law Ordering of Business. The Plan Bureau became an influential body for sophisticated econometric modelling of an increasingly liberal prientation, but in no
:f
M H
h
atiiat an ageing  ui  ciunuiitif- planning  y>ee lliri|Hjr DOni CI 31,,   iVöi,
pp. 229ff. and Beld, 1979).
More powerful was the Collegium ofýjMatidhlíl .Mediators, the government-appointed ímplementers of the 'gtliqeq WŔge, policy > the cornerstone of Dutch macroecqnpíhič p'pücy ^ftet the war, effectively determining post-war wages until did 'mid |§60j3. The guided wage policy originally had broad support and \yas cq^sideißd a key Instrument of post-war reconstruction, and industriálizadorj, Cqrifess|orta| as Well as Social Democratic political forces saw H ¥ W fttjttkfy means of reordering of the economy. Vyhen it came qhd^jj ^'eigtlre, it W» first abandoned by the employers, then by the gjijfijp^friij Hjiitjtf0< The •Social Democratic unions defended it to the eji^' jrjegi^rjj* h f$ uHe best available means to wage equalisation (Huetihja; tej: a}., J9,$á( fjpj, $39JTt)' P'ajtp.Lthisjpost-war policy was a dejhetb ^dp^hÚm^WÉš^iQttly j.ft the late 1960s did, this become obsolete"]oírp^^^íí'lB|^p^^Ht(řÍí#^!t ifl tf relegaiizatiqn had beeh expressed by the coňf^ÉJcjfítii, %p|fll Péjt)oeiŕatie Cals coalition government in 196/}, qrid ^bbi|Étíf jjt}pj}ttf$t| by official advice from the Socio-Economic Council |n 1968.
Employee rights, most recently expressed in the Enterprise Cqtlticlls Act^rT979'"conFémng'^ On coiincils ejeißteirby aTl'TrHpTó*ýe*eb, w1fěW«Muníonízed br nót, provide paths outside ttte rnajŕket. Appeals may be made to the Amsterdam1 Court of Justice pvef enteipľiše "decisions, and'TEč^rätei^nsXcpuTicil'hás the riglit to veto a nomination to the Board"of Directors, with the Socio-Economic Council having the final wordjsee further the standard woik by Wlndmtiller et al., 1983 and TeuHngs, 1981),
The Swedish system of ihtlustriaj relatíqt|^ áiieged *0OrtliprätÍsť commonality notwithstanding, is a mirrqr írhíjge iff $Íä í^$rj' W^dotlt of the labour market' is cohceived as 4 furi^Pfltój de^qphltó figHt. Although practised sotto voce, 'incomes fiolicryJ js äjjlj bfflPÍ|jly (WO* 4Ht) the Dutch notion of a 'guided wage policy' tybtlm % pHMj&h hjiVC connotations similar tp 'gujiled derhpcrácy\ Sihtjti J 936 % the JlíNk' se£^3.smce.l9^5in.tjn.c.pu^liic.Sccto'r, the 1^ J^H'i,'^M^řaht^'^9_.tJ^Jt^^t ,' tocoíiective bargaining, .and With barg>jnihg;.,t^<ÄtÍ[iÄ^ŕtid'jg,. lockout is explicitly recognized. Conflict rights jf) tije RL|bIicseetor are more extensive in Sweden diap in itipst cpUntH^t ŤHe confiictual principle is underlined by the Swedish 1974döWtittiti on s guatíittteeing the right to lock out as well as the right {o spftffl vfW> \1)< Tfiese rights are severely regulated, howeyer. According, ^Jip^sjft.HOSÍHB?iS1lPd in 1928, onjxwjhjy^y^k^^
is^a^á^^MUoftM^tó^ 7'e   B^^ifei jA^ě^iTient* between the
confederations of employers and of trade; üriiöt|pi„,in..l938.lal^t}ie basis fóř^osT-war''mstit^übnälizatibn of cpÚ^cti^Ě^^^j^$iJJ^^^Ě^' atiöns öf émbiqyérs as^ÄetiJis of Workers,,4ftÄ.fetlißlbyeeS aře^nublTcly... ■
aaivi u__uu_, lij y ■ ■__yi/jiJivy1Jii/,^v,^,v,,«.4'iv»wj,.".ylHyv.t'.v;','.,'',:.:.,', ■.,"»'/-V,  &""ľ"''"'""'"
proposals, hut the organizations are asked separately, without any machinery whatsoeveŕfor atterhpting to create consensus. In contrast to their Dutch counterparts, the Swedish Sociál Democrats have not set up a Plan Bureau. The Ministry of Finance has always been the key economic policy-making body of Swedish Social Democracy. A succession of long-lived, popular as well as powerful Social Democratic Finance Ministers — Ernst Wigforss, Gunnar Sträng, Kjell-OIof Feidt - have all catered to the sound functioning of markets, while themselves skilfully and tnnovatively acting on them.
Under Social Democratic auspices, government policy towards industrial relations has largely been to provide á legal voice for the unions. I.'.arly post-war investigations into a general unemployment insTiŕä'ncc were finally buried because the unions wanted publicly financed union-run insurance instead (sec further Therborn, 1986a). In the 1950s and the 1960s neither the unions nor the employers wanted any government interference in industrial relations. The trade union economists Gösta Rehn and Rudolf Meidner developed a new labour market model in order to cope with macroecqnomic pianagement under conditions of full employment in which, instead of intervening in the wage-bargaining process, the government should stiffen employer resistance to wage increases by high taxation. For reasons of equality as well as of labour rationality', the unions should pursue a centralized 'solidaristic wage policy' aimed at reducing differentials between enterprises and industries. (The unitary Swedish trade union movement with its high organizational density could realistically hope to achieve wages, equalization by centralized market bargaining without having recourse to the state in the manner of the divided and pillarized Dutch trade unions.) To the extent that such a policy tended to result in unemployment because of lay-offs from low productivity enterprises, public measures should support and stimulate labour mpbility into high productivity areas. (For an interesting autobiographical account of the development of, and of the political fight for, this model, see Rehn, 1977.)
In the 1970s Swedish unions changed {heir minds about labour legislation. In the first half of the 1970s there ensued a spate of legislation on employee (read union) representation on the board of directors, on employment protection, on the work environment and on cp-detenninatipn. The character of the legislation is in a sense summed up in the latter whjch gives the plant level unions the right to be infprmed and to bargain about all decisions of the enterprise, and the public authority,.employer.
Í It does not provide for any consensus-making council. Bargaining between two labour market actors is the key content, and the '.law provides additional resources, in the form of legal rights, to the weaker
l"!.;..,i....1.1.'...1.,.',.v- ."""'".'...!"'".,v\'> »'"■'  i'^^'t'!',!;.)   i'VHf'i^T'.'  "'•   >^"|::■.'J~<■' including political bodies - Who takc^ íhajpf- d^pjs^ns Wjtl^f jjriqr bärgainir^,lipw;ve!r, after all bargaining, a^Ji^i|d hf {hi? flfljjŕj fté ernjDl^erjdccjd^                                                                                      |
the market are lejft intact, but the position cif" ^Q^Ůfi Is' ^plŽíOř^Tlifce
fürther Schiller et al, 1987).           .....'    ''
The relative effects of these policy emphascjs qlft log«}} fjjfifs ftbftt and legal voice in the labour market are hard tp assess- Öivfcft. tpö Vast superiority of votes and of industrial rhuscle jlf the Swedish labour movement, the most noteworthy feature is thatjtlje/ ^jipjžřiqrity qf benefits to Swedish workers i^ not at all cleafrCqt. Thefe) jif^ Potain; c|eftt4řlds made by the Dutch unions which the Swedesj íj$tt8 ftjiV|3 beeh al)|e to realize: a legal occupational pensions system fpi' äjí ^tjfjce^j á fjbftre in the accumulation of capital, The ATjP1 šchetój? !|| 'jáff^f. froth; }946Q realised the former, the wage earners' funt$ lßg|ä||| Ipft qf P^pßfiipöf 1983 the second, while similar Ďuttíh demand ,!|fj ^ 19//^ CNÖ tq nothing. Swedish safety stewards have the leg^l M^lif 'f# sfŕjp w;t)í/|{ wlfich they consider dangerous. On the other hand( tji<* M$£ ÉjdOjftJ ehtiditiqns for workers as for employees were established iff q!g fc^tcli enterprises in the 1960s (I am here indebted to S. StdOp)j' ptjf are qpt yet 4 fact in Sweden (which also has strong white-rcpíjpť hhiöfiS). Most Dutch workers receive 100 per cent sick payment, 80 pjjft c$nt py íí*W Wíd the rest by collective agreement, whereas tl^ first slcjifyßss; Wage agreements for manual workers in Sweden were corjeludec) Mtofly 1988, The Dutch had a serious industrial and political conflict abqljt flfl attempt to do away with that right in 1981-2, a conflict won by thg talons, Since the 1965 Philips agreement, Dutch workers have jhdexpd Wagest á demand only obliquely raised by Swedish lihions and always nťrnly rejected by the employers, sin terms of real wages, Swedish Workers have been the" 1 OECĎ losersln tJhe.1973-85 crisis, VviqVzero"jhéreäse 'in íeal hourly í earnings. Only US Workers have becri yvprse off, HeW Zealand Workers :„ y. come tHiFd m7t£fe....hack,.iq>y, aňdlhe D M$$>3'^Wla.fefÍÍ. wages \'"'"' increases, but by, less than Q.l percent a ye^,|rqjn 1973 to 1985 j (QĚČD, 1987a, p."90)"............           ^. •  ■ -•   .....•...............       „_y
Employment or tfllpniqtives to empltylltplt
The differentunerjlplqxnient outcomes^ &£ J,$23~§5^y&is •- in the Netherlands, Í0.6 per cen f unemployment in |9fP* 9,9 ppf cent in 1986, 9.4 per cent in the third quarter pf 1987» rthel for Sweden the corresponding figures being 2.8 per cent, 2.7 her cent, 1.9 per cent (OECD, 1987c, p. 190) - reflect'to a large ptfent the „differential strengtítqXiabqurinthe two countries. The' InsdüJÜpJiajlzCdSwcdi.sh 1 commitment  to   foil   employment,   fully   acccpjbfj   anď   SUCc"e|šf|íl|y |
232                                        GpjUN TIlKRliORN
ftfä tlUtíHop liy ttio [jiaijrgŕfiiíifi governments bf 1976-82 (they actually had t(} DJltjiff \M tjťfjhf (if [he crisis^ jrl Sweden), was initiated by post-war öbbjrtl ptéltibbfíjbys It-ieh.a coinmitment, and .a.corresponding policy-fflaJdjl|Jii^^                                        in the Ncther(ilnds:T.se7Turther
TK^ybniii 15Mü)í" ^f^i? |ioš|ijve "cftcc'ts of mass unemployment with Cegjirtl ft) Wfjtó jítódjŕ^tjórt, changes in labour legislation and cutting (Jbi^ft t)i| efjiljßb^JVB $<$f Were pöjntcd put by leading Dutch business-ftjejij \i\0\ 0\] Sl^jtys jjftd fqntter leading centre-right politicians in key IrtförvitJW? tH4t ,*}$ ^(Iflpor^qrs Wessel Visser and Rien Wijnhdven made |j1 l9ß?, tH^ jM1^ tf Ldboür leader den Uyl, as Minister of Social Affairs, attfl jíjtlrjíqýihejit in 198 í-2, to do something about soaring títtem^Joýftl^jttt tyere incomprehensible td and competely frustrated by the dořfijrttíílt Chŕis'tián Democratic coalition partner (cf. Galert, Jansen and Vujisje' 19^5, bp\ 42ff., 223).
However, the Dytqj} tiütcojne' was oníy in part a failure in rejation to Labour effortlTan^ffiffie soienln ends of public macřdecononucirand still less"?'cortSeqlíŘiíPČ bf deliberate right-wing pressure on labour market action, It was also a choice of exit frbm the labour market, rather than oi intervening In it, J. he post-war use or exit mechanisms had begun already "with the přoniqrlon pf emigration in the late 1940s and the early 1950s, Characteristically, the first pqst-war socialinsurance legislation concerned unemployment compensation, passed in 1949, and effective from 1952. The exit policy took hew forms in the handling of the structural rationalization ot the economy in the 1960s. Many people laid off were classified as cl sablcd. Between 1963 and Í973 the number of 'disabled' In the Netherlands rose bv about two thirds, from 183,000 to 303,000, then surged to 72O,O0() by' 1982 (Roebroek and Berben 1987, p, 732). By 1 January 1087, there were 792,000 'disabled' Dutch adults below the pension age, equivalent to 13.2 per cent of the labour force (Centraal Bureati voor tie statistiek, 1988).
The Netherlands ceased to experience full employment in 1975, during the Labouť-led den Uyl government: In that cabinet there was no battle-line between Social Demqcrats and Christian Democrats over (un)ehiployment, Tfoere was for a time a conflict between á restrictive Mirilsfei' of Finance and a more exrjansjve Social Minister. But the forme)' was. a Sdclal Democrat and the latter a Christian Democrat (Gortžak, 1978,, p(|, \Ú, 3Iff.). In opposition in the 1980s, the Social Democrats have peer} hiore coneerfied With preserving the purchasing fiower (de i?dopfa(i£Ju)_pJľ transfer beneficiaries JanaI rruhimüm " wage workers than >vit(j cďjjijiatting efiduring massive unemployment.
\^orkihg-r.ímé ŕedUctlpn has beerj a major crisis policy of the unions, encouraged by the stafejjmd at least foj-mally accepted by the employers Iruhe. central ágŕeeipent of 1982. Unemployment benefits are generpus
[Hid CflSY fn get, CVC|1 frit vollf)"1 <.fhrul!-1i<:ivcr«<'   In <;nir<>"nf :i dedine in the
'PII.LARI/.ATION' AND 'POPULAR MOVKMKNTS'                 25*3
1980s, the development of purchasing power in the period 1974-86 has
been much more favourable for people drawing a transfer payment than
'    for employed workers; about 10 per cent total increase to the former,
i standstill (as annual income) to the latter (Tweede Kamer, 1986-7,' pp. 197-8, 2:24). (Although, at least for old age pensioners, similar
u trajectories for benefits and wages took place in Sweden from 1975 to 1984 (Vogel et al., 1987, p. 116).)
Comparatively little effort has been put into supplying jobs and training in the 1980sj trainees usually comprising less than 1 per cent of dieTäoöur force (Centraal Planbureau, 1986, p. 70). for the handicapped there is, however, an extended work programme, in 1987 comprising about l:3~pěFčěht of the labour force. If those measures are included, about 2
i to 2.2 per cent of the Dutch labour force have been touched by such schemes (Ministerie van Sociale Zaken, 1987).
Swedish works and retraining programmes, on the other hand, are renowned, and surpassed 3 per cent of the labour force in 1978, and peaked in 1984. In that year, they amounted to 4.6 per cent of the labour
' force (Statistika Centralbyrán, 1988, pp. 176, 193). The Swedish government takes pride in Jabour market entry. The high rate of employment in Sweden, as well as the low rate of unemployment, arc-highlighted by the government in a rare international comparison in the latest budget (Finansdepartmentet, 1988, p. 111).
