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Efficient and Inefficient Welfare States

  • Algan, Yann

    ()

    (Sciences Po, Paris)

  • Cahuc, Pierre

    ()

    (Ecole Polytechnique, Paris)

  • Sangnier, Marc

    ()

    (University of Aix-Marseille II)

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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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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  1. Martin Ljunge, 2011. "The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance," Discussion Papers 11-30, University of Copenhagen. Department of Economics.
  2. R. I. Luttens & M.A. Valfort, 2008. "Voting for redistribution under desert-sensitive altruism," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/531, Ghent University, Faculty of Economics and Business Administration.
  3. Yann Algan & Pierre Cahuc & Andrei Shleifer, . "Teaching Practices and Social Capital," Working Paper 19523, Harvard University OpenScholar.
  4. 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.
  5. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May.
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  14. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January.
  15. 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.
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  17. Donald W.K. Andrews, 1990. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Cowles Foundation Discussion Papers 943, Cowles Foundation for Research in Economics, Yale University.
  18. LUTTENS, Roland Iwan & VALFORT, Marie-Anne, 2008. "Voting for redistribution under desert-sensitive altruism," CORE Discussion Papers 2008053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  19. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005, March.
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