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Explaining the variety of social policy responses to economic crisis: How parties and welfare state structures interact

  • Starke, Peter
  • Kaasch, Alexandra
  • van Hooren, Franca
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    This paper maps and explains the reactions of four welfare states - Australia, Belgium, the Netherlands and Sweden - to three global crisis situations - the oil shocks of the 1970s, the worldwide recession of the early 1990s, and the financial crisis from 2008 onwards. Two main conclusions follow from the analysis: First, using a comprehensive typology of social policy reactions to crises, we show that crisis reactions were surprisingly diverse. There is no uniform policy response, as policies range from retrenchment through non-response to welfare state expansion. Second, explaining the variation regarding expansion vs. retrenchment we focus on the partisan composition of government, and the size of the existing welfare state, which may operate as an important automatic stabilizer during recessions. While none of these factors alone is sufficient, their interaction is able to explain most of the specific social policy responses adopted in the four countries studied.

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    File URL: http://econstor.eu/bitstream/10419/50561/1/670086355.pdf
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    Paper provided by University of Bremen, Collaborative Research Center 597: Transformations of the State in its series TranState Working Papers with number 154.

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    Date of creation: 2011
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    Handle: RePEc:zbw:sfb597:154
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    1. Mathias Dolls & Clemens Fuest & Andreas Peichl, 2009. "Automatic Stabilizers and Economic Crisis: US vs. Europe," CESifo Working Paper Series 2878, CESifo Group Munich.
    2. Alexander Hijzen & Danielle Venn, 2011. "The Role of Short-Time Work Schemes during the 2008-09 Recession," OECD Social, Employment and Migration Working Papers 115, OECD Publishing.
    3. Obinger, Herbert & Starke, Peter & Moser, Julia & Bogedan, Claudia & Gindulis, Edith & Leibfried, Stephan, 2010. "Transformations of the Welfare State: Small States, Big Lessons," OUP Catalogue, Oxford University Press, number 9780199296323, March.
    4. Kittel, Bernhard & Obinger, Herbert, 2002. "Political parties, institutions, and the dynamics of social expenditure in times of austerity," MPIfG Discussion Paper 02/1, Max Planck Institute for the Study of Societies.
    5. Meredith Edwards & Peter Whiteford, 1988. "The Development of Government Policies on Poverty and Income Distribution," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(3), pages 54-73.
    6. Ebbinghaus, Bernhard, 2008. "Reforming Early Retirement in Europe, Japan and the USA," OUP Catalogue, Oxford University Press, number 9780199553396, March.
    7. Pablo AntolĂ­n & Fiona Stewart, 2009. "Private Pensions and Policy Responses to the Financial and Economic Crisis," OECD Working Papers on Insurance and Private Pensions 36, OECD Publishing.
    8. Lars Jonung & Jaakko Kiander & Pentti Vartia, 2008. "The great financial crisis in Finland and Sweden - The dynamics of boom, bust and recovery, 1985-2000," European Economy - Economic Papers 350, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    9. Julia Darby & Jacques Melitz, 2008. "Social spending and automatic stabilizers in the OECD," Economic Policy, CEPR;CES;MSH, vol. 23, pages 715-756, October.
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