TheWelfare

StateReacler
Second Edition
Edited by
ChristopherPierson
andFrancisG.Castles
polity
S.U.B. Secci d'&:onIJUqul.: J

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ThreeWorldsofWelfare
Capitalism
GfJsta Esping-Andersen
WhatIs theWelfareState?
Everytheoreticalparadigmmustsomehowdefinethewelfarestate. How
doweknowwhenandifawelfarestaterespondsfunctionallytotheneeds
ofindustrialism,ortocapitalistreproductionandlegitimacy?Andhowdo
weidentifyawelfarestatethatcorrespondstothedemands thatamobil-
ized working class might have? We cannot test contending arguments
unlesswehave acommonlysharedconceptionofthephenomenontobe
explained.
Aremarkableattributeoftheentireliteratureisitslackofmuchgenuine
interestin thewelfarestateas such.Welfarestatestudieshave beenmotiv-
atedbytheoreticalconceroswithotherphenomena,suchas power,indus-
trializationorcapitalistcontradictions;thewelfarestateitselfhasgenerally
received scant conceptual attention. If welfare states differ, howdo they
differ? And when, indeed, is astate a welfare state? This turos attention
straightbacktotheoriginalquestion:whatis thewelfarestate?
Acommontextbookdefinitionisthatitinvolvesstateresponsibilityfor
securingsornebasicmodicumofwelfareforitscitizens.Suchadefinition
skirtstheissueofwhethersocialpoliciesareemancipatoryornot;whether
they help system legitimation ornot; whetherthey contradictoraid the
market process; and what, indeed, is meant by 'basic'? Would it not be
moreappropriatetorequireofawelfarestatethatitsatisfiesmorethanour
basicormini malwelfareneeds?
Thefirstgenerationofcomparativestudiesstartedwiththistypeofcon-
ceptualization. They assumed, withoutmuch reflection, thatthe level of
socialexpenditureadequatelyreflectsastate'scommitmenttowelfare.The
theoreticalintentwas notreallytoarriveatanunderstandingofthewelfare
state, but rather to test the validity of contending theoretical models in
Gesta Esping-Andersen
political.economy.Byscoringnationswithrespee
economICgrowth,andtheproportionofagedinti
itwas believedthattheessentialfeatures ofindm
properly considered. Alteroatively, power-orie
nationsonleft-partystrengthorworking-classp
Thefindingsofthefirst-generationcomparati,
ate, sineethereis noconvincingcaseforanypar
age of nations for comparisons statistically
variablesthatcanbetestedsimultaneously.Thus
Wilensky (1975) find that eeonomic level, w
bureaucratic eorrelates, explains most welfare
countries', relevant measures ofworking-class r
opennessarenotincluded.Theirconclusionsinf
trialism'viewarethereforeindoubt.And,wher
(1979), Korpi (1983), Myles (1984) and EspiJ
strongevidenceinfavourofaworking-classmo
Sehmidt (1982, 1983) finds supportfor a neo-(
(1978) for an economic openness argument, il
againstplausiblealteroativeexplanations.
Mostofthesestudiesclaimtoexplainthewelf.
spendingmay be misleading. Expendituresare(
oretical substanceofwelfarestates.Moreover,ti
(moreorless power, democracy orspending)CI
notion that power, democracy or welfare are
phenomena. By seoring welfare states on sper
spending counts equal1y. But sorne welfare sta
example,spendalargeshareonbenefitstoprivi
normallynotwhatwewouldconsideracommi
and solidarity. Others spend disproportionate
assistance. Fewcontemporaryanalystswouldal
relieftraditionqualifiesasawelfare-stateeommi
enormous sums on fiscal welfare in the form (
insuranceplansthatmainlybenefitthemiddlee'
ditures do not show up on expenditure aCCOUJ
expenditure [grew] during the Thatcherpeno
e
sively afunction ofvery highunemployment.
programmes maysignify awelfare statemore5
employment.
Therboro(1983)is rightwhenheholdsthat
ceptionofstatestrueture.Whataretheentena"
whether and when astateis awelfarestate?1
tothis Therborn'sproposa!isto.begi
formation of state activities. Minimally, iD a
majority of its daily routine activities must b
...
r
fWelfare
dersen
ehowdefine thewelfarestate. How
terespondsfunctionaIlytotheneeds
,ductionandlegitimacy?Andhowdo
spondsto thedemands thatamobil-
: cannot test comending arguments
:onceptionofthephenomenon tobe
:literatureisitslackofmuchgenuine
Telfarestatestudieshavebeenmotiv-
erphenomena,suchaspower,indus-
>; the welfarestate itse!f hasgenerally
[f we!fare states diHer, howdo they
1 we!fare state? This turns attention
whatis thewe!farestate?
latitinvolvesstateresponsibilityfor
areforitscitizens.Suchadefinition
esareemancipatoryornot;whether
whetherthey contradictoraid the
meant by 'basic'? Would it not be
restatethatitsatisfiesmorethanour
>tudiesstartedwiththistypeofcon-
It much refiection, that the leve! of
l state'scommitmenttowelfare.The
re atanunderstandingofthewelfare
f contending theoretical mode!s in
-
G0sta Esping-Andersen
161
politicaleconomy.Byscoringnationswithrespecttourbanization,leve!of
economicgrowth,andtheproportionofagedinthedemographicstructure,
itwas be!ievedthattheessentialfeatures ofindustrialmodernizationwere
properly considered. Ahernatively, power-oriented theories compared
nationsonleft-partystrengthorworking-c1asspowermobilization.
Thefindingsofthefirst-generationcomparativistsaredifficulttoevalu-
ate, sincethereis noconvincingcaseforanyparticulartheory.Theshort-
age of nations for comparisons statisticaIly restricts the number of
variables thatcanbetestedsimultaneously.Thus,whenCutright(1965)or
Wilensky (1975) find that economic leveI, with its demographic and
bureaucratic corre!ates, explains most welfare-state variations in 'rich
countries', re!evant measures ofworking-c1ass mobilizationoreconomic
opennessarenotincluded.Theirconclusionsinfavourofa'logicofindus-
trialism'viewarethereforeindoubt.And,whenHewitt(1977),Stephens
(1979), Korpi (1983), Myles (1984) and Esping-Andersen (1985) find
strongevidenceinfavourofaworking-classmobilizationthesis, orwhen
Schmidt (1982,1983) finds support for a neo-corporatist, and Cameron
(1978) for an economic openness argument, it is without fuIly testing
againstplausiblealternativeexplanations.