|         The Swedish special la.bdur market policy is no substitute for regular
employment. On the contrary, in the mid 1970s a secular trend of a diminishing volume in the total number of paid working-hours a year- a decline due mainly to the increase in pensioners and to work-time reduction - was broken. After a few years of stabilit}', the volume of paid  , work began to rise in Swederi. In 1985, it was 1.9 per cent higher than in 1975 (Statistika Centralbyrán, 1986, p. 15), and the growth continues. In i thi"Netherlánds, the work volume counted in annual hours Was 9.5 per i cenUawer. 'in  1985 than in 1975 (Tweede Kamer  1987-8, p. 39; : Centraal Bureau voor de Statistiek, 1979, p. 68; OliCD 1987d, p. 200). The upward turn of the Swedish labour market in the international crisis is remarkable, but not unique. A similar trend in the employment volume occurred in Finland and Norway also (see further Therhorn, 1987c). The turnaround in Sweden's historical trend is entirely due tt) the expansion of the municipal and the provincial welfare state, mainly in the areas of employment in'health care, care for the elderly and daycare of children (Statistika Centralbyrán, 1986, p. 25). The actual trajectory of (un)employment is, of course, not reducible to deliberate policy choices. However, the former is very significantly affected by the latter (see further TheÁorn, 1986b). The reasons for the Dutch choosing mainly a I labour market policy of exit ahä tne Swedish of voice are no doubt {
iliree elements appear to have been crucial, an ideological tradition, an iWitufional Legacy, and a policy experience.
"There is aDuteh Catholic tradition of exit policies going back to the l')%s at leiste the'Toots or possible causes of which might be seen in the fact that the Catholic Church originated in times before capitalism and labour markets. The proposals (most of them not carried) of the Catholic Ministers Komme and Stenberghe at that time included work programmes, bul had a characteristic exit slant: work-time reduction, exclusion of married women and some other categories from the labour market, prohibition of mechanization and rationalization (de Róoy, 1979, p. 179). Romme was the political leader of post-war Dutch Catholicism in the 1940s and 1950s. That a job was not an important human right was stressed by the Catholic Premier Van Agt in a parliamentary debate in the autumn of 1980. Van Agt tqok Labour leader den L'yl to task lor implying that by demanding füll employment, 'you can onlv completely, humanely and socially function in society when you have a paid job' (Ťwccdc Kamer, 1980-1, p. 200).
It might, however, be asked how this ideological stance rhymes with the Protestant Ethic of Calvinism. The answer is that orthodox, fundamentalist Calvinism (that of the Anti-Revolutionaries) was always against state organization and at the height of its power (in the inter-war period), prc-Keyncsian liberal in fiscal and monetary policy, without believing that society should be left to the market. In other words, the pillarized ahti-statism of Calvinism prevented it embracing an active public labour market policy, while refusing to give market outcomes a principled endorsement. In the ensuing vacuum, support, or at least tolerance, of exit policies could develop.
Patriarchy is an important part of the religious tradition, and Dutch patriarchy has kept women at home. When the grip of patriarchy loosens, this tends to imply an ambiguous attitude to employment as it is so overwhelmingly a male attribute. By 1974, the Netherlands had the lowest female labour force participation of all the OECD countries, a mere 29.7 per cent. Any fernalc right to labour market participation has not been established, although women's emancipation has led to a considerable participation increase, to 41.2 per cent in 1985 (Sweden 7K.2 per cent) (OECD, 1987a, p. 35).
The relativization of paid employment in the Dutch confessional view öl society comes out clearly in the current institution of'work with right of public benefit' (werk mel behänd van uitkerhig). It gives a new twist to charity work, and reters to unpaid voluntary work fpr municipalities or non-profit organizations, lor which the worker is legally allowed to keep his or her public benefit. In 1984 there were officially 50,0p0 unpaid workers of this kind (Sociaal en Cultured Planbureau, 1986, p. 86).
Sweden has no comparable tradition. On the contrary, as was noted
above, an employment provision approach to ü|lemplpY|fj|l;jit vi/aj} Hŕhtly entrenched by the 1920s. There was tilsp ftorn é^fy'tfft ft 'different perspective in "the Social Democratic labour rhpýefriárljá jtíl spité of the official line of the European labour movement, bptrj trip Sjwčdish tťftcje union leadership and the Social Democratic Party j^frälfted ffOtn proposing work-time reduction as (part of) a sajtjticiri b the tliiejnploy* ment crisis. This difference was clear at the LjQ Congfe^ \t\ 1931, fit the SAP congress in early 1932, and in the SAT parjiarnCrttiity 'crisis motion' of 1932, that is, before the Social Deqidprats jiftrj got into office (Therborn, 1984a). The rural Lutheran vyoťlý etliic afta* flip fyct that the unemployment situation \yas not as desperate ás in Cehttal Europe may perhaps explain the stance^ vigorously repeated in the |^7Qs and 1980s, The Dutch Plan of Labour of 1935, on the other hancl, ihctuded calls for work-time reduction, as has Dutch Social pehipcr^tjc &iid tiftde union policy in the 1980s.
In spite of ideology, cash was the most frequent \\$\p ŕíVPO to the Swedish unemployed until 1934, ,56 per cfeht pf ail help in 1933 (calculated from Gustafsson et al., 1974, p; 128). This ^8S less than in the Netherlands, where the dole constituted bbtweeii p9 jtnd 81 per cent of support to the unemplpyed (Goudriaan, 198(5, p. 30- Qttt the fnost important difference was that Swedish tinerhplpyffie^t support was concentrated in one central body that was rcvailiped in 1940 fpr tasfoä pf wartime labour allocation. Out of the experience of jrjü J9^i)s ithcj dl|t of the 1940 Labour Market Commission cáihe it tyii^jjl ttf ft spopííll labour market policy as part of post-w^r planrijn^r. Trjp \iipt priority qf the SAP-LO joint Postwar Programme wfis full employňlfefljtj |fjp w\> '$Hfi wide-ranging 27 points dealt with labour márke't policy ||iji$%j#ty. Labour Market Board was set up, a context In vfliijjrj tile1 ^ČíwM Rehn-Meidneť rhcfdel and the 'active labour rŕiarjcéj; típljty' ČQfípepí could dcyelop. This increasingly powerful arid; yyíill ihstji'fig hody jWtlltjí
with^ uhěmployjm^n^.cpmpeiisatipn         further Rpthst^ii ,Jf flPjf
""No similar central institution existed in the lSíej^e^ía^rj|s ftt the outbjeälčjóf the Depression. One was later proposed',"B'i|ťíťa'f^plejiiiorit^ tation was delayed'""until 1939 and it1 left np heritage foť Ülö post'* occupation era (de Rooy, 1979, pp, 179ff; poudriajftj j^6( p, 69), When Jan Tinbergen (1946) drew the corieItišlc|h{ 0 faf \M$&W period, the need for a specific labour market policy y/as, hflj: atóohg theftij The penalizing relief works petered out in the 195^ ft$ little Of {} modern labour market policy followpd it. By; thé tifrljá 0Ů\$ Jl$jt49?3 crisis, the pqst-war Central Plan Bureau was a bulwark, $M$\ HÍ^Ú^ public economic policies and produced much rnrjeflsfj flft^líijf Mí|ít any  public  works   programme   was   eounterproch ctiVé   (íjee   ft|rihef
I
236                                             ÜÖRAN T|ll:;KIJOlifSl
Therboffl, 1986b, pJ3* }ÍJ3ff-)- A" autonomous municipal and provincial labour market expatlsjOn tyas impossible in the Netherlands, as these bodies have only trihib|< jäpifktidn rights arid receive 95 per pent of their income from the ceptraj štdte (Tweede Kamer, 1987-8, p. 222). On the other hand, the Dutch Sficial security system with |ts low thresholds provided an dpeh dobit; QÜt^if the labour market when, the pressure on the Íattěr~mptirTÍtetf,                 ...............\   ...... ..............' "j        .................r~
Á third part of the jexplar|atibn, after the ideological and the institutional is that exit policies cäpfcpnstiiute a way out of market failure and market weato^T'Whľen.,.PQ. other policy is"'very cre'dibTe by experiehceľThé'DepTÍS^on decade ended very differently in Sweden and^tTiiTNetíterlíihds, Iti {Sivederi, phe end of the 1930s consolíá'ätečľ'ffie triumph Of Social Oferhitálcý which was given credit for its crisis policy. Registered tiOemp}oýírteh| (relief-seekers) in 1939 were only 15 per cent of the 1933 peak (Therbprn 1984a, p. 565). That unemployment could be prevented was a cqjltral part of Swedish political"self-confidence, reinforced by successful labour market policy intervehtiöhs in the pre-crisis recessions aftei' tjie war. TheNetheiiandSj on the other hand, was by the end of the 1930s just beginhingTo'ŕincľa route out of the right-wing, confessional, 'Antithesis' bloc to a ^Roman-Red' Catholic-Social Democratic Coalitfarh With no positive innovations and an unemployment figure st)l| 55 pet cetit of the_ 1936 peak. After the war, scarcity'of laoíJnriíflir full émtijoyrpeht soon epeŕfed, rather une^ecteäj£r The tetnporary rise in ijrtuiriplbyment in 1958 apd in 1967-8 was hardly mét with rtny labour market countermeasures, arid soon Once again appeared unnecessary (Ceptra&l Byreau voor de Statistiek, 1979, p. 69). When "the avalanche Of unemployment got rolling in the_early 1980s - aggravated by the maturing of the last high birph-rate döRörf - an honourable exit from the labour market wáJj. also the most visible solution. It should be emphasized that Drifch labour market exit policy has no nationalistic streak to it. Unemployed immigrants have been given support to return to their native countries when they so wished, put the rise of unemployment was, pot acpOmpajiied by expulsion.^ and special termination of Immigrant labour cphtpicts (see further Therborn, 1987a).
Sweden ahd Me Netherlands háve both created combinations of advanced) mMltirta'tiohnlly competitive privrite capitalism and extended, gunetotls welfare tjtatesj Ip its current scope, this combination js in both ea^iifi ah achjevepieflt of the J9fi()s. The forms of their welfare states differ, howL'Vcr, arid derive from two historical patterns of popular mohjliziitipn and Organization at the time of the rise of modern cupjtalisrn - froth 'pill ariZfltlon' and from 'popular movements'. Dutch Catholicism came to constipate the developed model of the former. Swedish labour came to epitomi/c and to' further, more than elsewhere,
tlie nnnill'11- mm i'mcfit  ti w|!t;...
'l'II.I.ARI/.A'nON' AND 'i'OIU'l.AK M( )\ KMI.Nľs'                   23.7         -
Both states provide both their private multinationals and local capital with a supportive home base. But this loyalty to international and to domestic markets has been combined differently. Sweden has opted for a i Voke'_,pol_icy in the labour market, promoting micPreg'ulating labour|'-H' market actioh^romoting female and yolit^                                               j '•' >'-:
J^q^g^lf^rnployment, furthering mobilit}', recognising-cum-regulating <.{'"'■ collective market action by autonomous parties. The Dutch have j pursued an 'exit' policy, trying to replace collective laboiIFmárket action \ witiTiristitutionalized collaboration, and generously compensating for \ employment by disability, unemployment, and social assistance benefits j an3' bý~ěrÍčouraging unpaid work outside the labour market.                     \
Both policies pbse problems  for private capital  accumulation,  by raising the voice of labour and by providing exit from labour respectively. Both are potentially costly to the rate of profit. The ways that the two countries go about handling these problems are different but functionally roughly equivalent.  In the  Swedish case an  active currency policy \,-.ji enhances internationaT^o"pipětitrVéhess, while trade union power in the j'-,•■', labour market .is accommodated by the mobility  and the technical'' '"" adaptability of individual workers and employees and by the market f flexibility of individual wages and salaries (OĽCD, 1983, p. 48; Abergt \ 1984). The Dutch exit policies accommodate capital interests bv restrain- \ ing state interventions m markets, refraining from an  instrumental  | currency policy and from controlling financial markets, reining in public   \ employment, and holding down public investment.                                       •
'These ways of lipkirig welfare state and capital accumulation are not necessarily stabile. The linkages are no more stable than the bases of the states and of the capitals. They do, however, give both countries their intriguing duality of public welfare and private capital. A labour movement social state connecting with exit policies with regard to the labour market would be explosively difficult to accommodate to private capital. A confessionally shaped state playing by the ground rules of labour markets Would, on the other hand, probably be more manageable, but also more conventionally capitalist. And what Sweden and the Netherlands today have in common is precisely that both exemplify a welfare state capitalism beyond the conventions of pro and ami.
Notes
1 Social insurance and social assistance surpassed entrepreneurial and property income in Norway in 1977 as an isolated recession phenohicnrtn. According to the OKCD National Accounts, the same was the ease in France from 1980 onwards. I lowever, the I'Ycneh transfers ligurcs include the value of services in kind provicied by social insurance, e.g., health tare (INSĽK,
10W7      r,       17il\                        '

