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Efficient and Inefficient Welfare States

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Author Info

  • Algan, Yann

    () (Sciences Po, Paris)

  • Cahuc, Pierre

    () (Ecole Polytechnique, Paris)

  • Sangnier, Marc

    () (University of Aix-Marseille II)

Abstract

This paper shows that cross country differences in the generosity and the quality of the welfare state are associated with differences in the trustworthiness of their citizens. We show that generous, transparent and efficient welfare states in Scandinavian countries are based on the civicness of their citizens. In contrast, the generosity but low transparency of the Continental European welfare states survive thanks to the support of a large share of uncivic individuals who consider that it can be justifiable to misbehave with taxes and social benefits. We also explain why countries with an intermediate degree of trustworthiness of their citizens and of transparency of the government, like Anglo-Saxon countries, have small welfare states. Overall, this paper provides a rationale for the observed persistence of both efficient and inefficient welfare states, as a function of the civicness of the citizens.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5445.

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Length: 47 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5445

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Keywords: welfare state; trust; civism; corruption;

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References

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  1. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
  2. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
  3. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 551-84, August.
  4. Benabou, R. & Ok, E.A., 1998. "Social Mobility and the Demand for Redistribution: The POUM Hypothesis," Working Papers 98-23, C.V. Starr Center for Applied Economics, New York University.
  5. Alberto Alesina & Nichola Fuchs Schuendeln, 2005. "Good bye Lenin (or not?): The Effect of Communism on People's Preferences," NBER Working Papers 11700, National Bureau of Economic Research, Inc.
  6. Angeletos, George-Marios & Alesina, Alberto, 2005. "Fairness and Redistribution," Scholarly Articles 4553009, Harvard University Department of Economics.
  7. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January.
  8. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org.
  9. Andrew CLARK & Emanuela D'ANGELO, 2010. "Upward Social Mobility, Well-being and;Political Preferences: Evidence from the;BHPS," Working Papers 338, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  10. Alberto F. Alesina & Paola Giuliano, 2009. "Preferences for Redistribution," NBER Working Papers 14825, National Bureau of Economic Research, Inc.
  11. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005.
  12. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," Harvard Institute of Economic Research Working Papers 1936, Harvard - Institute of Economic Research.
  13. Fong, Christina M. & Bowles, Samuel & Gintis, Herbert, 2006. "Strong reciprocity and the welfare state," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
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Citations

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Cited by:
  1. Daniel Arnold, 2012. "Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements," IAAEU Discussion Papers 201211, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Ada Ferrer-i-carbonell & Ramos, X. (Xavier), 2012. "GINI DP 38: Inequality and Happiness: A Survey," GINI Discussion Papers 38, AIAS, Amsterdam Institute for Advanced Labour Studies.
  3. Garofalo, Maria Rosaria, 2011. "Il volontariato può sostenere lo sviluppo? Riflessioni metodologiche per la costruzione di un frame work teorico
    [Can the voluntary sector sustain the development path of an economy? Suggestions f    ," MPRA Paper 40008, University Library of Munich, Germany.
  4. Yamamura, Eiji, 2012. "Trust in government and its effect on preferences for income redistribution and perceived tax burden," MPRA Paper 39833, University Library of Munich, Germany.
  5. Fatica, Serena, 2011. "Preferences for redistribution, the size of government and the tax system," MPRA Paper 29782, University Library of Munich, Germany.
  6. Yamamura, Eiji, 2012. "Norm for redistribution, social capital, and perceived tax burden: comparison between high- and low-income households," MPRA Paper 39434, University Library of Munich, Germany.

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