MostofthesestudiescIaimtoexplainthewelfarestate.Yettheirfocuson
spending may bemisleading. Expendituresareepiphenomenaltothe the-
oretical substanceofwe!farestates.Moreover,thelinearscoringapproach
(moreorless power, democracy orspending) contradicts thesociological
notion that power, democracy or welfare are rclational and structured
phenomena. By scoring welfare states on spending, we assume that alI
spending counts equaIly. But some welfare states, the Austrian one, for
example,spendalargeshareonbenefitstoprivilegedcivil servants.Thisis
normallynotwhatwewouldconsideracommitmenttosocial citizenship
and solidarity. Others spend disproportionate!y on means-tested social
assistance. Fewcontemporaryanalystswouldagree thatareformedpoor-
rdieftraditionqualifiesasawelfare-statecommitment.Somenationsspend
enormous sums on fiscal welfare in the form oftax privileges to private
insuranceplansthatmainlybenefitthemiddlecIasses.Butthesetaxexpen-
ditures do not show up on expenditure accounts. InBritain, total social
expenditure[grew] during the Thatcher period, yet this is almost excIu-
sively afunction ofvery high unemployment. Lowexpenditureonsome
programmesmaysignify awelfarestatemoreseriouslycommittedtofuIl
employment.
Therborn(1983) is rightwhenhe holdsthatwemustbeginwithacon-
ceptionofstatestructure.Whatarethecriteriawithwhichweshouldjudge
whether, andwhen, astate is awelfare state? Thereare three approaches
tothisquestion.Therborn'sproposalis tobeginwiththehistoricaltrans-
formation of state activities. MinimaIly, in a genuine welfare state the
majority ofits daily routine activities must be devoted to servicing the
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Gesta E
162 Three Worlds ofWelfare Capitalism "
social rights are given the legal :
wdl.con"ci>01honhold,. ha.<faH,,<hing'"""qu'n<es.0, ': '
theyareinviolable,andiftheyare
If weslmplymeasureroutmeactlvltymtermsofspendmgandpersonnel,.'
thanperformance, theywill ent.
the result is thatnostatecan be regarded as a real welfare state until the ::;'!
individualsvis-a-vis themarket.
1970s, and sorne thatwe normallylabel as welfarestates will notqualify ,,'
involvessocialstratification:one
because the majority oftheirroutine activities concern defence, law and
even replace,one'sclassposition
order,administrationandthelike(Therborn, 1983). Socialscientists have
The welfare state cannot be
beentooquicktoacceptnations'self-proclaimedwelfarestatestatus.They
grants.We mustalsotakeintoal
have also been too quick to conclude that if the standard social pro-
with the market's and thefamil
grammeshavebeenintroduced,thewelfarestatehas beenborn.
threemain principies thatneed
ThesecondconceptualapproachderivesfromRichardTitmuss's(1958)
specificationofthewelfarestate
classicaldistinctionbetweenresidualandinstitutionalwelfarestates.Inthe
former, the state assumes responsibility only when the family or the
marketfails; itseeks to limitits commitments to marginal and deserving
Rights and De-commodifi(
social groups. The latter model addresses the entire population, is uni-
versalistic, and embodies an institutionalized commitment to welfare. It
Inpre-capitalistsocieties,few'\'\
will, inprincipie, extendwelfarecommitmentstoall areas ofdistribution
sensethattheirsurvivalwasconl
vitalforsocietalwelfare.
It is as marketsbecomeunivers
The Titmussapproachhasfertilizedavariety of newdevelopmentsincom-
viduals comes to depend entire
parativewelfarestateresearch(Korpi, 1980;Myles, 1984; Esping-Andersen
the institutional layers that gu
andKorpi,1984, 1986;Esping-Andersen,1985,1987).1tisanapproachthat
labourcontractmeantthatpeo
forcesresearchestomove fromtheblackboxof expenditures to the content of
ductionofmodernsocialright!
welfarestates: targetedversusuniversalisticprogrammes,theconditionsof
ity status. De-commodificatiol
eligibility,thequalityofbenefitsandservices,and,perhapsmostimportantly,
matter of right, and when a 1
the extent to whichemploymentandworkinglife are encompassedin the
relianceonthemarket.
state'sextensionofcitizenrights.Theshifttowelfarestatetypologiesmakes
Themerepresenceofsocial:
simplelinearwelfarestaterankingsdifficulttosustain.Conceptually,weare
bring about significant de-con
comparingcategoricallydifferenttypesofstate.
emancipateindividualsfromm
The third approach is to theoretically select the criteria on which to
will possibly offer asafety nel
judgetypesofwelfarestate.Thiscanbedonebymeasuringactualwelfare
associatedwithsocialstigma,ti
statesagainstsorneabstractmodelandthenscoringprogrammes,orentire
desperatetoparticipateinthe1
welfarestates, accordingly(Myles, 1984). Butthis is ahistorical, anddoes
nineteenth-century Poor Law:
notnecessarilycapturetheidealsordesignsthathistoricalactorssoughtto
early social-insurance prograr
realizeinthestrugglesoverthewelfarestate.If ouraimistotestcausalthe-
mizelabour-marketperformat
oriesthatinvolveactors,weshouldbeginwiththedemandsthatwereactu-
Thereis nodoubtthatde-cc
ally promoted by those actors that we deem critical in the history of
issueinwelfarestatedevelopm
welfarestatedevelopment.It is difficulttoimaginethatanyonestruggled
When workers are completel
forspendingperse.
mobilizeforsolidaristiCaction.
ities,divisionsemergebetween
mentformationdifficult.De-c
A Re-specification of the Welfare State
weakenstheabsolute
thatemployershavealwaysOf
FewcandisagreewithT. H.Marshall's(1950)propositionthatsocialciti-
De-commodified rights are
zenshipconstitutesthecoreideaofawelfarestate. Buttheconceptmust
welfarestates. Insocial-assist.
be fleshed out. Above all, itmustinvolve the grantingofsocial rights. If
1
,
reachingconsequences.