I I    i I í'V   »J!'        I
Chapter %
Modernization, Y^^^^0j^i
and the Be^elo^ni^i 0 Welfare States in W^téfjrt piföpe
Peter Flora and jérig í
Introduction'
IV The evolution of the welfare state is bbviqusly rplá|^ tb ä gfeat Variety bf ^social developments and changes: pile of oUr rnajijh. tftikS ttltíä consists ih ■■.attempting to construct a theoretical fťän^wpjHc tMt |j/pt^ltifttlz^íftttd ; relates these processes. In Part I of tftis chapter th| ladhě^pt b^ jnqdbfjí J£ít-<. ', tion is examined since it emphasizes the rtuitiditrie^jpnility 4b4 írtfořrísf H latedriess of developmental prbcésses. Frbrn tfijs, $n^íyšji§, $ rbbrjefniza^ rtion, a sectoral model is developed that pb^es SQnijji i*|jjitjqt)Shjps3tttbf1lř j> socioeconomic and political developments anid tj$fäVbJjjtipfí'bfiWj?jfäj'ö. Instate policies and institutions. More specific Hýpqt:l$|ei$ 4fö thprt ^|tibqJ Ijrated"on the basis of Stein p.pkkart's theory' bf Buťbpeř»nípcilj.|Íba| ^development.                                                      '                  ; : ^HWlMilv
||ii The modern European welfare states really bfegaft if| the last two; decades' |j of the nineteenth century. Part 11 of this chapter de|ci'fto these beginnings'i pthrough examining the introduction of social iri$qŕänc0 Systems thrptighí I |v but Europe and the growth and_ structural Change bfptiplipSbcialexpendi-%tures in three countries. The later growth of thé jíiiťbpeari Welfare states is |i compared mainly through the evolution of the södijat jpsbrance systems iHhat are of central fiscal and institutional importance.
I
I ■
®
.:i...:-|
38       THE DEVELOPMENT OF WELFARE STATES
Finally, Part 111 here attempts to explain the emergence of these syst through the socioeconomic processes of Industrialization and urbaniza as well as through the political developments of suffrage extension parliamentarism. In addition, the possibility of diffusion processes, an. studied in more detail in Chapter 4, is analyzed.
Development of the Welfare State
A. Classical Concepts and an Analytical Framework of Modernization
The concept of modernization has largely replaced the traditional concept of development as well as superseded more specific concepts such as industrialization and democratization.1 Despite its vague and ambiguous meaning, modernization has one salient characteristic that makes it interesting for our analysis: an emphasis on the multidimensionality of societal development, or the assumption of causal interrelationships among economic and population growth, social and psychic mobilization, political development, cultural change, and the transformatipn of the international economic and political order. Figure 2.1 illustrates the relationships among some of the basic concepts of modernization. The main distinction is between general growth processes and structural changes, which are institutional as well as organizational. Growth processes are related to two ^different capacities: the capacity to grow, the core of which is the economy, •::arid the capacity to change structures, the core of which is the polity. This iiijm'ay.i be understood as a generalization of Märx's distinction between the |!growirig and relatively flexible forces of production and the relatively .^inflexible relations of production. The rigidity of social organization may ^'either'encourage or impede the growth of the productive forces, thus {producing strains and conflicts. ;i!j;Nih!the tradition of Durkheim, structural-functional differentiation is the /':; ..fundamental process characterizing modernization. This increasing spe-AÍJvCÍä]ižation'':and fragmentation is intimately related to the processes of ■VK growth' -and affects all social structures, activities, and individual lives. Fundamentally, differentiation involyes a loosening of ascriptive bonds and agrowing mobility of men, goods, and ideas. It leads to the development of extensive networks of exchange and greater disposable resources.2 As differentiation advances and breaks down traditional forms of social organization, it changes and exacerbates the problem of integration, which was Durkheim's main interest, ijte suggested two types of solutions to this problem: integration through mechanical solidarity based on affinity of values, beliefs, and sentiments and through qrganic solidarity that simultaneously weakens the impact of social segmentation and strengthens the impersonal interdependence of individuals. \ye follow here Parsons' cri-
pevelopmént of Welfare Statéjs |fi Wjjp^rfi tm?$       39
W0l-      Figure ?.l
analytical Framework of ]^acterí1ij;íjit|clfl
iiP
IrcroffoFiTHE  INSTITUTIONAL AND OW3»fíZHÍIONAli STRUCTURES
WM»
GROWTH QF THE SOCIE'
>4ii cAPACittliis to; oköt* Á||í? *ŕ(3 ctiittM fctffltiŕJifoEfi
•j mi ca
1
SIPi
fôpique.of-Purkheim3. that these two solutions to the problem of integration Is^dOj'not represent two distinct stages of development, but coexist in modern pi societies..
p|ji;ih,modern, highly differentiated societies fhe mechanical element of Plf'fihtegratipnlies in the core institution of citizenship. This has been formu-N' fated most clearly by T. H. Marshall: "Citizenship is a status bestoweďon those who are full members of a community. All who possess the status are equal with respect to the rights and duties with which the status is endowed."4 Marshall distinguishes between three elements of citizenship: a civil element, providing the rightsjto ensure individual freedom; a political element, centered in the right to participate in the exercise of power; and a social element, primarily constituted by the right to share a minimum level of economic welfare, social security, and cultural heritage. The process of differentiating the basic rights and the institutions giving access to them has been accompanied by geographical integration, or a "nationalization" of the specialized institutions. "Citizenship is by definition national."5 Of course, the sequence, form, and degree of institutionalization of citizenship rights have varied widely from country to country and still do.
Besides the core integrative institution of citizenship, modern Western European societies have developed three regulating organizational structures: markets, Which organize the exchange of economic resources and commodities; associations, which organize the articulation, aggregation, and representation of interests; and state bureaucracies, which organize the fulfillment of collective tasks. There are specific relationships between these three organizational sectors of modern societies and the basic rights of citizenship (see Figure 2.1). Civil rights are related to markets (the right to own property and to enter valid contracts, free choice of work and residence) as well as to associations (freedom of speech^ thought and faith, right to assemble, and freedom of association). They guarantee a sphere of public opinion, that together with political rights forms the legal basis for the development of interest groups and political parties and for the evolution of parliaments symbolizing the associative character ot society itself. But political rights are also related to state bureaucracies, since the right to participate in the exercise of political power only has meaning when the governing power of parliament is established. Finally, social rights are also related to state bureaucracies and to markets. Originally, they were pro-,  vided through ■membership in local communities or functional associa-;Sjtipns^(On."the national level, the right to a minimum level of economic ^welfare arid social security developed successively through the regulation S(läbojflegiálation), supplementation (social security systems), and replace-!|ment'(sqciai services) of markets by state bureaucracies. With respect to the !|šqciál;right,,'tp~sháre in the cultural heritage market elements usually were
!rf:r!;:':■
£ •'    lit    -'
y up jjcveiupinciu ui vycnaip cnmps m yypRitjrn pi)|i|jje!        qi
replaced much earlier through fhe estabilshmerít oj* fjjiplitj šbhf)c)|8, ft|(t| fl|6 institutionalization of compulsory education.
Within this framework then, the development jäf \\\§ íjVeífíifo fefflte jtifiy be analyzed according to at least the fpllpv/ing uilr^ Hf^GtSI
1.    the processes of differentiation (the differehfifltlufj bf ||1t|IVldliäl Bild household income, of working and living place) črkäfljjg Í3Bec|fic) labor market problems that must be solved by l\\& state;   ■
2.    the evolution qf social rights as a corispquérjcb bf (fjröf)fppfeji|ffl|(iti for) the institutionalization of political rights;                 '
3.    the increasing control, substitution and su^eífhjítuírjj? qf (nöl'Mtfl, (atitl to Some degree Of associations) by state tjurěj3ijbrjifíj§il,
B. Modernization and the Welfare Stqíp 4, §0§t§\ klptfel
1. Problem Pressure: Changing Socioeconomic 0'p[)-\d\iiiuY\& qnrf iPplittcql Mobilization
The distinction between markets; association^ ftijfj gtatö bufe^Ucracies as the three main organizational sectors, bf sööjely |ii Used ndW tp draff á sectoral model of the develpprnept of wejfarp staf^ (s^e Figure 2,2), I ft the model, markets and associations aire furtHer divided jtitq tWo jSübsebtprs. In the first subsector of markets (I) those deyotf^hiehtal ftsppctS creating specific welfare and security problems arjs suniftf ar1?ödt The second subsector of markets (II) includes the develpptnenthl #š|J0cts assumed tp lead to social mobilization processes. Ih the first assp]ĎÍ|tivesUbsector (I), associations in the widest sense are included tftai: är|3 concerned with Welfare and security problems independently of the státe. Tjle second subsector (II) embraces those associations thaj; mobilize political Support and articulate demands for welfare assurances from the stäföi
Under Markets I four main problerrts generated by industrialization and urbanization and affecting the immediate ässPßiationS, of family and household are specified:
1.    changing working conditions (for example, industrial accidents);
2.    the development of a free or unrestiained labor contract (for example, child labor.'-.working hours);
3.\ 'income security for disabled persons without property (sickness, Invalidity), ,'• '' for' those' not or no longer engaged in the productive process (children, " housewives, old persons) or for the unemployed)
4.    the provision of certain (public) goods by pohtrolllng, supplementing or substituting for private markets (housing, healt)i( to some degree Education),
These problems are in turn assumed to create 411 objecfiye problem pressure! T,o!„assesS|the ihtensity of the pressure directly exfrf^.q p|1 fife government;, nowevcr, the activities of those associations [lty[ t^Ěflbtld tb
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^ ■   42 r     TEE DEVELOPMENT OF WELFARE STATES ľí|lf$t^ :
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W:
The Development of Welfare Sljäjji|j iff V/ějjtéfft Eilŕopfl        'i3
these problems, such as chürches'and priváty ^HffHíV OľgätljztttlOílS (poctr relief), mutual benefit and cooperative šPcíčUds (Irl^ilf'aŕjC^, hpUfiljlg) arid trade unions (unemployment assistance) mükj. M tjpfjsjüeredi Thiíí association filter will often greatly modify and týpí<jaijy tíllttitiisH tlie objective problem pressure. For example, the countries yWffi Stťpľig protestant state churches developed early a nptiisn of státe respp jiälb, (lity foť pvlblic welfare, whereas in the religiously rriixécj and £ath$jie (IptltitHöS tjie tradition of private charity and the principle of subsidiftť j.k líiVírjg priority to the responsibility of Smaller collectivities^ reŕnait^f ŠjMpiít THUS» differences in the existing associative structures and thei)* \\ Ittjj'lp^j doVojoflrlient may explain some of the differences in the. dévélt||pj-j1^h,), pf tr)é Wöjfäi'ö sttíte,
Under Markets II, at least two developrnistit^ ifjl^y h#Vö jjlägfl r#f j}t|ni||b(e for mobilizing major parts pf the pqpujatipni m ffjé £0r]CÍ3jitrčttiott of the labor force in cities, industries, and enterprises E|| á cOpseqUeitpe of industrialization and urbanization arid (2) thé gfpY/j.h; rjf ifjfpřírt^t|pri ftftd expectations as a consequence of expa^ing tí^ftittittfllcatiqtli Tills social mobilization may find its political éjípressiot^ lil VáHpttS tlflštrttctured forms such as public protest arid collettive vlpjoj-ice or lit Institutionalized forms like voting, unionization, ähtí t(ie t?rea,tlpt) pf political parties and interest groups.
Since the origins of the modern tyeif^re fyáity are closely related to the "social question" and the lab.or mtjyernent, dtffóťérices ill trio Strength and coherence of working class parties apd trade ürijpris are rnbst important for explaining variations in welfare state devplppniehts, To some extent, differences in the strength of labor rripyemeiits $ře $ function of religious, linguistic and/or ethnic cleavages that misfit rjttve deflected attention and support from class issues and retarded the dey^loptlient of welfare states) Alternatively, strong working class ihternatibfiftllSni may have also impeded welfare state developrhents| by fa^iphajUing the working class movement, above all by dividing socialists áľld tíofnniunists and thus decreasing opportunities to gain executive PpW^fi
The problem pressure thus cpnsists pf t\ýp fcleftients; the objective problem pressure and the pressure generated by social and political mobilization. The distinction between these iWp aspects 1$ rjpt merely analytical, since the effects of both can vary widely áS tjjsjstjäsed iti Part I J.I« Nor does this suggest that governments simply ^bt in rfeSpbpsÖ tb pressures; they may not act at all or they may anticipate Sptfte pi th|'tot'qhlerhS tiqd aqt to prevent their full realization.                                       '
2. The Shaping of State Intervention; Byre'a'l'^uty 0tf QélHPťlWy
The intervention of governments in respbflsp jlp| pr ill j| JMtilp^flph cjf the problem pressure historically involyed seVé^J ^Itorfi^IVlSf Qn^ppti06ř)1pd the relationship between welfare štáte pplicj^ qlreöted tpw'^ľd solving
44       THE DEVELOPMENT OF WELFARE STATES
social problems and police state policies designed to repress political mobilization processes. In practice, of course, these alternatives were often combined. Their clear differentiation is possible only with the establishment of modern welfare and police institutions compared to the earlier institutions of a poor police and a health police. A second major alternative lies in the way governments tried to solve social problems. They could choose between direct intervention through labor legislation, factory inspection, the establishment of compulsory insurance systems,'and the provision of public goods (housing, health, education) on the one hand and associative solutions through subsidizing private charity and voluntary insurance and strengthening trade unions on the other. The result was probably greatly influenced by the political strength of existing associations and the efficiency of their programs. • At a more general level, government intervention has probably been : shaped predominantly by two basic developmental processes^first, the : > ;■ creation of state bureaucracies and thus administrative capacity:-Anj parly i '''"'' I and/Strong bureaucratization and centralization mayjhave prompted,Jwel- _--!-, í'fare^štatedevélopment because of greater government resources ah,ä,"sťŕong .paternalist'traditions. It may also have thwarted efforts ^institutionalize -h; democracy and thus impeded welfare state developjŕneňt;lrSecond;;'the';"'ľ 'creation 'of mass democracies reflected bv nnnstitnHnnai ^»"»i-.'-—-,-»1-''" ->- *-\'
:t.I , •:.       -    •■
t! 'creation óf mass democracies reflected by constitutional developmentsYthe'^ľl'' V-i! introduction and extension of suffrage and the legal or de facto/enactment /' ;f Mjjparlijarrientary responsibility) and power shifts (composition|J)f,párlia-iWents'íá'nď governments) are of major importance in the development of ,' government intervention. Of course, additional factors to explain differen-Í cesin the development of welfare states could be cited, particularly cultural ■ 'values underlying the definition of welfare responsibilities and standards
and the^lohg-term growth and cyclical fluctuations of economic resources
and public revenues.
In following sections, we are primarily concerned with the relationship between the growth of mass democracies and welfare state policies, since sufficient information on the growth of state bureaucracies is still largely missing for most European countries. Furthermore, it is important to note that while this model points to possible relationships between factors influencing the development of the welfare state.it does not sufficiently specify their extent and character. This is especially true for the relationships between the objective problem pressure and the associative structures, and their combined impact on government responses. There is hardly any theory from which to formulate a systematic set of hypotheses about the relationships between socioeconomic development and the evolution of welfare states. With respect to the processes of political mobilization, organization and institutionalization (see columns 3 and 4 in Figure 2.2),
The Development of Welfare States, Íri Western Europe       45
however, we can utilize Stein RokkarTs thedry of European political development to formulate moře specific hypqthésiesl
C. Rokkan's Stage Model and the Evolution er/ the European Welfare States
Stein Rokkan's theory6 attempts to integrate Va^ptlS ttpfit'oflches to the study of political development to explaih tiifi gj^Wtfi qf tjie European national states, their external consplidatjón.ahd th#j|' |f|teťnft| ^structuring (or consolidation), It essentially consists c|f ty/cj Ú$t\ty tytyU a. tj-jecjťetictll conception of stages of political deVelpptn,éhtí séf3oi|fl j ^n1ííjťjpa|typaj0g|eB which try to explaih variations in these röSpectiy^ jH!$8á (for isKflHJpt^ |n territorial consolidation, the iritroductipri dhd ^{jáj^ítiri of suffrage, cleaV-ages, and party systems).
/. Stages of Political Development
Rokkan distinguishes four stages or problems of political development that may form relatively distinct ptiases or may coincide and even cutpUlate to cause developmental prises. The first two phftses arc primaiily thrusts from the center toward the periphery, attempting to subject it to military-economic (state formation) and cultuial (nation building) control and to create subjects (of the king and later the state). The last two stages oi iglnate predominantly from the periphery toward the centei- and aťe aimed at an internal restructuring through the extension and redefinition of citizenship (participation and redistribution):
1.    SiaielFonnation or the development pí"fiscal ähtj f)i|jitary states, T!l|s phase involves political, economic and cultural uťiifibíttirtjl St the <fl|tö level, the creation of organizations for the móbiližatídn of ("^Sötifceij (lax bureaucracies), the consolidation of trie territory (arhjlés) ^nd the iTUilrjterianca of internal order (police and ärrny).
2.    Nation Building or the building or grqwth pf Hätiötlal Öt$tos< This phase refers to the establishment of direct jfcoritabtä tmtWöep the elitě and larger sectors of the peripheral population through cohäefipt armies, schools, mass media, religious and linguistic startdardiz'^tlpfti
3.    Participation or the development of mass deitjäcrfioíés Prtd the establishment of citizenship through the eíqualizatíofipfpdlulpBl rights. This phasa Includes growing participation of the penphéj-äl ppptll^lürt, the institutionalization of civil and political rights (frančttiséj parji^nlents), iihd the creation of political parties,
4.    Redistribution pr the development of welfa^ stated and the establishment of social citizenship through the redistriputign pf resources* goods and benefits, This phase irtvolyes the creation of public ^ilfflrß systems (social security, health, education, housing) arid public pdlicips for t|te fcqualization of economic conditions through progressive taxation and transfer payments,
it,    i   1HĽ DfcVüLOPMENT OF WELFARE STATES
■ '"»"/lii'-
t * 'i

