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Efficiency and Effectiveness of Social Spending

  • Herrmann, Peter

    ()

    (Corvinus University of Budapest)

  • Tausch, Arno

    ()

    (University of Innsbruck)

  • Heshmati, Almas

    ()

    (Jönköping University, Sogang University)

  • Bajalan, Chemen S. J.

    ()

    (University of Kurdistan Hawler)

In this qualitative sociological and quantitative economic policy paper, we start out from the assumption of a very recent European Commission Background paper on the “Efficiency and effectiveness of social spending”, which says the effectiveness of social spending can be defined by the degree to which the realized allocation approaches the socially desired outcome. The conclusions listed in the Commission paper are found far reaching and not supported by the empirical data. We perform such an analysis, starting from advances in recent literature. A more encompassing sociological perspective on the issue and factor analytical calculations is presented, which supports our general argument about the efficiency of the Scandinavian model. The social quality approach provides an alternative perspective on welfare system analysis, focusing on public policies rather than social policies. The empirical evidence, suggests that in terms of the efficiency of the European social model, the geography of comparative performance include: the direct action against social exclusion, health and family social expenditures, the neo-liberal approach, and the unemployment benefit centred approach. Applying rigorous comparative social science methodology, we also arrive at the conclusion that in terms of the initial ECOFIN definition of efficiency, the data presented in this article suggest that apart from Finland and the Netherlands, three new EU-27 member countries, especially the Czech Republic and Slovenia, provide interesting answers to the question about the efficiency of state expenditures in reducing poverty rates.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3482.

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Length: 55 pages
Date of creation: May 2008
Date of revision:
Publication status: published in: Wirtschaft und Gesellschaft, 2009, 35(1), 13-43
Handle: RePEc:iza:izadps:dp3482
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References listed on IDEAS
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  1. Andersen, Torben M. & Herbertsson, Tryggvi Thor, 2003. "Measuring Globalization," IZA Discussion Papers 817, Institute for the Study of Labor (IZA).
  2. Karl Aiginger & Alois Guger & Thomas Leoni & Ewald Walterskirchen, 2007. "Reform Perspectives on Welfare State Models in Global Capitalism," WIFO Working Papers 303, WIFO.
  3. Karl Aiginger, 2007. "Performance Differences in Europe: Tentative Hypotheses on the Role of Institutions," WIFO Working Papers 304, WIFO.
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