"
endingandpersonne1,
we1fare stateuntil th
e
stateswill notqualify
cern defence, law and
). Socialscientists have
elfarestatestatus.They
ie standard social pro-
s beenborn.
chardTitmuss's(1958)
alwelfarestates.Inthe
en the family or the
arginal and deserving
're population, is uni-
itment to welfare. Ir
fU areas ofdistribution
vdevelopmentsincom-
1984; Esping-Andersen
). Irisanapproachthat
iiturestothecontentof
lmes, theconditionsof
hapsmostimportantly,
re encompassedin the
statetypologiesmakes
l.Conceptually,weare
criteria on which to
asuringactualwe!fare
)rogrammes,orentlre
;ahistorical, anddoes
)ricalactorssoughtto
mistotestcausalthe-
nandsthatwereactu-
cal in the history of
hatanyonestruggled
itionthatsocialciti-
;uttheconceptmust
19 ofsocial rights. If
Gesta Esping-Andersen
163
social rights are given the legal and practical status ofpropertyrights, if
theyareinviolable,andiftheyaregrantedonthebasisofcitizenshiprather
thanperformance, theywill entail a de-commodificationofthestatus of
individualsvis-a-vis themarket.Buttheconceptofsocialcitizenshipalso
involvessocialstratification:one'sstatusas acitizenwillcompetewith,or
evenreplace, one'sclassposition.
The we!fare state cannot be understood just in terms of the rights it
grants.Wemustal sotakeintoaccounthowstateactivitiesareinterlocked
with the market's and thefamily's role in social provision. Theseare the
threemainprincipies thatneed t be fleshed outpriorto any theoretical
specificationofthewe!farestate.
Rights and De-commodification
Inpre-capitalistsocieties,fewworkerswereproperlycommoditiesinthe
sensethattheirsurvivalwascontingentuponthesaleoftheirlabourpower.
Iris as markets becomeuniversalandhegemonicthatthewelfareofindi-
viduals comes to depend entirely onthecash nexus. Strippingsociety of
the institutional layers that guaranteed social reproduction outside the
labourcontractmeantthatpeoplewerecommodified. Inturn, theintro-
ductionofmodernsocialrights implies alooseningofthepurecommod-
ity status. De-commodification occurs when a service is rendered as a
matter of right, and when a person can maintain a live!ihood without
re!ianceonthemarket.
Themerepresenceofsocialassistanceorinsurancemaynotnecessarily
bring about significant de-commodification if they do not substantially
emancipateindividualsfrommarketdependence.Means-testedpoorrelief
will possibly offera safety net oflast resort. Butifbenefits are lowand
associatedwithsocialstigma,thereliefsystemwillcompe!aH butthemost
desperatetoparticipateinthemarket.Thiswasprecise!ytheintentofthe
nineteenth-century Poor Laws in most countries. Similarly, most ofthe
early social-insurance programmes were de!iberate!y designed to maxi-
mizelabour-marketperformance.
Thereis nodoubtthatde-commodificationhas beenahugely contested
issueinwelfarestatedevelopment.Forlabour,ithasalwaysbeenapriority.
When workers are complete!y market-dependent, they are difficult to
mobilizeforsolidaristicaction.Sincetheirresourcesmirrormarketinequal-
ities,divisionsemergebetweenthe'ins'andthe'outs',makinglabour-move-
mentformationdifficult.De-commodificationstrengthenstheworkersand
weakenstheabsoluteauthorityoftheemployer.Iris forexactlythisreason
thatemployershavealwaysopposedde-commodification.
De-commodified rights are differentially developed in contemporary
welfarestates. Insocial-assistancedominatedwe!farestates, rights are not
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G0sta Esping-Andersen . \ . J',
164 Three Warlds af Welfare Capitalism
so much attached to work performance as to demonstrable need. Needs-
tests and typica11y meagre benefits, however, service to curtail the de-
commodifying effect. Thus, in nations where this model is dominant
(mainly in the Anglo-Saxon countries), the result is actua11y to strengthen
the market since a11 but those who fail in the market wi11 be encouraged to
contract private-sector welfare.
A second dominant model espouses compulsory state social insurance
with fairly strong entitlements. But again, this may not automatica11y secure
substantial de-commodification, since this hinges very much on the fabric
of eligibility and benefi t rules. Germany was the pioneer of social insurance,
but over most of the [twentieth century] can hardly be said to have brought
about much in the way of de-commodification through its social pro-
grammes. Benefits have depended almost entirely on contributions, and
thus on work and employment. In other words, it is not the mere presence
of a social right, but the corresponding rules and preconditions, which
dictate the extent to which welfare programmes offer genuine alternatives
to market dependence.
The third dominant model of welfare, namely the Beveridge-type citi-
zens' benefit, may, at first glance, appear the most de-commodifying. It
offers a basic, equal benefit to a11, irrespective of prior earnings, contrib-
utions or performance.1t may indeed be a more solidaristic system, but not
necessarily de-commodifying, since only rarely have such schemes been
able to offer benefits of such a standard that they provide recipients with a
genuine option to working.
De-commodifying welfare states are, in practice, fairly recento A
minimal definition must entail that citizens can freely, and without poten-
tial loss of job, income or general welfare, opt out of work when they
themselves consider it necessary. With this definition in mind, we would,
for example, require of a sickness insurance that individuals be guaranteed
benefits equal to normal earnings, and the right to absence with minimal
proof of medical impairment and for the duration that the individual deems
necessary. These conditions, it is worth noting, are those usua11y enjoyed
by academics, civil servants and higher-echelon white-co11ar employees.
Similar requirements would be made of pensions, maternity leave, parental
leave, educationalleave and unemployment insurance.
Sorne nations have moved towards this level of de-commodification, but
only recently, and, in many cases, with significant exemptions. In almost
a11 nations, benefits were upgraded to nearly equal normal wages in the late
1960s and early 1970s. But in sorne countries, for example, prompt medical
certification in case of i11ness is sti11 required; in others, entitlements
depend on long waiting periods of up to two weeks; and in sti11 others, the
duration of entitlements is very short. [ ... ] The Scandinavian welfare
states tend to be the most de-commodifying; the Anglo-Saxon the least.
The Welfare State as a System of StratificatiOll
Despite the emphasis given to it in both classical political
T. H. Marsha11's pioneering work, the relationship betweel
social.class has. been e g l e ~ t e both theoretica11y and empil
speaklllg, the lssue has eaher been assumed away (it ha
granted that the welfare state creates a more egalitarian s
been approached narrowly in terms of income distributi.
whether education promotes upward social mobility. A
tion, it seems, is what kind of stratification system is pn
policy. The welfare state is not just a mechanism that intel"'
sibly corrects, the structure of inequality; it is, in its own
stratification. It is an active force in the ordering of social
Comparatively and historica11y, we can easily idf
systems of stratification embedded in welfare states. Thf
ition, and its contemporary means-tested social-assista1:
conspicuously designed for purposes of stratification. 1
stigmatizing recipients, it promotes social dualisms and 1
a chief target of labour-movement attacks.