•A primary question is how the development of the first three stages has created general conditions that either promote or retard^the development ' of welfare states. The relationships posed in the precedingsectiqn can be viewed now with respect to variations in these phases: these include variations in the early creation of stat'e bureaucracies that are closelýireláted to the problems bf territorial consolidation (state formation); [variations in old cultural cleavages (nation building) that later may have detracted from "welfare issues"; and variations in the structure of party, systemsfparticu- ■ Iarly in the strength and coherence of working class-parties'(participation).' i ' 2. Institutional Variations                                    '•' •   :'^'%''<ÁU:'i'^ě(:\    ' '-"'
We are particularly concerned with the growth of mass, democracies and , their consequences for the evolution of welfare states.'In I general, the introduction and extension of the franchise and the legal or.de facto,, enactment of parliamentary responsibility will probably create'.ajsetting promoting the development of the welfare state. This, is because opportune""* ties increase for economically disadvantaged groups to articulate,;aggre-gate, and represent their interests and demands, and eventually to gain executive power. More specific hypotheses about the establishment and nature of welfare institutions, however, seem dependent on the interaction between these variables:                                                   - " '


1' i-i.   '
<t^m,^Aľi'
it  *" i Table 2.1 Enfranchisement, Parliamentarism, and Social Rights
•;.-;ß'.- ŕ-

