The Political Economy of Welfare Reform in the United States, by Mary Reintsma

Edward Elgar, 2007, xi + 220 pp, hbk, 1 84376 133 5, £59.95

The author views the legislative process which led to the enactment of the Personal Responsibility and Work Opportunities Reconciliation Act (PRWORA) in 1996 from two perspectives: 1. the public interest model of government (which assumes that legislators are motivated by what the public needs), and 2. the public choice model (which views legislators as actors with their own rational objectives rather than as servants of a government seeking agreed allocative or distributive ends). A detailed exploration of the legislative process leads to the conclusion that a public choice model best explains the outcome at each stage.

The book starts with a discussion of the welfare provision which PRWORA replaced and, for comparative purposes, of the welfare states of Sweden, the UK and Germany. Early on, the impact of the European Union on European social policy is also discussed. Both the ‘public interest’ and ‘public choice’ models are described, a public choice model of United States governance is constructed, and the history of the United States welfare state (and of its roots in the British system) is outlined. Then follows a detailed history of PRWORA, an institutional analysis (a study of the interest groups which influenced the legislation), and an analysis of welfare caseloads – and in this context Reintsma concludes that ‘the statistical analysis …. provides substantial support for the public choice argument that the influence of interest groups on economic policies such as welfare legislation is both substantial and effective’ (p.192).

This raises a question for anyone interested in tax and benefits reform in the UK. It’s easy to see who might benefit from a system which employs the private sector to provide supervised activity related to a government policy which sees such activity as a method for moving people from unemployment to employment. It is also easy to see that individuals’ work incentives would benefit from a Citizen’s Income and possible to see which interest groups might lose if a Citizen’s Income were to replace Job Seeker’s Allowance and its related programmes. The message of this book is that it isn’t the desirability or the feasibility of a policy that counts. What matters is which interest groups might gain from the proposed social policy change.