The social-insurance model promoted by conservative
Bismarck and von Taffe was also explicitly a form 01
sought, in fact, to achieve two simultaneous results in ti
tion. The first was to consolidate divisions among wagf
lating distinct programmes for different class and status
its own conspicuously unique set of rights and pri'
designed to accentuate the individual's appropriate st
second objective was to tie the loyahies of the individl
monarchy or the central state authority. This was Bisma
he promoted a direct state supplement to the pension l
corporatist model was pursued mainly in nations s
Austria, Italy and France, and often resulted in a labyr
cific insurance funds.
Of special importance in this corporatist tradition Wal
of particularly privileged welfare provisions for the civil
In part, this was a means of rewarding loyalty to the statl
a way of demarcating this group's uniquely exalted soc
poratist status-differentiated model springs mainly froIT
ition. The neo-absolutist autocrats, such as Bismarck, s;
a means to combat the rising labour movements.
The labour movements were as hostile to the corpor
were to poor relief - in both cases for obvious reasoos.
first espoused by labour were no less problematic froIl
of uniting the workers as one solidaristic class. Alm
model that labour first pursued was that of self-organi
zc
164
Three Worlds 01 Welfare Capitalism
so much attached to workperformance as to demonstrable need. Needs-
tests and typically meagre benefits, however, service to cunail the de-
commodifying effect. Thus, in nations where this model is dominant
(mainly intheAnglo-Saxoncountries), theresultis actuallytostrengthen
themarketsinceall butthosewhofai! inthemarketwill be encouragedto
contractprivate-sectorwelfare.
A second dominantmodel espouses compulsorystate social insurance
withfairlystrongentitlements.Butagain,thismaynotautomaticallysecure
substantialde-commodification,sincethishinges verymuchon thefabric
ofeligibilityandbenefitrules.Germanywasthepioneerofsocialinsurance,
butovermostofthe[twentiethcentury]canhardlybesaidtohavebrought
about much in the way of de-commodification through its social pro-
grammes. Benefits have depended almost entirely on contributions, and
thusonworkandemployment.Inotherwords,itisnotthemerepresence
of a social right, but the corresponding rules and preconditions, which
dictatethe extenttowhichwelfareprogrammesoffergenuine alternatives
tomarketdependence.
Thethirddominantmodel ofwelfare, namely theBeveridge-typeciti-
zens' benefit, may, at first glance, appear the most de-commodifying. It
offers a basic, equal benefitto all, irrespectiveofpriorearnings, contrib-
utionsorperformance.1tmayindeedbeamoresolidaristicsystem,butnot
necessarily de-commodifying, since only rarely have such schemes been
abletoofferbenefitsofsuchastandardthattheyproviderecipientswitha
genuineoptiontoworking.
De-commodifying welfare states are, in practice, fairly recento A
minimaldefinitionmustentailthatcitizenscanfreely, andwithoutpoten-
tial loss ofjob, income orgeneral welfare, opt out ofwork when they
themselvesconsideritnecessary. With thisdefinitioninmind, we would,
forexample,requireofasicknessinsurancethatindividualsbeguaranteed
benefits equal tonormal earnings, and the right toabsencewithminimal
proofofmedicalimpairmentandforthedurationthattheindividualdeems
necessary. Theseconditions,itis worthnoting,are thoseusuallyenjoyed
by academics, civil servants and higher-echelon white-collar employees.
Similarrequirementswouldbemadeofpensions,maternityleave,parental
leave, educationalleaveandunemploymentinsurance.
Sornenationshavemovedtowardsthislevelofde-commodification,but
onlyrecently, and, in manycases, withsignificantexemptions. Inalmost
allnations,benefitswereupgradcdtonearlyequalnormalwagesinthelate
1960sandearly1970s.Butinsornecountries,forexample,promptmedical
certification in case of illness is still required; in others, entitlements
dependonlongwaitingperiodsofuptotwoweeks;andinstillothers,the
duration ofentitlements is very shon. [ ...] The Scandinavian welfare
statestendtobethemostde-commodifying;theAnglo-Saxontheleast.
.-.

1
11
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Costa Esping-Andersen
165
111
The Welfare State as a System of Stratification
,111
Despitethe emphasis giventoitin bothclassicalpoliticaleconomyandin
111
T. H.Marshall'spioneeringwork,therelationshipbetweencitizenshipand
socialclasshasbeenneglectedboththeoreticallyandempirically.Generally
11
speaking, the issue has either been assumed away (it has been taken for
111 11
granted that the welfare state creates a more egalitariansociety), orit has
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beenapproachednarrowlyin terms ofincome distributionorinterms of 11 1/
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whethereducation promotes upwardsocial mobility. A more basic ques- 1,' , 1
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tion, itseems, is what kind ofstratification system is promotedbysocial
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policy. Thewelfare stateis not justa mechanism thatintervenesin,andpos-
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siblycorreets,thestructureofinequality;itis, inits ownright,asystemof
1 1 stratification.Itis an activeforce intheorderingofsocialrelations. IIII!
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Comparatively and historically, we can easily identify alternative
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systemsofstratificationembeddedinwelfarestates.Thepoor-relieftrad-
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ition, and its contemporary means-tested social-assistance offshoot, was
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conspicuouslydesigned for purposes ofstratification. Bypunishing and
stigmatizingrecipients,itpromotessocialdualismsandhasthereforebeen
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achieftargetoflabour-movementattacks.
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The social-insurance modelpromoted by conservative reformers such as
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Bismarck and von Taffe was also explicitly a form of class politics. It
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sought, infact, to achieve twosimultaneousresults interms ofstratifica-
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tion. Thefirstwas toconsolidatedivisions amongwage-earners bylegis-
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1
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latingdistinctprogrammesfordifferentclassandstatusgroups,eachwith
11 ,1 1;
its own conspicuously unique set of rights and privilege which was
ill .
designed to accentuate the individual's appropriate station in life. The
second objective was to tie the loyalties ofthe individual directly tothe
1
1 : 1 1
monarchyorthecentralstateauthority.ThiswasBismarck'smotivewhen
1
:1 ,1
hepromotedadirectstatesupplementtothepensionbenefit. Thisstate- 1
11 '11
1
corporatist model was pursued mainly in nations such as Germany,
1" "
Austria, ItalyandFrance, and oftenresulted inalabyrinthofstatus-spe-
.
:11 '1 I
IIIIII
cificinsurancefunds.
1
Ofspecialimportanceinthiscorporatisttraditionwastheestablishment
1
1
'1 1 I
I1
1 I
ofparticularlyprivilegedwelfareprovisionsforthecivilservice(Beamten).