LIBERAL DEMOCRACIES
Public assistance as disqualifying alternative to political Und civil) rights '
MASS DEMOCRACIES
Social rights as democratic
' corollary of political rights
and as consequence of party
competition for votes1 *?^
SfeHji^y;.?-,
•|iiJNög4pariia[nent-iijj any J ŕegimé>á u'í.
íff-.ijjUf.í.rfE jíl-;,-;..-
■■CONSTITUTIONAL-OUALISTIC MONARCHIES :
Poor' relief as'pátéŕn-alistic responsibility' for needy,'subjects'
nm
Limited (manhood) suffrage or estate representation
Social welfare as authoritarian defense against (full) political 'citizenship and as consequence of a competition for loyalty:
Extended (manhood or adult) suffrage ■'
The Development of "\ydlfare §t^íés (it V/ést^rn Europe       47
Hypothesis (1) Cönstitutiprial-dualisüc monarchies, tyith, a litnited suffrage or an estate representation are likely to develop; tölätively Undifferentiated and localized systems of poor relief in t.he paternalistic tradition of bearing responsibility for needy arid obedjent subject Benefits ate based on Charity, not entitlement. TJiey usually are ifj hónrnotíetary form and restricted to persons unable to work. These regijt(oš ftmintain of even extend poor relief in response to growing sqciál rie^ds, but they do not introduce more differentiated systems based Op éhtitleiijént.
Hypothesis (2) Liberal democracies with a llriiitér) suffrage based on property, tax, or social status tend to restrict g'ovetrijrneht Intervention in general and public assistance in particular. Ttieý may eyen reduce welfare expenditures despite growing social needs. They are l}kely to maintain or develop relatively undifferentiated arid localized syStétt^ With benefits usually restricted to persons unable to work. They bppb^ obligatory schemes, but may subsidize voluntary mutual bpriefjt änti Otliéí4 associative efforts, Public assistance receiver? ate disqualified as pt}|[t(ÍÍBÍ citizens*
Hypothesis (3) Mass democracies ariž írioťé Jllté|ý tö rjeyp(pp extended, differentiated and centralized welfare 5ystejrh^i pl^Bp Qfi Söcfa'j rights and obligatory contributions. They are rriqŕe pred|jäprjš|tl tp; jjfl so thäll Upíral democracies or monarchies with liriijtec} ^tif^ag^ jjpöattse they face a stroriger and rriore organized working Class äM k|t|S£(tBj' pprtlpetition for the vptes of economically disadvantaged grč|U$s |tjfcí rjepalisö Wprkjhg claiis parties have greater opportunities \q gain ďxeoi}t}vČ ßpY/Eif, Vv'lthin mass democracies, however, great variation^ may te^|i|t fí^jli rJ!fffiföhöes in the party system, above all the strength ^hd cpjr|e^tiš$ pf the V/Otklhg class movement, as well as from differences irt (jié fjöVelppttieht of Stute bureaucracies.
Hypothesis (4) Constitutiqnal-dualistic htort^rphieS with extended suffrage are most likely to develop mqre extended, rjíffeřfejttjilted ahd centralized * welfare systems based on obligatqry cb|i|(jptlj:ipris aild erUltJernenlB because of stronger paternalistic ant) bure'aUpj-lilie traditip(iS and greater autonomy from middle-class pressures ppppsecj td frttbllp výplfare activities, They face greater organized přessulreš from \\\é. iVfjrkjrig1 ölafe^ tHflt lead to the development of welfare ihstitutlbhs äs | doforlfjiS a'gaihSt fv|il participation rights and as a means to strengthen >yjáfk(hp PÍítss Idyaity for the authoritarian state.
This fourfold classification thus prpdiic^ |i sitriple typölpgy pf institutional settings that may proriipte bt retard tji^ dpypjoprnent of welfare states and produce specific variations ih púj^ío Welfare institutions, Since
;:.'/■
48       THE DEVELOPMENT OF WELFARE STATES
all European countries in the last hundred years can be associated with more than one of these types, their welfare institutions at any given point will show the influence of varying developments. These hypotheses will be tested, at least partially in Part III, since variations in the institutional ^řevéJopmeht of mass democracies are probably most relevant for explaining the different beginnings of the European Welfare states until World War : ii.'fThus, we shall now turn to ä descriptive discussion of these early ;:i 'i'differences^
:   r-vr-.lh A Comparative Description qf European Welfare States "!': Äi-The Beginnings of the Modern Welfare Statě
: ;;/'While the modern welfare state is a product of the last ninety years, it has f !i ah important early history. Gaston Rimlinger7 has convincingly demonstrated the need to distinguish between twfcf phases of this"pre-history": the "Poor Law" period from the sixteenth to the eighteenth and nineteenth centuries and the "Liberal Break" of the nineteenth century. Poor relief became a matter of national concern in the sixteenth century with the emergence of national states iind economies, it was a "reliéf of the poor within a framework of repression." However, the poor laws contained an element of reciprocal social responsibilities, but they were much more reliant on punishments than on relief. The reciprocal social responsibilities mainly referred to the relationship between individuals and their local communities, since the execution of the national poor laws was left to local authorities.
Whereas the old European welfare states developed very similarly during the poor law period, the liberal break produced many divergences. The core ideas of liberalism — individualistic freedom, equality, and self-help — were antithetical to the former concepts of dependence and protection. The importance of this second phase lies primarily in the coincidence of new social problems created by industrialization and urbanization with an i emerging philosophy that facilitated the destruction of old protective ' . institutions.
1. The Take-Off Period
The take-off of the modern welfare state occurred in the last two decades of the nineteenth century. We use two measurements to delimit this breakthrough: the increase and structural change of public expenditures with respect to social welfare (social expenditure ratio), and institutional innovations (above all, the institutionalization of social insurance systems). iHere, the long-term development of public social expenditures can only be illustrated for three countries for which longitudinal studies are already
<•
l.i
The Development qf W^ajrä %iti& it} "Wp^ľn Ettrope       49
ijf. available: Germany, the United Kirigddrri, |iifj $$^{5$,! ff qWÖYett they reflect the average level and variation ih iWi^FJtš $\ \né ttttli Hf t1"l? opfitury, since Germany then had a comparatively rt||H j"átlti qf tí|f líiJQ štfOl&i QKpdtí* ditures to GNP and the United i^jrl^dorn fJťío'oT tf# IťV/est.
Figure p The Development of Public ExpericjHqres iíf tjljsfttf^
the United Kiríj>t)tiiŤi; áhd S^vodétj
Jí of public expenditure.
jí lit M\\t impiipilHtirct
f
; f'%u^
""!.,■_ Between the turn of the century and the end of World War 11, the ratio of 'A publip'expenditures to (
1   r
km
l:'Á public'expenditures to GIS.P roughly tripled in the three countries. As "j Figure 2.3 illustrates.-social expenditures djspropqrtionally shared in this '"Ftreméndbiis increase: inGermany the proportion öf social ex
„___ , _                                                                              Xpenditures in
^thefbudgěLrose from about 30 percent td 62 percent, in the United King-
ní ■" i"™" *"Yi vi * i i J' y i i-.                                                    ' '                                                                                           '
r^doŕn'.ŕŕdmíabout 20 percent to 47 percent, n)id in Sweden from about 3C
i :.',if. .1,' r.i
545
i he JUtVĽLOPMENT OF WELFARE STATES
percent to 53 percent from the beginning of the century to 1960. This steady increase was curbed only in times of war, and accelerated during economic depressions.
The trend and time pattern of social expenditures has been predominantly shaped by social security outlays in the sense of transfer payments for social insurance and public assistance. Although the structure of expenditures cannot be given for a common base-year at the start of the century for all three countries, Figure 2.3 illustrates that these payments have absorbed an ever increasing share of the budget. The widening scope of income redistribution through social transfer payments thus seems to be the most significant structural change.in the development of social expenditures and of public expenditures in general.
This may justify our concentration on social insurance legislation as the basic institutional breakthrough of the modern welfare state. Four main social insurance (or security) systems developed in relation to different risks: industrial accidents; sickness (and invalidity); old age (and invalidity, survivors); and unemployment.
1
2. The;• Break with Liberalism
S
f'Although there is ho uniform sequence in the establishment of these four ŕľsysťeínš,-in'general,'social insurance for industrial accidents came first, ^unemployment insurance last, with the other two systems in between. This ,Vcan'j.be shown:1 by determining.the sequence of the first laws establishing reompujsp^s'ýstems'foreach of bur twelve countries. Table 2.2 summarizes .Vťhe:total{and average ranks, as well as the first, last, and average year of liňíroďuctión (see also the list of laws in Table 2.4). The year of the first law
[MICH,!'):-     j''-'.'}:; J .. »\                '   ,               ••-  .                  ■                                    '     ,'                  J                         '
<!.estäblishirig: a compulsory or voluntary subsidized system appears in /brackets.:'
.brackets
mm
i ií
Table 2.2 Sequence of Introduction for the Four Social Insurance Systems
ACCIDENT INSURANCE SICKNESS INSURANCE OUMGE INSURANCE UNEMPLOYMENT INSURANCE
Sequence of introduction: ranks 1.      2. •    3.      if.   average 7        2        1        2        Tie (6)     ft)     (2)     (-)     C1J7)				Non-compulsory	Year first 18B*i (188*0	of introduction last       average 1971          Wi (1911)        (1898)
2 (5)-	(2)	5 (3)	1        2.<i (2)     (2.2)	1	1883 (1883)	1963          1923 (1963)       (1906)
3 (1)	5 ft)	3 (5)	1        2.2 (2)     (2.7)	-	1889 (1889)	19Í6   '       1922 09«)       (1912)
(-)	1 (2)	3 (2)	8        3.6 (8)    (3.5)	<i	1911 (1906)	1967         1930 (193*0       (1917)
The Development qfWejfaré States tri W^éj-rt ÉlirrJfjä       51
This sequence may tentatively be' explained t}|> \\)$ tfögtec tp Wfllfcb the introduction of each system represented á bŕéptk ty\{\i tlitít )ib0f|ii Ideas concerning the assignment of guilt and responsibility att)öng Individuals, groups, and the state. The break; w^h liberalism lay äjjöVQ all in the principle of compulsory insurance as Well as iri |h£ ('ecbgí}j?od amount of state (financial) responsibility. In corhparíšorjj tjriJK bföäk with patrimonial traditions was much less vivid, lyittg pHmftj-ily in th£ pHficiple of Individual legal 'entitlements that is from the liberal tradij.loh,
The; introduction of accident insurance or ýťpfkmen's compensation constituted the least radical break with jiberalisfn Since It could be rationalized by redefining the old idea of liability fpr jhdivit|ually caused damages. Two aspects of employers' liability, hpwfeveri ^pje^etited a clear break rather than a mere redefinition. The first Was that irjdustflai accidents were increasingly viewed as an inevitable ekrrfént pf ijidu^trja! production, thus weakening the notion of guilt (with jts ťellančo öji bpttft (Hals) and introducing the principle of automatic cpmpensätióh fpr1 the Iqss of earnings through work injuries. The other aspect jVas that the individual liability of employers usually was replaced by a ptipjlhg of Hsks among all employers of an industrial branch. Of our twelve üpuhtrie^ ftVÖ ihtrpduced workmen's compensation schemes first (Belgium, Öepmatk, trance, Sweden, the'jUnitedJ Kingdom) mandating employers tcj rJf0y|de relief» while the othéřseveh started with compulsory insurance stshljtiBS (AUSÍrÍB» Fjuland, Germany, Italy, the Netherlands, NprWäý, S^itžäŕ|a(id) that, tbflfty, all count_Hes:possess.
.'Providing security against risks of nonoccupational otiglt) (sickness arid olďage) that could not be viewed as individually cailstid darilages constl-tuted.'a" much,deeper break with the liberal tradition, 13oth of those Hakt) at that time were the main causes of poverty apd destitution, and their mitigation required the commitment of much gŕtírUeŕ fihílncíul reSOUipes than-were'needed for the compensation of industrial accidents, The primary object of sickness insurance, whether corhpü|sOry or only subsidized, was to provide cash benefits in the event of lost eärrjlngs due tq nonoccupational sickness. The degree of substitution between priva. te (subsidized) and public (compulsory) schemes seems to have bech somewhat higher for sickness insurance than for old age insurahce. This is suggested by the fact that six „countries'introduced subsidized voluntary sickness Insurance schemes'thät;"üsually were retained for long periods apd reached comparatively high';cp'verage (high coverage: Denmark J892-1933, Sweden 1891-1947, Switzerland;.-1911 ff; low coverage: Bejgjürn Í8*?4-I944, France, provisipnalif'Í,852-jV930, Italy 1886-1928), whereas only three countries introducé'p^sUŕsiqľzed voluntary old-age insurance (Ďelglurri 1900-1924, •Fra'np-prqyfsional 1856-19it), Italy 1898-1919) with only Belgium teach-íng'a'highérJével of coverage. Pension insurance schenieS usually gi o U p
AS .
r'l    ;    ■'
•'Ť '
is52       THE DEVELOPMENT OF WELFARE STATES
hlVi'•; :• together three different risks of long-term character: invalidity, old age, };!i; ; '„• ■ ;i and: the death of the family breadwinner (survivors). Of these, old age has í"j;'         generally been the first (together with invalidity) and by far the most
important. Besides controlling and subsidizing voluntary schemes, the state intervened primarily in establishing either compulsory public insurance schemes or demogrant (noncontributory) universal pension schemes financed by general revenues..
Unemployment insurance jwas usually  introduced last because the   ' notion of state support for the "undeserving poor" required the most radical break with liberal and patrimonial principles. Due to the special difficulties of solving unemployment through insurance techniques (see Chapter 5), public assistance programs persisted with subsidized volunlary and compulsory insurance schemes. Three countries still have only subsidized voluntary schemes (Denmark, Finland, Sweden), whereas five others have retained such schemes for a long period (Belgium 1907-1944, the    í Netherlands 1906-1949, Norway 1906-1938, France 1905-1967, Switzer-    \ land .1924-1976). Only four countries introduced compulsory insurance    j, systems from the outset (Austria, Germany, Italy, the United Kingdom). r ,1
B. The Development of Social Insurance Systems                                       !
/. Steps in the Extension of the Sociál Insurance Schemes                          I
The expansion of social security systems may be described qualitatively by the risks and social categories successively covered, as well as in quantitative terms by the number of insured persons. In general, the sequential steps of extension within each system háve followed a similar pattern in including new groups of persons and new types of benefits. Initial provisions for industrial accidents were frequently limited to workers in a few especially dangerous industries. By 1911, when Switzerland introduced its i-        program, all twelve countries had workmen's compensation schemes of /' r ' L some kind, and by the outbreak of World War I all had extended them to ! : " ;  the; majority, of industrial workers. In a second step, the schemes were ;     .  extendedto additional groups,' primarily agricultural workers and later to •j    'the'majority of all employed persons. This step usually was completed ;■       between the wars, although Norway and Switzerland did not extend their ; schemes to agricultural workers until the 1950s. The third step was marked ffi ríiVhíbyjwiddning the concept of industrial accidents to include new risks such as Iľjjf íijjlpčciipáiiorial"'diseases. ;With the'exception of the United Kingdom and íltí :i!^3S'witzerland: that had broad1 definitions of industrial accidents from the iMi íriflýkŕy^ beginning, -this step-was' made after World War I. A last step of I j|jl I Ije'jcfénŠiótíi''which largely did'not begin before the 1950s and which is not yet HIP Í f complete;' cortsists-'in the extension of coverage to self-employed persons.
!■!!:;!!

r
Tra
P$7-

The Development of Wellare Mates in western cuiupt       jj
Sickness insurance, at the time of its introduction) Was usually limited to industrial workers and a few catcgoiies of employees below an income limit. By 1913, when the Netherlands passed a law on compulsory insurance, all countries had taken legislative action to provide some kind of insurance scheme. In the next step coverage was extended to groups such as agricultural workers or higher paid employees. In the countries with compulsory schemes, this step usually occurred in the 1920s, The consolidation of the schemes through the provision of medical benefits, either introduced for the first time (the Netherlands 194l) or improved and extended to new groups, represents a third step. With the exoeptioil of the pioneer Norway (1909),  medical benefits were generally extended to family members between! 1930 and 1945, while their extension to pensioners usually came about a'decade later, between I94I (Germany) and 1955 (Italy). As in the , ,cašé of industrial' accidents, the extension to self-employed persons marks
the'last and" fourth step, mainly in the years aJter 1950,
;, t Irii'the introductory phase of pension insurance, coverage war usually
' limited to workers and certain groups of employees ý/lth benefits limited to
-'! jóldráge'la rid /or invalidity payments. A first major Modification occurred
'-■^whVrT^urvivjorsVbenefits were included: Gefmiitty was first tri 19(1 With
';most'icountries following by 1930. Howeyer, Introduction in Switzerland
'^•j'foii.'^u^ ^;Hinr,t nrrnr until 1946. with other Scandinavian countries

