Governance of Welfare State Reform: A Cross National and Cross Sectoral Comparison of Policy and Politics, by Irene Dingeldey and Heinz Rothgang

Edward Elgar, 2009, vi + 263 pp, hbk 1 84720 143 0, £65

The editors of this diverse and interesting collection of essays have focused on three questions:

  1. ‘How are policies and regulatory structures changing?’
  2. ‘How are the reform processes in different policy areas or countries being shaped?’
  3. ‘Are there signs of convergence or divergence across different welfare state types?’ (pp.1,2)

All three questions are about ‘governance’, which the editors take to mean ‘all existing forms of collective regulation of societal matters, from those based on the state to those based solely on civil society’, thus encompassing both the structures of the system and the processes by which activity is regulated and controlled.

Rothgang (ch.2) finds increasing complexity in healthcare systems in Britain, Germany and the USA. The basic characters of the different systems haven’t changed, but increasing diversity within each system is leading all of them towards greater hybridity. Hippe (ch.3) finds a similar process occurring in pension provision, thus supporting ‘the hybridisation hypothesis, which predicts convergence towards mixed regulatory frameworks based on market mechanisms that stress individual responsibility as well towards social policy structures that promote collective responsibility’ (p.64). Dingeldey (ch.4) finds that the promotion of employability is central to the labour market policies of Denmark, the UK and Germany, and that therefore state intervention in this field is increasing rather than decreasing. Martens and Jakobi (ch.5) study the OECD’s contribution to the formation of education policy in its member countries and conclude that the organisation’s impact is now considerable, and they take this finding as an indicator of the growing influence of such international organisations. Starke and Obinger (ch.6) find that, in many of the same countries, welfare states are converging in relation to a number of indicators: not in a ‘race to the bottom’, as some have suggested, but more often in an ‘upwards’ convergence.

Thus the first section of the book employs research on particular policy areas in order to understand general trends. The second part reverses the process, and asks about the impact of the processes identified on particular policy areas: health, pensions, the labour market, and education.

An interesting point about Gerlinger’s discussion of changes in health insurance systems in Germany, Switzerland and the Netherlands (ch.7) is that the UK couldn’t have been compared in the same way because the universal NHS avoids the need for state regulation of health care insurance. It might have been worth mentioning this. Bonoli’s chapter (ch.8) on trade union involvement in pension reform in Sweden, France, Switzerland, Italy and Germany contains an important lesson for policy-makers: that system change requires deep involvement by such stakeholders. In chapter 9 Cox studies labour market reform in a variety of countries and finds that, where new ideas have been persuasively championed by political parties, coherent reform has taken place; but that where political parties have resisted change, the outcome has been policy drift. In this latter case the result will be that the inevitable adjustment to new ideas will lead to more public discord than it might otherwise have done. Klitgaard finds that greater knowledge of other countries’ educational policies and their outcomes is causing considerable convergence between different countries’ education policies.

The editors offer a final concluding chapter which draws together the conclusions of the different chapters into a picture of continuing diversity within which a few trends are identifiable, and in particular ‘a withdrawal of the state from service provision and a simultaneous extension of the state’s responsibilities for guaranteeing the delivery of an access to services’ (p.250).

We draw another conclusion. A five page discussion of the Netherlands pension system (pp.52-7) gives four lines to the residence-based flat-rate Citizen’s Pension and five pages to the funded industry-based sector. The internal governance of Britain’s NHS is discussed but not its universal provision, which really ought to have been compared with insurance-based healthcare systems. The UK’s Child Benefit doesn’t get a mention, even where it would have been highly relevant (e.g., pp.75-7). The editors and authors clearly regard universal provision as not worth discussing, yet it has been a highly successful welfare system in its own right. It has low administrative costs, it doesn’t contribute to labour market inflexibilities and disincentives, and it doesn’t disincentivise saving for old age. So here is a hypothesis: Universal provision is so successful when implemented that it creates no problems. It is problems, not successes, which demand the attention of policymakers and academics, so universal provision drops off the policy agenda and therefore isn’t considered as an option when welfare reform options are discussed.

We would be interested to hear our readers’ responses to this hypothesis, and suggestions as to how we might solve the dilemma.