I,
Inpan,thiswasameansofrewardingloyaltytothestate,andinpanitwas
Ir
1
1
awayofdemarcatingthis group'suniquelyexaltedsocialstatus.Thecor-
11111, 1
poratiststatus-differentiatedmodelspringsmainlyfromtheoldguildtrad-
1
1 11 1'
'1 ition.Theneo-absolutistautocrats,suchasBismarck,sawinthistradition ,
1
1
1 1
ameanstocombattherisinglabourmovements.
1
1
l"
Thelabourmovementswereas hostiletothecorporatistmodel as they
1
IIIII
weretopoorrelief- inbothcasesforobviousreasons.Yetthealternatives
'1 1 1
first espousedbylabourwerenoless problematicfrom thepointofview
111
of uniting the workers as one solidaristic class. Almost invariably, the
modelthatlabourfirstpursuedwasthatofself-organizedfriendlysocieties
1: 11
1I1
166
'","
Three Worlds o[ Wel[are Capitalism
or equivalent union- or party-sponsored fraternal welfare plans. This is not
surprising. Workers were obviously suspicious of reforms sponsored by a
hostile state, and saw their own organizations not only as bases of class
mobilization, but also as embryos of an alternative world of solidarity and
justice; as a microcosm of the socialist haven to come. Nonetheless, these
micro-socialist societies often became problematic class ghettos that
divided rather than united workers. Membership was typically restricted
to the strongest strata of the working class, and the weakest - who most
needed protection - were most likely excluded. In brief, the fraternal
society model frustrated the goal uf working-class mobilization.
The socialist 'ghetto approach' was an additional obstacle when social-
ist parties found themselves forming governments and having to pass the
social reforms they had so long demanded. For political reasons of coal-
ition-building and broader solidarity, their welfare model had to be recast
as welfare for 'the people'. Hence, the socialists carne to espouse the prin-
cipIe of universalism; borrowing from the liberals, their programme was,
typically, designed along the lines of the democratic fIat-rate, general
revenue-financed Beveridge model.
As an alternative to means-tested assistance and corporatist social insur-
ance, the universalistic system promotes equality of status. All citizens are
endowed with similar rights, irrespective of class or market position. In
this sense, the system is meant to cultivate cross-class solidarity, a solidar-
ity of the nation. But the solidarity of fIat-rate universalism presumes a his-
torically peculiar class structure, one in which the vast majority of the
population are the 'little people' for whom a modest, albeit egalitarian,
benefit may be considered adequate. Where this no longer obtains, as
occurs with growing working-class prosperity and the rise of the new
middle classes, fIat-rate universalism inadvertently promotes dualism
because the better-off turn to private insurance and to fringe-benefit bar-
gaining to supplement modest equality with what they have decided are
accustomed standards of welfare. Where this process unfolds (as in Canada
or Great Britain), the result is that the wonderfully egalitarian spirit of uni-
versalism turns into a dualism similar to that of the social-assistance state:
the poor rely on the state, and the remainder on the market.
It is not only the universalist but, in fact, all historical welfare state models
which have faced the dilemma of changes in class structure. But the response
to prosperity and middle-class growth has been varied, and so, therefore, has
been the outcome in terms of stratification. The corporatist insurance tradi-
tion was, in a sense, best equipped to manage new and loftier welfare-state
expectations since the existing system could technically be upgraded quite
easily to distribute more adequate benefits. Adenauer's 1957 pension reforrn
in Germany was a pioneer in this respecto Its avowed purpose was to restore
status differences that had been eroded because of the old insurance system's
incapacity to provide benefits tailored to expectations. This irdid simply by
Gesta Esping-Ande
moving from contribution-to earnings-gradu
the framework of status-distinctiveness.
In nations with either a social-assistance l
type system, the option was whether to aBe
furnish adequacy and satisfy middle-class
models emerged from this political choice. TI
and most of the Anglo-Saxon world was to F
universalism in the state, and allow the mal
social strata demanding superior welfare. I
such groups, the dualism that emerges is not
market, but also between forms of welfare-st
one of the fastest growing components of pl
dies for so-called 'private' welfare plans. Anl
the erosion of middle-class support for whal
tic public-sector transfer system.
Yet another alternative has been to seek a
adequacy outside the market. This road ha
where, by mandating or legislation, the state
classes within a luxurious second-tier, un
related insurance scheme on top of the fIat-
examples are Sweden and Norway. By gual
expectations, this solution reintroduces bene
blocks off the market. It thus succeeds in rel
therefore, the degree of political consensus rl
solidaristic support for the high taxes thal
demands.
Welfare State Regimes
As we survey international variations in SI
stratification, we will find qualitatively dif
state, market and the family. The welfare sta1
fore not linearly distributed, but clustered b
In one cluster we find the 'liberal' weHaJ'l
assistance, modest universal transfers or lJl
predominate. Benefits cater mainly to ciA
working-class, state dependants. In tbist.
reform has been severely circumscribed by'
norms: it is one where the limits of w....~
to opt for welfare instead of work. ~
and often associated with stigma; e ~
state encourages the market, either, pIiIII".I
minimum - or actively - by subsidiz....
,4 ..

Welfare Capitalism
oredfraternalweifareplans.Thisisnot
suspiciousofreforms sponsoredbya
ganizations notonlyas bases ofclass
fanalternativeworldofsolidarityand
listhaven tocome. Nonetheless,these
ame problematic class ghettos that
.Membershipwas typical1y restricted
ngclass, and the weakest- who most
kely excluded. In brief, the fraternal
working-classmobilization.
as anadditionalobstaclewhensocial-
ggovernmentsandhaving to pass the
anded. Forpolitical reasons ofcoal-
y, theirwelfaremodelhadto berecast
hesocialistscarnetoespousetheprin-
omtheliberals, theirprogrammewas,
of the democratic fIat-rate, general
assistanceandcorporatistsocialinsur-
otesequalityofstatus.Al1 citizensare
)ective ofclass ormarketposition. In
lltivatecross-classsolidarity,asolidar-
)ffIat-rateuniversalismpresumesahis-
me in which the vast majority of the
:>r whom a modest, albeit egalitarian,
te. Where this no longer obtains, as
s prosperity and the rise of the new
ism inadvertently promotes dualism
:e insuranceandtofringe-benefit bar-
tlity withwhatthey have decided are
herethisprocessunfolds(asinCanada
ewonderful1yegalitarianspiritofuni-
Lr tothatofthesocial-assistancestate:
onthemarket.