fv


^ rcorlsisteď'in thej inclusion of sell-employed persons, n^c, yno u^ aev •'[insuŕancé'schemes in Scandinavia covered tlie entire pdpülatlop fioip the ',very, beginning, while the other countries moved |o\vard this gdai only öfter ',Woríď_lWar*II. The introduction of periodic adjUstrhents of pensions to price or,jwage levels, and the combination oř fixed (national mihinriutn) benefits with earnings-related pensions may tje understood as a fourth and last significant step. Most countries introduced pension adjustments only ' after World War II and between 1955 and 1965, While countries with earnings-related pension programs moved (towards, supplementary flat— ' rate" pensions, such as the Netherlands (19^6)) Itfyly (1965), and. In a Sense, also' Ger'many*( 1972), countries providing flät-räíe pensions,'such as the • Scandinavian countries and the United Kingdoni, introduced SUpp|emerj-1 tary earnings-related pensions in the period'of 1959 to 1966, "'"'Unemployment insurance initially was typically lirnltec) to industrial ' workers or specified industries. After the differentiation between insurance benefits of limited duration and unlimited assistance benefits Independent of contributions, the major consolidating steps of the Insurance systems consisted in,the extension of the schemes lo Wider groups, including agricultural workers, and the introduction of depehdants1 benefits,
..^^„.^uriwDHi vjr wuLhARE STATES
2. Stages in Social Insurance Legislation
Considering the general chronological development of all these schemes, it'is, possible to distinguish four phases or stages of social insurance legislation9:
!.    A classical introductory phase from the early German legislation until 1914. By
r/"'•    the outbreak of World War I, all twelve countries had some kind of workmen's
;' '': compensation schemes, ten had introduced either compulsory or subsidized
, i'/'ii.-i voluntary sickness insurance programs, eight countries provided for old age,
; niji" while only five had established some kind of unemployment insurance.
■| .,2,.',,...,A,. phase .of extension between the two World Wars. Social insurance was
:'','í;;j''' adopted'in additional countries and was extended to cover new risks (espe-
r,l ':f'';ŕŕi!ciaily unemployment and occupational diseases) äs well as new groups (parti-
i.i :.i";íi:'!JCularlý nonemployed persons such as farnily members and pensioners), thus
; , i;i.i:--.'adding the idea of a national minimum to the older concept of just wage
"?v;ijiilV, substitution. At the start of the second World War, the majority of the twelve
i;:[ i:Ui;ř'. countries had made accident and sickness insurance compulsory, all countries
'•'■'■ .!'•" :had introduced some kind of unemployment insurance, and, with the excep-
'•:   '''''"'tión of Switzerland, they all provided for olej age.
!,:., yíř^A"phase of completion immediately after World War II. In this phase, extendi:] jfřtfšjyyieforrns in several countries (Belgium, France, Sweden, Switzerland, the fc'j:jijj;{uhited Kingdom) made the catalogue of covered risks complete, so that by ;.,:, 1950 all nations had rather comprehensive programs for all the four main risks. Allcountries had a compulsory pension insurance or demogrant scheme; eleven possessed compulsory accident insurance, nine had compulsory sick-•   'f něss insurance, while seven had adopted compulsory unemployment insurance. 4... A; phase of consolidation and reorganization after! 950. Two major changes . occurred in this phase. The first consisted in extending social insurance to self-employed persons, often accomplished through the establishment of universal insurance systems. This step was to some degree related to Lord Beve-ridge's idea of national solidarity as the core principle of social security. The second change was constituted by a coordination, and even unification, of existing schemes based on a more comprehensive conception of social security. By 1965, all countries except Germany had extended their pension and sickness insurance schemes to some categories of self-employed, and, beginning in the 1960s, several countries tried to reorganize and unify their social security systems (particularly Italy from 1965, the Netherlands from 1966, Norway from 1970, Belgium from 1970 and Germany from 1972).                  ■
3. Measuring the Scope of Social Insurance Systems
Quantitative data on the extension of social insurance coverage partly reflect these broad legislative phases. In order to facilitate a comparison of national scheme extensions, an index of social insurance coverage has been developed that consists of a weighted average of the percent of the labor force covered by the four systems. The weights given to the four systems, tentatively derived from their varying financial as well as sociological significance, are: 1.5 for old age insurance coverage, 1.0 for sickness and unemployment insurance coverage, and 0.5 for accident insurance cover-
The Development of Welfare Stated j.i #WM WW
Figure lA The Growth of Social Insurance Cóvéra^ % W^řjt WW*
tö
.'ÍS54'
-■■':Wf r'-^^-riď^lTable 2.3   '-'-■-' Parameters" of thejGrowth of Social Insurance Coverage
1890   1895  1900   1905   1910  .1915   1920   1925   1930   1935   1940   1945   1950   1955   1960   1965-  1970
Mean index values
2'° 5.1 5.8 7.3 10.it 18.1 25.2 28.4 35.0 40.9 53.2 56.2 66.2 75.1 88.2 95.3 9?.8
Mean percentage growth                  ,
per quinquennial period                3>0 °'7 1'5 3'1 7-7 ?-1 3.2 6.6 5.8 12.3 3.0 9.7 8.2 13.1 7.1 2.5
Median percentage growth              0.5 0.7 0.8 1.0 1.3 4.6 2.1 4.2 1.4 5.T 2.7 5.7 6.3 9.5 2.6 4.7
No. of countries above
mean percentage growth                    '
6
3
-4
_2
■5  4-5  5
Range
Standard deviation
17.8   39.8  39.5   38.9   43.1   53.8   57-5   58.0   70.7   87.4   71.4   68.7  74.5  56.0   65.4   60.1   56.1 4^910   10.7   10.2   12.2   18.6   17.4   18.2   20.9   25.1   23.6 72.6   21.4   18.9   19.6  17.9   15.6
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vr"B i- •* 5 o ř 5 racuom    -i-^t? o S -c -= rr'SL-Ä J° c?
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i «a UfiVtLUťMENT OF WELFARE STATES
trial workers. Suteid zed vTh ľ ' ľ        ™r»S' majority ot indus-important subset of these sevrntv 1,    ľ  9      ,           hlgh coverage. An
^■j.-.(4i™JÍSZľ?Ä^aiS.'tafim,f*,r
or.subsidized voluntary system íexcliirfinľ i   eStabllshlng a compulsory
limited and special groups)          (eXClUdlng ,nSUrance schemes for very
A. The Key Variables             ,
Three independent variables are used in m,r „» variations in social insurance in Weľtem Euľooe £?PV°- ttplain',he time span and the large number of counttL tnľ      C,°nSl4enng the great must be simple. The8 fir«;^twľvarkb^ problem pressure socioemnnm.v a    V                   the basic elements of
ment intervention. All three variabler?     } 'hatshaPedgovern-
which social problems arise poli cadeí?     °f SOdetal COntexts in tional solutions are sought                        '   * ** formulated. a"d institu-
/. Socioeconomic Development
these processes generatľand mľnSifvľ "^J"1^ assumPli™ is that auction of sociaf insuranceľsécuriv?, Jľ ' <™ Ieadi"S t0 theintr°~ capitalist organization 0?n oduc on fnZ' T"^ '" ^ "^ °f * the percentage of the labor fnľrl         ndujtria^atIOn (I) is measured by
sector, and urbanLation rm b^ th?1^ * *B ^"^ <indust"a0
ing international comparison Sd   ,ľ   " "i^11"!*8 ^a criteri™ focilitat-      ' rural population tI»a^SS^tgKyrM "^ Urba" a»d 2y Political Mobilization of the Working Class
; pricing class is coraidered- tLWm" "pS , ítri brSa"°J °,f !he
assumption s that working h^c ™„ut     •     . vanable- The underlying       , pressure for inToéľc^c'nZ^nT^ ? * "^ °f the Pol*ica> .class parties did not ivľdernľnľľ    ^VT' CVen though w°rkmg-^mply'that ^J\£^^S^ ™-- *-«». however,
^«nsclw mobilization. Thisls mSreTnv^ ľ "    ^"^ 3gainst Ulf ^ns f0r working-cl^Ses^y theperCemageofvot«in
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The Ueveiopirient oi yyou^ip o^j.^ m j^rH^v,„ r
table ÍZ.4 Core Social Insurance tiatys in1 ^jé&jéfli JSijyope
'i! I
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1-1							~3    ^							
11														
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i~(  r-4														
t«														
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ä														
a														
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1	-g    -5		1	i	i									'I
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		r	*■ s	- g	r-   m	t- .	T"   T	r?	r-	r	r	r		
g	O		.s	s.	S									E
g	1		1	■a	-^									J
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s s					'!									
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1			I											
a			IU											
s			o;						^3					
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L.														
w   ra														
Sí	~													
B    a														
-ae ^3														
u   O														
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f»														
1														
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O   .H	'.(■     *    l													
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1^	.ü:i:;-	1	,	1	M	^1::	I	S		1	1	1	1	18
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w
•sú       ine uoYCL.uľMt.ssi Uh WELFARE STATES
1
3. Constitutional Development
This variable is only used to explain social insurance legislation until World War I and consists of two dimensions. The first is the extension of suffrage with respect to social stratification or social class, so that sex and age are held constant. This is calculated a,s the number of enfranchised males expressed as a percentage of the male age group defined by the respective electoral laws.12 The second dimension of constitutional development refers to parliamentarism. Here, the political regimes before World War Tare simply classified as constitutional-dualistic monarchies or parliamentary democracies.13
; 1 \- We shall now turn to an examination of these internal factors that might 'explain variations in the introduction and evolution of the social insurance iisyštems:'First, however, we examine whether external factors, primarily a Ijjďiffusioh' process in which countries imitate and adopt institutions from an 3''innovative ^pioneering country, might not have played a significant role. 'tB.'áExámining the Diffusion Process Concept
fllfíKTnat^thé introduction and evolution of socjal insurance systems in our liťvyělve^countriés might be interpreted as a kind of diffusion process is ^suggested;, in :Reinhard Bendix's conception of modernization: "a basic 1 eiemerit'of modernization is that it refers to a type of social change since the ^eighteenth century, which consists in the economic and political advance of j:isorne.pioneenng society and the subsequent changes in the follower socie-Í £ies!"I4| Iri'this case, Germany obviously was the pioneering country. However, the mere fact that other countries followed chronologically is not sufficient proof that these countries were decisively influenced by the Germán example.15 The crucial question is whether and to what extent the development in other countries would have been different if Germany had not established its social insurance systems in the 1880s. We should first note that in several other European countries, similar projects were discussed at the same time or even earlier. Thus, the idea'was not completely new, and it is reasonable to expect that another country besides Germany could have pioneered. Furthermore, we would have to know whether the German institutions were really viewed as a model by the public, the legislators, and administrators in other countries. This question is analyzed in Chapter 4 with respect to the Scandinavian countries, and the results are ambiguous. Unfortunately, we are not able toconduct a similar analysis for all Western European countries, but we can develop an alternative test of whether the development in these countries would have been significantly different without the German example.
The diffusion concept, as related to Bendix's conception of the modernization process, is a far-reaching one: It holds that because one country pioneered in introducing a specific institution at a certain level of develop-
The Development pi Wéllätj? ijtatps \n western üUfQPe       oi
ment, other countries will adopt this instiiütibh it} general a(. a lower level of development. Thus, if we define here level pf deVelopfnent as the level of socioeconomic development ön the qne hatid &hd the level of political mobilization on the other, we cdpld hypothesize tjiaUhe follower societies that introduce these institutions later in thrphojtygicftl Ume establish them earlier in developmental time, i.e. at loy/eríeVejb pi appjoeconorriic development and political mobilization.! This hypothesis is clearly rejepted by examjftih| Ú\$ [Yfó sc^tterplots in %M} Figures 2.5 and 2.6 in which, allséveritý7Í.wp^ Cj3r| jsy/p äfe report^ With H$' respect to the year of enactrrtent, the level of Sb^i$9Üftrtt}rnle djyejbpmönt mŕ , reached in that year (Figure 2.5),-|and trip levej rJf y^liíh^fiíSš UlphilířB" §1';'- ■ tion-!iň the'same year (Figure 2<6). The fpllpy/er^pije^fi festtihjisljöfj their llérA' sysi^P^usually at a slightly, higher leyel of £opii$j3cpttdrtiic deyöjtipriient m"C and'.generally at á much higher level of political Älzätidn, P:-','     !!^"ifV'irí,|VJ|,;|                         ■■■■■i'"      ľ.rp ■■,nr,,-.-,> r< .
h,,'   '&!?    Í",,         ,                     Figur* 2,5    ;
|i: j-',1 Social Insurance Legislation and LeVe S of ^'Me^Út^ UfiYfeippiijOitt
f?ílJ"   "'      '"'''lBBO-"''1' 1890 ,       ibco        1910        1920        193b        1940     J lSbb        IÖ6ti        19/0
„   _    1                                                     =      ^^            řSno        . •       ■■   ' ■.  'i."     \jÁ  -I                                         |   ň  0

'    .1     !     .
GB «3B«08            rS       nS
i   A's,u       *    -
\k
i-
Legend! ' ' A    compulsory accident instiranpé
conlpuleory sicktleas Insurance.
J.Í, ',  "kH'P,  compulsory pension insurance i",'PiiEj i-i-'j, ,   T I                   t )  subsidize!
li-   čpptpuišoťý unemployment Insurance ed vbl^tkiry inswriihCe
fi^Ĺ-^kúräu^':
62       THE DEVELOPMENT OF WELFARE STATES
r
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The Development of Welfare States lij tyestem pUfo,^
63

To test the hypothesis in more detail, the whole set of seyenty-UVö Wif»! insurance laws has been subdivided into eight subsets, the ft. WMjJ a« core laws for each of the four social insurance, systems, Til? W^ "effidSts for these subsets are presented in Table 2 5. ThejUjjJ^M regression coefficients show that the gerieral conclusion » for a|l ubsets■ ?2 of the 16 coefficients are clearly positive and the other 4 are Practically zero. In general, these coefficients and the p^cehta^ of explained variance are much lower in relation tp socioeconomic development than in relation to political moblUzatlqti.                                    ,
In Western Europe, the follower societies häye thus introduced social insurance systems at consistently higher levels of political mobilization and at slightly higher and, rather similar levels of socioeconomic development. A similar pattern was earlier found by David Collier and Richard E. Messicklwith' respect to the timing of the adoption of the first »oo«L security program' in" each country. Among the European nations, they found a gv ■ Moderate but consistent tendency" for late adopters to adopt programs at I-     'successively higher levels of modernization as Indicated by the aporforce
fe - M* rik'eViďénce'for a diffusion process "Ují a hierarchy of nations," we
fcí-' ' interpret'tliis-'result as evidence that diffusion processes alone cannot
&Tŕ-'iaccó5iítff'or!,the'establishment! of national social security programs daccourul;i, ,,                    ^ ^ ^ ^^ ^ comse of naUona,
example set by a pioneer country does not apparently social insurance schemes independent zatipn. We there-prerequisites for

*&-
i and political ii)obll »^^»^fSár^ípVíuVon to the analysis of some interna iriíííÄ'soaaffecíiŕity "legislation.
Sli"-',-iMlfv-iŕr;|^í''  ' '
I
'tr

U
'V$TÍfřm^ortmee oj Socioeconomic Develops and fitful 11) Mobilization ,
Do'thresholds of socioeconomic development of political rt|flhÍ|iř|ttlon
exist that mate the establishment of social sectii ity pi pgrarqá highly prpbp-
5? or. even' mandatory? Looking first at the range of «ftp Wnom e
development at the time of adoption, one cat) see that the %« ftWcfit
rankinHountries (Finland 1917, Sweden 1891, Austria lß87( «gating
nf exotic value of Finland 1895) introduced tytlr fi,st f f , h « P co
schemes at a mean level of 5.29 (= 1 n I * U) corresponding to ä Mt flU £
percent"industrialization and 11.5 percent urpanizftljo!■ fit" Ml, M the
hgTest ranking country on the other hand, established Ijf «tt/^mj
between 1906 and 1911 at a level of 5Á percent rtc|tístrlallzítpri (Jjrobab y
th   maximum) and around 60 percent urbanization (a  »Vel reached in
Europe in 1970 only by the Netherlands). With .espect to t^ leVe  of
, Sal mobilization of the working class, the ran* of Vä^tífltt h »»milar
with extreme values at 0 percent and 50 percent of total Vu^i},
^i^i JT.IVĽ. o j n i m
K."
lne ueyevopmeni ui  vy cum c qp^ in  rroeiviu i_,u.uľ"
i.il',r,;,   1 i-.1.',' líľfífl: |
H	ü	.2 1-5	
.2	s	ä 5 ~	
S	.1	"-.II	*«
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ill
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Even if the extreme values are disi cgarded, tjie spread remains very wide. We may thus conclude that the variation in developmental levels at the time of the establishment of social insurance systems is too great to ajlov/ any generalization about thresholds. Of course, it is obvious that predominantly agricultural societies probably will rjibt adopt social insurance systems, just as highly industiialized and urbanized societies will l(áVp Stich schemes. Given the weak explanatory power of (he threshold ponpept \yith respect to single developments, it is important ttt ápalyze whether spcla> economic change and political mobilization cbljtbihö to iilfluetjco srjaltt) insurance introduction.
If this is the case, we would expect that countries thaf introduce Social insurance schemes at i datively low levels of socioecphomíc tícyeltiptfiehť are characterized by relatively high levels of political rriobilizatidf) of the working class pressing for such institutions. Sirnjlarly* countries thflt Introduce social insurance schemes at relatively law levels of political möbi|lza» tion are characterized by relatively high levels of sopioecoriotriio development producing social problems that necessitate the introduction of SUch institutions. In either case, countries introducing social Insurance Schemes at relatively low or relatively high levels of bol h Socioeconomic development and political mobilization, should be the exception, rather thftn the rule.,    '.''j.,;    ■                                            '
■    '11 ! L l
!' 1 'I     !    ' r"[ '
"'      ' ;i -,                               Figure 2.7
' Socioeconomic Change and Pqlitical Mqbjlizntidh ús Influcricus ,--''','!-,     i     on Social Insurance Introduction
%