1fact,al1 historicalwelfarestatemodels
1gesinclassstructure.Buttheresponse
1 hasbeenvaried,andso,therefore,has
ation.Thecorporatistinsurancetradi-
I managenewand loftierwelfare-state
11 could technical1y be upgraded quite
tefits.Adenauer's1957pensionreform
ect.Itsavowedpurposewastorestore
1becauseoftheoldinsurancesystem's
1toexpectations.Thisitdidsimplyby
Gesta Esping-Andersen
167
movingfrom contribution-toearnings-graduated benefitswithoutaltering
theframeworkofstatus-distinctiveness.
In nations witheither a social-assistanceorauniversalistic Beveridge-
type system, the optionwas whetherto allow the market orthe state to
furnish adequacy and satisfy middle-class aspirations. Two alternative
modelsemergedfromthispoliticalchoice.TheonetypicalofGreatBritain
and mostoftheAnglo-Saxonworldwastopreserveanessentiallymodest
universalism in the state, and allow the market to reign for the growing
social strata demanding superior welfare. Due to the political power of
suchgroups,thedualismthatemergesis notmerelyonebetweenstateand
market,butalsobetweenformsofwelfare-statetransfers:inthesenations,
oneofthefastestgrowingcomponentsofpublicexpenditureis taxsubsi-
dies forso-called'private'welfareplans.Andthetypicalpoliticaleffectis
the erosionofmiddle-classsupportforwhatis less andless auniversalis-
ticpublic-sectortransfersystem.
Yetanotheralternativehas beentoseekasynthesisofuniversalismand
adequacy outside the market. This road has been followed in countries
where,bymandatingorlegislation,thestateincorporatesthenewmiddle
classes within a luxurious second-tier, universally inclusive, earnings-
related insurance scheme on top of the fIat-rate egalitarian one. Notable
examples are Sweden and Norway. By guaranteeing benefits tailored to
expectations,thissolutionreintroducesbenefitinequalities,buteffeetively
blocksoffthemarket.Itthussucceedsinretaininguniversalismand also,
therefore,thedegreeofpoliticalconsensusrequiredtopreservebroadand
solidaristie support for the high taxes that such a welfare state model
demands.
Welfare State Regimes
As we survey international variations in social rights and welfare-state
stratification, we will find qualitatively different arrangements between
state,marketandthefamily.Thewelfarestatevariationswefind arethere-
fore notlinearlydistributed, butclusteredbyregime-types.
Inoneclusterwe find the'liberal'welfare state,inwhichmeans-tested
assistance, modest universal transfers or modest social-insurance plans
predominate. Benefits cater mainly to a clientele oflow-income, usual1y
working-class, state dependants. In this model, the progress of social
reformhas beenseverelycircumscribedbytraditional, liberalwork-ethic
norms:itis onewherethelimits ofwelfareequalthe marginalpropensity
to optfor welfare instead ofwork. Entitlement rules are therefore strict
andoftenassociatedwithstigma;benefitsaretypical1ymodestoInturn,the
state encourages the market, either passively - by guaranteeing only a
minimum- oractively- bysubsidizingprivatewelfareschemes.
:l i !
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Costa Esping-Andersen 169
168 Three Worlds ofWelfare Capitalism
l
The consequence is that this type of regime minimizes de-commodifi-
cation effects, effectively contains the realm of social rights, and erects an
order of stratification that is a blend of a relative equality of poverty among
state-welfare recipients, market-differentiated welfare among the majori-
ties, and a class-political dualism between the two. The archetypical exam-
pIes of this model are the United States, Canada and Australia.
A second regime-type clusters nations such as Austria, France,
Germany and Italy. Here, the historical corporatist-statist legacy was
upgraded to cater to the new 'post-industrial' class structure. In these
conservative and strongly 'corporatist' welfare states, the liberal obses-
sion with market efficiency and commodification was never pre-eminent
and, as such, the granting of social rights was hardly ever a seriously con-
tested issue. What predominated was the preservation of status differen-
tials; rights, therefore, were attached to class and status. This corporatism
was subsumed under a state edifice perfectly ready to displace the market
as a provider of welfare; hence, private insurance and occupational fringe
benefits playa truly marginal role. On the other hand, the state's empha-
sis on upholding status differences means that its redistributive impact is
negligible.
But the corporatist regimes are also typically shaped by the Church, and
hence strongly committed to the preservation of traditional familyhood.
Social insurance typically excludes non-working wives, and family bene-
fits encourage motherhood. Day care, and similar family services, are con-
spicuously underdeveloped; the principie of 'subsidiarity' serves to
emphasize that the state will only interfere when the family's capacity to
service its members is exhausted.
The third, and clearly smallest, regime-cluster is composed of those
countries in which the principies of universalism and de-commodification
of social rights were extended aIso to the new middle classes. We may call
it the 'social democratic' regime-type since, in these nations, social democ-
racy was clearly the dominant force behind social reformo Rather than tole-
rate a dualism between state and market, between working class and
middle class, the social democrats pursued a welfare state that would
promote an equality of the highest standards, not an equality of minimal
needs as was pursued elsewhere. This implied, first, that services and bene-
fits be upgraded to levels commensurate with even the most discriminat-
ing tastes of the new middle classes; and, second, that equality be furnished
by guaranteeing workers full participation in the quality of rights enjoyed
by the better-off.
This formula translates into a mix of highly de-commodifying and uni-
versalistic programmes that, nonetheless, are tailored to differentiated
expectations. Thus, manual workers come to enjoy rights identical with
those of salaried white-collar employees or civil servants; all strata
are incorporated under one universal insurance system, yet benefits are
graduated according to accustomed earnings. This model crowds out the
market, and consequent!y constructs an essentially universal solidarity in
favour of the welfare state. AH benefit; aH are dependent; and aH will pre-
sumably feel obliged to pay.
The social democratic regime's policy of emancipation addresses both
the market and the traditional family. In contrast to the corporatist-sub-
sidiarity model, the principie is not to wait until the family's capacity to aid
is exhausted, but to pre-emptively socialize the costs of familyhood. The
ideal is not to maximize dependence on the family, but capacities for indi-
vidual independence. In this sense, the model is a peculiar fusion of liber-
alism and socialismo The result is a welfare state that grants transfers
directly to children, and takes direct responsibility of caring for children,
the aged and the helpless. It is, accordingly, committed to a heavy social-
service burden, not only to service family needs but also to allow womenl
to choose work rather than the household.
Perhaps the most salient characteristic of the social democratic regime is
its fusion of welfare and work. It is at once genuinely committed to a full-
employment guarantee, and entirely dependent on its attainment. On thel
one side, the right to work has equal status to the right of income protec-
tion. On the other side, the enormous costs of maintaining a solidaristic,
universalistic and de-commodifying welfare system means that it must]
minimize social problems and maximize revenue income. This is obviously
best done with most people working, and the fewest possible living of
social transfers.
Neither of the two alternative regime-types espouse full employment as
an integral part of their welfare state commitment. In the conservative trad-
ition, of course, women are discouraged from working; in the liberal ideal,
concerns of gender matter less than the sanctity of the market.
[ ... ] Welfare states cluster, but we must recognize that there is nc
single pure case. The Scandinavian countries may be predominantl)
social democratic, but they are not free of crucial liberal elements
Neither are the liberal regimes pure types. The American social-securit)
system is redistributive, compulsory and far from actuarial. At least ir
its early formulation, the New Deal was as social democratic as was con
temporary Scandinavian social democracy. And European conservativo
regimes have incorporated both liberal and social democrati.
impulses. Over the decades, they have become less corporativist and les
authoritarian.
Notwithstanding the lack of purity, if our essential criteria for definin
welfare states have to do with the quality of social rights, social stratifica
tion and the relationship between state, market and family, the world i
obviously composed of distinct regime-dusters. Comparing welfare state
on scales of more or less or, indeed, of better or worse, wiH yie1d highl
misleading results.
sm
mizes de-commodifi-
1rights, and erects an
lity of poverty among
re among the majori-
!he archetypical exam-
Australia.
as Austria, France,
ist-statist legacy was
s structure. In these
es, the liberal obses-
as never pre-emment
ever a seriously con-
on of status differen-
uso This corporatism
o displace the market
occupational fringe
d, the state's empha-
istributive impact is
~ by the Church, and
aditional famayhood.
ves, and famay bene-
nily services, are con-
bsidiarity' serves to
e famay's capacity to
: composed of those
de-commodification
: c1asses. We may call
ations, social democ-
rm. Rather than tole-
L working class and
Lre state that would
equality of minimal
at services and bene-
le most discriminat-
:quality be fumished
ity of rights enjoyed
lmodifying and uni-
ed to differentiated
'ights identical with
servants; all strata
~ m yet benefits are
G,Hta Esping-Andersen
169
graduated according to accustomed eamings. This model crowds out the
market, and consequently constructs an essentiaHy universal solidarity in
favour of the welfare state. AH benefit; all are dependent; and all will pre-
sumably fee! obliged to pay.
The social democratic regime's policy of emancipation addresses both
the market and the traditional family. In contrast to the corporatst-sub-
sidiarity model, the principIe is not to wait until the family's capacity to aid
is exhausted, but to pre-emptively socialize the costs of familyhood. The
ideal is not to maximize dependence on the family, but capacities for indi-
vidual independence. In this sense, the model is a peculiar fusion of liber-
alism and socialism. The result is a welfare state that grants transfers
directly to children, and takes direct responsibility of caring for children,
the aged and the he!pless. It is, accordingly, committed to a heavy social-
service burden, not only to service family needs but also to allow women
to choose work rather than the household.
Perhaps the most salient characteristic of the social democratic regime is
its fusion of welfare and work. It is at once genuinely committed to a full-
employment guarantee, and entirely dependent on its attainment. On the
one side, the right to work has equal status to the right of income protec-
ton. On the other side, the enormous costs of maintaining a solidaristic,
universalistc and de-commodifying welfare system means that it must
minimize social problems and maximize revenue income. This is obviously
best done with most people working, and the fewest possible living off
social transfers.
Neither of the two alternative regime-types espouse full employment as
an integral part of their welfare state commitment. In the conservative trad-
ition, of course, women are discouraged from working; in the liberal ideal,
concerns of gender matter less than the sanctity of the market.
[ ... ] Welfare states cluster, but we must recognize that there is no
single pure case. The Scandinavian countries may be predominantly
social democratic, but they are not free of crucial liberal elements.
Neither are the liberal regimes pure types. The American social-security
system is redistributve, compulsory and far from actuarial. At least in
its early formulation, the New Deal was as social democratic as was con-
temporary Scandinavian social democracy. And European conservative
regimes have incorporated both liberal and social democratic
impulses. Over the decades, they have become less corporativist and less
authoritarian.
Notwithstanding the lack of purity, if our essential criteria for defining
welfare states have to do with the quality of social rights, social stratifica-
tion and the relationship between state, market and family, the world is
obviously composed of distnct regime-dusters. Comparing welfare states
on scales of more or less or, indeed, of better or worse, will yield highly
misleading results.
'
1
1 :1
:1
!
,1
I I i
ji I
;/
I I
1
li!
'1'
1
1I
1
11
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11
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11' '
!III
I
]
170
......
Three Worlds of Welfare Capitalism
TheCausesoWelfare-StateRegimes
If welfarestatesclusterintothreedistinctregime-types,weface asubstan-
tial1y more complex taskofidentifyingthe causes ofwelfare state differ-
ences. What is the explanatory power of industrialization, economic
growth, capitalism or working-class political power in accounting for
regime-types ?Afirstsuperficialanswerwouldbe:verylittle.Thenations
we studyare al1 moreorless similarwithregard to al1 butthevariable of
working-class mobilization. And we find very powerful labour move-
ments andpartiesineachofthethreeclusters.
Atheoryofwelfarestatedevelopmentsmustclearlyreconsideritscausal
assumptionsifitwishestoexplainclusters.Thehopeoffindingonesingle
powerful causal force must be abandoned; the task is to identify salient
interactioneffects.Basedontheprecedingarguments,threefactorsinpar-
ticularshouldbeofimportance:thenatureofclassmobilization(especial1y
oftheworkingclass);class-politicalcoalitionstructures;andthehistorical
legacyofregimeinstitutionalization.
[...]Thereis absolutelynocompel1ingreasontobelievethatworkers
wil1 automatical1y and natural1y forge a socialist class identity; nor is it
plausible thattheir mobilizationwilllookespecial1y Swedish. Theactual
historicalformationofworking-classcol1ectivitieswil1diverge,andsoalso
willtheiraims,ideologyandpolticalcapacities. Fundamentaldifferences
appearbothintradeunionismandpartydevelopment.Unionsmaybesec-
tional orinpursuitofmore universal objectives; they may be denomin-
ational or secular; and they may be ideological or devoted to business
unionismo Whicheverthey are, itwil1 decisively affect the articulationof
politicaldemands,classcohesionandthescopeforlabour-partyaction.It
is clear that a working-class mobilization thesis must pay attention to
unionstructure.