4m t6ľiťi5äal
iloiílíí'zatlon
t     Z
Regression line of social insurance legislation
Socioeconomic' hBtölöpmenti
iijj.'iTHť scatter1 plot in Figure 2.8 is used to examine this hypothesis. The '' jMhpíižpntal'axis refers to the levels of socioeconomic development, the • r-véíticai axis to; levels of political mobilization, Each point represents the ^introduction of one (or more simultaneous) social Insurance laws at the \' '-respective levels and is marked by the counliy name, the year of introduc-' tionij,and "the type of law. The regression lines show that, in its general formulation,'.the hypothesis must be rejected. With respect to social in-' ' surance legislation, the two developmental dimensions seem to be completely independent.
1
5.S
.6.5
i?. O-

(I x m ■  I = p»v. S°ci°-e=°n™i= Development: Industrialization and Urbanization
d X 0). I  Percentage of Labour Force in Industrial Sector; U - Percentage of Population in Cities
__,,!._ -c._____        JL.  <■    °f 2o-000 + Inhabitants)
cr -n>' *o  S" í1"-"  "  o  S  o - • ... ^ o. s £  í-----:
^ 1  o  v  n        ' v;  <   g   c  <
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m   "f    _►.   w   "B*
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<-*   2. £'  Í3*  3
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" -s»-' d í^ ^
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68 '    THE DEVELOPMENT OF WELFARE STATES
Figure 2.1 Q
Social Insurance Legislation in the Context of Socioeconomic
Development, and Political Mobilization

ill
en  fsj

III
ls<]
B
■i
i
i  !
! I
lil
j1;   .'((ssVjjc'j isiunmioj puB 'jsnepos 'one-™ra0 [epoj joj suoj)33[3 ituo^Ei) m qsej «)o/\ jo.s6e)umjj,()

SSEI3 6iinj°fl si« p uoi)ízitiqoH iMHHoj
I
i'l    Subset
R* m
The Development of Welfare States 1ft Western Europe
69
if ľ

f
Time-Period Mean Level of Mean Level of ,                Socioeconomic      Political
Development    Mobilization
Jffl
I.
II.
III.
1880-1900 1900-1920 1920-
6.12 6.77 7.25
5.3 22.7 38.8
Regression Coefficient
12.07 -13.49 -16,19
Coefficient of Determination
0.85 0,81 0,86
,";Thě'main period of social insurance legislation in each cptlfjty is surrounded byiá'line (dotted lines for countries Vvitti two sUcjt bferJQtlS).
;                                      Figure 2.11
" The Sociopolitical Paths of Social InSi#nce Legis in Three Time-Periods
ilBki-BaBictri   ÍÍÍÍ<N   of
süiööM  d f  íäóaiái iiip^ŕahtia   iegialatiöfl
(Political . .Mobilization
^Simplified,'the three subsets yield the structlne in FígU-fiä 2» 11? P^r pUr argument,1'the middle subset (II) is the central ql^e, since1 íťijiíjíqdoS the ■ main'., sociál-1 insurance legislation periods of five couflttipg (j?lhh}ttd, Sw^ďen;Htaly,'•'.Switzerland, the United Kingdom) in ádcjitípri to two countries with'the'first of two main legislative periods (Belgium, the
: Netherlands)'. .With respect to this group of countries, the differentiated hypothesis'seems'to have some validity. This means that We should here consider the introduction of social insurance schemes as ä fUlictioft of the combineďteffects of growing social problems (socioecotiqirrilo development) and an increasing political pressure (mobilization of the Working
. class).,Although differing widely in levels of Industrialization flild urbani-zationhórfcthé""bhě (hand and political mobilization on the other, these countries'enacted social insurance laws at sirnllar levels of sociopolitical developnien'CWe are not able here to explore the differences ih the interaction of, spciq'eco'ndmic and political develppment in greater detail, An explänáticfiníjjtfiil'probably have to be sought ill the consequences of a "late"
'■'■.Versusi'anft'iearly'.' industrialization arid urbanization (Finland, Sweden, Uťaly1 versus the United Kingdom, Belgium, the Netherlands, Switzerland)
.-«.  ^»^i.  OlAl Ľä
for the mobilization of the working class, but also in the'impact of cultural cleavages upon the labor movement (Switzerland, Belgium, the Netherlands).The plausibility of the differentiated hypothesis for this group of countries is not undermined by the fact that some introduced minor social .i  -insurance schemes earlier (Finland, Sweden, Italy) or later added some | I  laws to supplement the established systems (Sweden, Finland, the Nether-I 'inlands, the United Kingdom).
Hp|K;ýlh:need of explanation, however, are those cases where the main periods >jh are characterized by relatively low or relatively high levels of both develop-; ;| mental dimensions (Subsets I and III). Group I is of special interest, since it i - includes those introductions of social insurance schemes that, compared to ■i1 the central Group II, definitely came "too early." The different slope of its ;  • regression line suggests that the hypothesized, relationship is irrelevant | j|.here.;In the following part, therefore, we shall attempt to explain the ! vi i'.'deviance" of these cases by referring to differences in constitutional developments.
D. The Role of Constitutional Developments
With respect to these early developments, we can hypothesize that the constitutional-dualistic monarchies tended to introduce social insurance schemes earlier (in chronological and developmental time) than theparlia-mentary democracies for several reasons. First, they had a greater need to solidify the loyalty of the working class since they were competing with a growing and hostile labor movement that threatened the legitimacy of the nonparliamentary political regimes. Second, the constitutional-dualistic monarchies had already developed stronger state bureaucracies capable of administering such systems and preserving a paternalistic heritage. Finally, these regimes were dominated by landed interests that were able to shift the costs of social expenditures to the urban upper and middle class by taxes on income and profit and employers' insurance contributions and to the working class itself by indirect taxes and compulsory insurance contributions.
In Ta.ble 2.6, three levels of enfranchisement are distinguished in the vertical axis (0 - 35 percent, 40 - 70 percent, 75 + percent, representing the percentages of the respective male age grpup who could vote), and the two types of regimes are differentiated in the horizontal axis. This produces six different political settings in which the various countries are located for the corresponding years: The period stems from 1883, when the first, law in Germany was enacted, to 1914, excluding the specific impact of World War Í. The first social insurance laws introduced in this period are distinguished according to their importance (major, medium, minor) and relocated with respect to the political setting at the time of their passage. In order to measure the "propensity to introducesocial insurance schemes," a "ratio of locial insurance realization" was calculated by dividing the number of
The Development of Welfare Statb^ iri Western Europe        71
U
IR
*
SS!
A,A
IS
TJ   «y   rj-
II
Hď    „
iř.    n
I V*   Vi
■

\l
w
s;

CTS
TT
ftf Mi
SÉtí.
(n li
S? II
■ř p-
U,
h* a
T*
is
K
§
a-s-s
HÍÍ
iní, i/Liíiij^urmtiii   v-t   WDLr<il\c JiAlBo
actual laws by the number of potential laws, assuming that each country could have introduced four first laws (one in each of the four insurance systems).
Comparing the ratios, the following conclusions may be drawn:
(1)  In subset I, the propensity to introduce social insurance schemes was much higher in the constituďonal-dualištic monarchies (Austria, Denmark, Germany, Sweden) than in the parliamentary democracies. The respective ratios are 69 percent to 18 percent. The difference remains even if one defines the subset in strictly chronological terms as the period until 1901. Here, the ratios are 63 percent to 21 percent. Furthermore, three of the five laws in the category of democracies were enacted in Italy, which poses problems in being classified äs a parliamentary democracy at that time. It was only later, not until 1914, that the democracies compensated for the advance of the authoritarian regimes and narrowed the gap in ratios
■ (80 percent to 76 percent)..
(2)  This difference in the propensity to introduce social insurance schemes seems to be primarily a function of the type of regime and not the level of . enfranchisement. In order to compare the two types of regimes at various levels of enfranchisement properly, one has to weigh the respective ratios of--
factual ;laws to potential laws by the number of years that a country ^remained in the respective category, thus calculating an annual average |:Vatip]pf social insurance realization. The ratios show that at both levels of ff'enfranchisement for :which comparisons can be made (0-30% and 75+% Ij'rnaieisuffrage) the propensity to introduce social insurance was considera-i'bly'higher in authoritarian than in democratic regimes (1.20 to 0.29 and I'l.Olto 0!57). Only the category of parliamentary democracies with 40 to 70 "; percent male suffrage disturbs the picture, but this is because of the heavy "influence of Great Britain that introduced all four systems. If this category .; is combined with the 75 percent and more suffrage, the ratios become 1.01 So 0.37.
v-ill
(3)'In the parliamentary democracies, the extension of suffrage clearly increased the propensity to introduce insurance systems. Although it seems difficult to generalize about a "süffrage threshold," the propensity increased where suffrage was over 50 percent of the male population. In the constitutional-dualistic monarchies, however, the influence of the suffrage level is not clear. On the one hafnd, the ratio is higher in the category with a lower suffrage (1.20to 1.01), while on the other, the countries with a higher level of enfranchisement generally introduced more important and comprehensive systems.
The greater propensity of the constitutional-dualistic monarchies to introduce social insurance schemes is even mare remarkable considering
€■
|the differences in socioecononiic development^ Cftlüvilatirtg the average
flevel-of socioeconomic development for each Category (ttiean lh I X U for P,'all years in which social insurance laws V/ere exacted) shows that parlia-P'mentary democracies introduced social ifisurkt}ße W\ Ofily Uter, but tisu-
^ally also at relatively higher levels of iijdustrJEtlizaÜoti and urbanization:
Constitutionnl-Dualistic Mo^ili-chi^s I        Í>fl)-||(i}iíc|itBíy Dpiilpcracles
Male Suffrage
t«| i Á \Í = 6,22
'   '            7,49
0,72
7.00

m
If the establishment of social irisur^tice syp|.éjqn(§ jjy\\\t ^f\ý iirJojjtörs \n related to constitutional developments, the qiies^rjh'^ jq \yi]Ht |hjltiet1ced the "deviant" group that introduced thijir schemes jjr) tfofc Řeťlocj fjftef 1920 (Subset III in Figure 2.11) remains, In t?prxtfádÍctJ^H fp pdf riyüOtliesia on the combined effects of socioeconomic develo$trieh^ ftnd political rnobjli-' zation, these countries established their insuřáMé Jjj-pgratTis at relatively high levels of both types of problem presstet, jhlš |s especially true for France, to sortie degree for ßelgiurn, hut rpáytjtj 0ti fqr \\\fc Netherlands which falls outside the group.'8                        ,
To explain the láte adoption of sölpjal áécjuí-jty Ift tliese cpühtries, It is probably necessary to consider such variables as gjJVoftíhlělIt Instability and cleavage structures, especially wltjj-iin tjjfe l^prif rhbyerjlgn^ PrčqUetlt government turnovers probably account fqr itylpp $ (fljf F^isncji history of delayed social security legislation^ wnefea^ cfcjs^0til.titig íJléftV ttjjes Would probably help to explain tri>s develpprhertts ijf flö)glt|tr| Htl4 the Netherlands. We! should be awaré, hpwevär, thit §ät£gqrtalng cötlhtries 98 late adopters simply because of the tirfiirt^ of théjr )§'gis|átiptl tti^y bö misleading.' It is very possible that the laggards hi \\\$ eSt^bllshttleht of Insurance systems were in fact pioneers With respecj. to tql frdeqUflcy of protection. Thus, the latecomers may have initiated systems ftt tiigheľ leVels of coverage and/or compensation, whereas the ES^rjy ^doptprs Way have only gradually extended their sphemeS, An analyst^ pf the (uore recent period would therefore require the inclusion of riijiph Wore refttied dependent variables describing the scope, the ieVel and dUWlatt of benefits, and so forth for the systems. To do this for all insur&t]Pe systems here Is impossible, but Chapter 5 attempts to describe aj; leftSt the most recently established system—runemplpyment insuřancé-^-lt} these tertns.
iss.-i. ■:—■--
■ Year-
:.-. GE —--
Table 2.7 Active Members of Occupational Injuries Insurance
_     FI                  DE'
fR
SW
.... 1880 _ 1885-1890 1895. 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970
•-18- 7. 70  28 -81.33.: 75 31 72' 31
87    38
78 y,
75   38
72   37
75   38
-77   38
88   44 90
91    12 100
92    44 96   U 98   «3
9 5 14 8 18 9 - 20 10 25 "ft 27
32  15 30
10 23 19 24 50 -50 54~26 87 42 94 ^5 89 42 94  41
15 6		15	10 5 ~
13 5	8 3		
12 5	8 3	20	13 7
16 6	8 3	40	20
31 13	8 4 15 7	40	20 20
.33 13		50	
29 12	19 9	50	50
29 12	33 16	50	50
30 13	32 16	50	"55
34 15	31 17	-50-	55
34 15	-34 18	50  -	55
42   17
76   30
76    30
77    31
43 21 49 23 56 26 68 J1 75  34
50
50    24
51    24 61 29 60
55
58  29 65  28 70 80
5
10
12    5
15
50
50
50 50 50 "50 50
56  23 66  27 65 65
25  10
27    11
28    11 36 14 47 19 5T 21 41 16 44 18 45
58 23 64 24 67 24 71 26 75
1? 20 22
23    11
24    11 25
56 25	25
51 23	35
55 26	45
57 27	-45
62 29 -	-45
70 32	57 24
73 32	55 23
79 36	60 25
76- 36	-59 24
76 37	60
74 36-	60
1880
1885
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
196a
1965
1970
rs pt:in?eof ^äseäsät,: ä:: äältt^ sr s in "~i °f the *—> ■«* «
Source: HIWE5 archive.                                                                        S      P°P«"tion "srally indicate estimates (or, m a few exceptions, missing population data).
J____employer's liability scheme in effect
_ compulsory insurance system in effect
Table 2.8 Active Members of Public Sickness Insurance
Year
***™,    T«t««IdB«±»«**-«*n«»t* «» «-**1J Bctivepopulation and of the total popuMic*.
lau in subštfcad voluntary scheme in effect
]3y on. afftpülKnry sciiügg in effect
Table 2;?^75r Active Members of Pubiic^Pehsion Insurance
Sias; J^^^s^.rixr^pTř-w?«-*•- °f -** -*-•
under senMewgrant schemes. Source: HIKED archive.                                                       exceptions, missing population data), figures in brackets are beneficiary ratios
L_ la" on subsidized voluntary scheme in effect  ~|_la„ „ co„pulsory scheme j„ effect
Year_______fj_
m
BE
Table 2.10 Active Members of Unemployment Insurance
IT                      All___________SZ_
NE
GE
SW
Year
1680
1885"
1890
1895
1900
1905
1910
-1915-
1920
-1925-193a -"1935 -194Q-
ää&~-1950-1955: 3R60L 1965? -I97tr
0     0
0,    0
0     0 1 1
1-   0
"t.  "1
I_____
2
TT
i
-.9     4
I,    2     '   1Z     6
11 -4-    I    21     9
J, "2   J. 19    "8-
%   -Z   $ "19-   3"
5   2   =:
-—	:-.."3ř
':	ľ-3T3£
i-	Usfcsr
	: 3S -2y
If
5     2
5      9
18      8-
-17      8-
23-43   -I- --25-  H
.5tr 50
•552
:5T-23:
:3Ziř 35^ * 3ř -IT 34 17
34- * 5Sľ-26-
-ms
-60-24 £5 26
11 5 22 9 59- 26 59-Z7 65 -30
-62 "2*
-W 3ft "Tř '3S---TTSr
13   "5	1
-9    4- "	1
-14- -6 _-	1
16    6	2
H5   &	:   -t
5:      í	i    :7
-5-	L-ř
5:-ar ■-ff-zs
7E ZS
3-r
-* -í-:zí: 'irr
38 -"17
25 25
-26 11 -28 "12 ■30;.
-It T -26l"1T 4t 161 4F
■48
30 -35
Í34 16-_Z5-Ti-.25 =30-"
W 3Í -46":Zt 5? 2Í 57 ZS 60 26
I_________
8 -4
"17 -« 28 "43 27 13 26 12 27 3£ "27 13 25  12
n ia
-18    Ý
L_
-44- 2Z -36 18" 45 22 45
43 20 53 26 59 28 62 29 72 32
2    T
7    3
27   12
35   16
37  17
37   18
4Z   ZO 55  27
1880
1885
1890
1895
1900
1905
1910
1915
1920
1925
1930:
1955
1940-
1945
1930
1S55"
1960
1965
WO
Hissing percentage of itepopulÄm usually indicate esbaates .&r, ***-&« »^Uu^^^popiu^ "1    la-^subsäfizedwluntary insurance in effect ~\j3* - a-polsnry insurant in effect
total population.
Notes
9. 10.
H.
See Flora 1974. See Parsons 1971.
See Parsons I960.
Marshall 1965, p. 84.
Marshall 1965, p. 72.
The elements of Rokkan's theory are scattered in various publications. The
most important are:  Lipset and  Rokkan  1?67;  Rokkan  1970; Rokkan,
Saelen, and Warmbrunn' 1973; Rokkan 1974a, 1974b, and !974c.
Rimlinger 1971, p. 59.                           '
For Germany, cf. Andicand Veverka 1964; and V/eitzel 1968; for the United
Kingdom, Peacock and Wiseman 1961; and for Sweden, Hök 1962.
Cf. Perrin 1969.
An indicator of socioeconomic development is constructed by taking the natural logarithm of the product of both percentages: In (I x U). The product instead of the mean is used, because we assume that the impact of medium levels of industrialization and urbanization on the generation of respective social problems is higher than the impact of relatively high industrialization with relatively low urbanization (e.g., Switzerland) or vice versa (e.g., the Netherlands). The raw data can be found in Flora 1975. A major problem lies in the simple addition of the voles for the various parties. Further explanatory attempts will certainly have to account for the relative homogeneity of the labor movement and also to include more indicators-measuring different aspects of the mobilization of the working class. The data on election results have been taken from Mackie and Rose 1974. The following parties have been included:
Social Democrats (1907-1971). Communists (1945-1956). Workers Party/Socialist Party (1894. 1900, 1912, 1919-1971), Liberal-Worker Party Cartels (1894, 1012, 1946, 1950-1958), Communists (1925-1971).
Social Democrats (I884-I97I), Communists (1920-1971), Social Peoples Party (1960-1971). Left Socialists (1968-1971). Social Democrats (1907-1070), Communists (1922-1970), Social Democratic League (1958-1970).
Socialists/Socialist Party (1893-1968), Radical Socialist Party (1967), Independent Socialists/Socialist Republicans (1906-1936), Communists (1924-1968), United Socialist Party (1962-1968).
Social Democrats (l87I-I969),Communists(1920-I953). Independent Socialists (1919-1928).
Socialist Party (I895-I968), Reformist Socialists (I913-I9I9), Independent Socialists (1913-192)), Communists (1921-1968), Social Democrats (1948-1968).
Social Democrats (1888-1967), Communists (1918-1967), Social Party (1918-1925), Revolutionary Socialist Party (1929-1933), Pacifist Socialist Party (1959-1967). Labour Party (189(1-1969), Social Democratic Party (I92I-1924), Communists I924-1969)/Socialist People's Party (1961 -1969).
Social Democrats (1902-1970). Left Socialists (1917-1921), Communists (I921-I970), Socialists (1936-1944).
■■'; Austria: '. ','■ \  -Belgium:
.i;,;n .!'£:   ■
:-i'| -jý;(Denmark:
,:;,.!' Hi'!';-;. J
v."; US' Finland:
ii! Hr"1 i
1      ■ ■    France:
jl  Germany:
i;:i     : Italy:
Netherlands; Norway: Sweden:
¥
Switzerland:    Socia) Democrats (1896-1971), Cotyrntjrtliils (l922-|97t).
United    Independent Labouf Party (J895)ľ Läljfnir party (1900-1970), Kingdom:   Cpmmunists (1922-t97p). '
12.    These age groups have been reconstructed usiijg tlie dat$ of the population censuses and estimating the age distributions for the {htöfeeftSüs years, The raw data on the enfranchised mále pöpillatipp Can b9 fpftid In Kohl 1977.
13.    The data on the political regimes are taketi fföfn yop Beyme 1970. The difficulties of classification haye an institutional &pď B chronological aspect. As to the first, Italy and Switzerland are classiheti a$ parliamentary democra-ciesj although they may be seep as representing a **mixed type" and a "third type" (of directorial democracy). As to the second, (Uíftattltíés arise when the parliamentary responsibility of govern rhent wäá tntroiiuced de facto but not dejure (Norway 1884 and Denmark 1901 Seefn tq be plettr cases, but Sweden 1917 may be disputed): The following classification has been used: (1) constitutionai-dlialistic monarchies: Austria, DJerjhWk Until 190Í, (Finland), Germany.'Norway until 1884, Sweden liyttil Í917; (2) parliamentary democracies: Belgium, Denmark since 19(31, Fŕ^pČ, Uöly (í). Netherlands, Norway since 1884, Sweden Sinpe Í917* Switzprjotid, United Kingdom,
14.    Bendix 1967, p. 331.             ,'                           '   , '      '
15.    For this reason, the analysis by Cphier dti4 Masiek í975 is not very
convincing.
16.    Seventy-two instead of seventy-four la\ýs kre üs^dhuhpfttl&lysis because two laws passed under the fascist regime iri Italy árp éjtclltílecl SlfiPe they could not be classified with respect to' the level bť poUticáj jflgbijlzljilori.
17.    Collier and Messick 1975, p. 1310:                 ' ,
18.    Norway seems to be a special case, sirtee pnépf M tWp1 plftin periods camp "too early" (1906-Q9), and the other "tpfj látej" (jfSilNft! ylítíl feijpect to the combined levels of problem presspré.
References
Andic, Suphan and Veverka, Jindřich. 19U. "The RŕlJWtii p!' íloVetllplept Expenditure in Germany Since'the Unification1." ^i^iátój/y, H,f> ÍÍ\ !ó9>278,
Bendix, Reinhard, 1967,"Traditipn and Modernity fel^fj^^^lj,^ 'CmtfjiflrpUW Studies in Society and History 9: 292-346t          ,
Bey me, Klaus voni 1970. Die parlaineniůriščlien $éM}í\i\0,\^i^iťé ((} tytfo)!Hl,
Munich: Piper. Briggs, Asa. 1961. "The Welfare Státe in rlistpi-icEJl jíě^fl^tiV^I1 gU^fiMHilW
Archiv für Soziologie 2: 221-258. Collier,  David and  Messick. Richard.  J9^3. "Pre|^jtiiMtö!j Verep? fc}|ftiis|on(
Testing Alternative Explanations of Spcial SecpriW Adoption/ /((lířrjert/i ľo*
Utkal Science Review; 69: 1296-1315.      "         ' '   ''' '' ' ' '
Flora,  Peter.   1974!   McHlernisier'ungxfors'chiihg.  £(((' WifiMwhen fiflfl/j'.w der
gesellschaftlichen Entwicklung. Opiaden: WeStďétii.s'lJhe't' Vorlag, Flora. Peter. 1975. "Quantitative Historical pbcjplBj»^"q^j'fflf ^{'/fiMjr.l1 23! 2, Hook, Erik. 1962. Den offentliga sektory é^p.anši^, Jjtt ^Mdli? #V <fy ÓffyfítHga
civilá utgiftemas ütveckelingarén I9,13-ľ9ľ8. Stód'khfj tól Á|rp(ívipt jjittff WJckselK Kohl, Jürgen. 1977. "Elections 1 - Ehfranchlserried \iM ElOtitrJíít  Íf?ítHtíí<tt»t»cíll.M
Hl WED Report No. 6. Cpípgne. Mimeographed;    '     '    "'' Lipset. Seymour M. and Rokkan, Stejn, eds.' lap*?; f%J7,i< s^t'^M Úfiil VV(»t Alignments. New York: Free Press.   '
'   80:      THE DEVELOPMENT OF WELFARE STATES
Mackiei Thomas T. and Rose, Richard. 197^}. The International Almanac of Electoral History. London: Macmillan. Marshall, T. H. 1965. Class, Citizenship, and Social Development. Garden City,
N.Y.: Anchor Books.                                          ,
Parsons, Talcott. 1960. "Durkheim's Contribution to the Theory of Integration of . Social Systems." In Emile Durkheim 1858-1917, ed. K. H. Wolff, pp. 118-153. Columbus: Ohio State University Press.
Parsons, Talcott. 1971. The System of Modern Societies. Englcwood Cliffs. N. J.: Prentice HalL
Peacock, Alan T. and Wiseman, Jack* 1961. The Growth of Public Expenditure in ' tlje United Kingdom. Princeton, N. J.: Princeton University Press.
Perrin, Guy. 1969. "Reflections on Fifty Years of Social Security." International Labour Review 99: 249-292.
Rimlinger, Gaston V. 1971. WelfarelPolicy and Industrialization in Europe, America, and Russia. New York: John! Wiley & Sons.
Rokkan, Stein. 1974a. "Cities, States, and Nations.!' In Building States and Nations, ed. S. N. Eisenstadt and Stein Rokkan, I: 73-97j Beverly Hills. Calif.: Sage.
Rokkan, Stein. 1974b. "Dimensions of State Formation and Nation Building." In The Formation of National Slates in Western Europe, ed. Charles Tilly, pp. 562-600. Princeton, N. J.: Princeton University Press.
Rokkan, Stein. 1974c. "Entries, Voices, Exits: Towards a Possible peneralization of the Hirschman Model." Social Science Information 13: 39-53.
Rokkan, Stein, Saelen, K. and Warmbrunn, J. 1973. "Nation Building." Current Sociology 19: 3.
Weitzel, Otto. 1968. "Die Entwicklung der Staatsausgaben in Deutschland. Eine Analyse der öffentlichen Aktivität in ihrer Abhängigkeit vom wirtschaftlichen Wachstum." Dissertation. Erlangen-Niirnberg.
Wilensky, Harold L. 1975. The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures. Berkeley, Calif.: University of California Press.
Cháptef 3
The Development öf Wtjlf^
in North ^.rnélrtft
Robert T. Kudrle and tl^pd^i R» MftttT}Qř
Introduction
Many discussions of the developrrierit of the V/felftire state haVe contrasted the experience of theýnited States \yith that Of Western Europe. The commonplace claim is that the United Statp \\i$ been a "laggard" in the development of programs found elsewhere, I Variptts factors have been cited as contributing to the difference: the apáfehůo pf feudalism, ä democratic political system that ernergéd prior ftt & iWgö Working class, a relatively low level of status differentiation, ätiji high per capita income.2 The other major North Americaii state, Canada, Has received little attention in the growing comparative literature ph v^eif^řq state policy, In recent years, however, American polity analysts have begun to investigate the Canadian experience to extract pplicy lessons for the United States, This has usually involved areas in wHich policies have been implemented in Canada before peing debated and, introduced in the United States. Other investigators have argued that a more careful lpo|c at Canada can illuminate the past development rjf U.S. public policy.^
Our comparison of Canadian and U.S. welfare ptatc developments will attempt to identify both what unique characteristics distinguish the twp North America countries and what common features set them apůitffom the countries Pf Western Europe, The first sectipn of the paper \vlll place' the introduction of major sPcial programs in an international peispecllve, The second discusses some of the major Canadjajv-^hipt ican differences in