Thestructure oftrade unionism may ormay notbe reflected in labour-
partyformation. Butunderwhatconditionsarewelikelytoexpectcertain
welfarestateoutcomesfromspecificpartyconfigurations?Therearemany
factors that conspire to make it virtually impossible to assume that any
labour,orleft-wing,partywil1everbecapable,single-handedly,ofstructur-
ing awelfare state. Denominationalorotherdivisions aside, itwill be only
underextraordinaryhistoricalcircumstances thatalabourpartyalonewil1
command aparliamentarymajority longenough toimpose its will. [...]
Thetraditionalworkingclasshashardlyeverconstitutedanelectoralmajor-
ity.Itfollowsthatatheoryofclassmobilizationmustlookbeyondthemajor
leftist parties. It is a historical fact that welfare state construction has
dependedonpoliticalcoalition-building.Thestructureofclasscoalitionsis
muchmoredecisivethanarethepowerresourcesofanysingleclass.
Theemergenceofaltemative class coalitions is, inpart, determined by
class formation. Inthe earlierphases ofindustrialization,the ruralclasses
GlJsta Esping-Andersen
usually constituted the largest single group in the elec
democratswantedpoliticalmajorities,itwasherethatthe
look for allies. One of history's many paradoxes is that
were decisive for the future ofsocialismo Where the rur
dominatedbysmall,capital-intensivefamilyfarmers, the
alliance was greater than where it rested on large pools
And where farmers were politically articulate and well
Scandinavia),thecapacitytonegotiatepoliticaldealswas
Theroleofthefarmersincoalitionformationandhenc
development is clear. In the Nordic countries, the nece
obtainedforabroadred-greenal1ianceforaful1-employn
inretumforfarmpricesubsidies.Thiswasespecial1y
Sweden,wherefarmingwashighlyprecariousanddepenl
In the United States, the New Dealwas premised ona
(forgedbytheDemocraticParty),butwiththeimportaI
the labour-intensive South blocked a truly universalisti
system and opposedfurtherwelfare-state developments
rural economy ofcontinentalEuropewas very
coalitions.Often,asinGermanyandItaly,muchofagricu
intensive; hence theunionsand left-wingpartieswerese
addition,theconservativeforces onthecontinenthadsu<
porating farmers into 'reactionary' allances, helping t<
politicalisolationoflabour.
Political dominance was, until after the Second Wor
questio
n
ofrural class politics.Theconstructionofwel
period was, therefore, dictated bywhicheverforce capt
The absence of a red-green allance does not necessari
welfare-state reforms were possible. On the contrary,
politicalforcecarnetodominatetheirdesigno Great
to this general rule, because the political significance o
erodedbeforethetumofthecentury.Inthisway,Britai
showedat an early date the dilemma thatfaced most01
namely,thattherisingwhite-col1arstrataconstitutethe
icalmajorities.Theconsolidationofwelfarestatesafter
War carne to depend fundamentally on thepolitica!all
middle classes. For social democracy, the challeng
e

working-class andwhite-collardemands withoutsacrif
menttosolidarity.
Sincethenewmiddleclasseshave,historical1y,enjoye
ileged position in the market, they have also been q
meeting theirwelfare demands outside the state, or,.as
privileged state welfare. Their employment secunty
beensuchthatfullemploymenthasbeenaperipheralco
programmefordrastic income-equalizationis likelyto
.........
GE'JSta Esping-Andersen
171
r
usually constituted the largest single group in the electorate. If social
democrats wamed poltical majorities, t was here that they were forced to
pes, we face a substan-
'o'
look for alIies. One of history's many paradoxes is that the rural classes
of welfare state differ-
Istrialization, economic
wer in accouming fo
r
very liule. The nations
aU but the variable of
owerful labour move-
rly reconsider its causal
e of finding one single
k is to identify saliem
ts, three factors in par-
obilization (especially
res; and the historical
)to believe that workers
dass identity; nor is it
Ily Swedish. The actual
wiU diverge, and so also
undamemal differences
me Unions may be sec-
chey may be denomin-
lr devoted to business
fect the articulation of
labour-party action. It
must pay attention to
be reflected in labour-
likely to expect certain
Itions? There are many
le to assume that any
-handedly, of structur-
IS aside, it wiU be onl y
abour party alone will
impose its will. [ ... ]
ted an electoral major-
look beyond the major
tate construction has
re of class coalitions is
my single class.
1 part, determined by
tio
n
, the rural classes
were decisive for the future of socialismo Where the rural economy was
dominated by smalI, capital-intensive family farmers, the potential for an
alliance was greater than where it rested on large pools of cheap labour.
And where farmers were politically articulate and welI organized (as in
Scandinavia), the capacity to negotiate political deals was vasdy superior.
The role of the farmers in coalition formation and hence in welfare state
developmem is clear. In the Nordic countries, the necessary conditions
obtained for a broad red-green alliance for a full-employmem welfare state
in return for farm price subsidies. This was especialIy true in Norway and
Sweden, where farming was highly precarious and dependent on state aid.
In the United States, the New Deal was premised on a similar coalition
(forged by the Democratic Party), but with the importam difference that
the labour-intensive South blocked a truly universalistic social security
system and opposed further welfare-state developments. In contrast, the
rural economy of continental Europe was very inhospitable to red-green
coalitions. Often, as in Germany and Italy, much of agriculture was labour-
intensive; hence the unions and left-wing parries were seen as a threat. In
addition, the conservative forces on the continent had succeeded in incor-
porating farmers into 'reactionary' alliances, helping to consolidate the
political isolation of labour.
Political dominance was, until after the Second World War, largely a
question of rural class politics. The construction of welfare states in this
period was, therefore, dictated by whichever force captured the farmers.
The absence of a red-green alliance does not necessarily imply that no
welfare-state reforms were possible. On the contrary, it implies which
political force carne to dominate their designo Great Britain is an exception
to this general rule, because the poltical significance of the rural classes
eroded before the turn of the century. In this way, Britain's coalition-Iogic
showed at an early date the dilemma that faced most other nations later;
namely, that the rising white-collar strata constitute the !inchpin for polit-
ical majorities. The consolidation of welfare states after the Second World
War carne to depend fundamemally on the political alliances of the new
middle classes. For social democracy, the challenge was to synthesize
working-class and white-collar demands without sacrificing the commit-
ment to solidarity.
Since the new middle classes have, historicalIy, enjoyed a relatively priv-
ileged position in the market, they have also been quite successful in
meeting their welfare demands outside the state, or, as civil servants, by
privileged state welfare. Their employment security has traditionally
been such that full employment has been a peripheral concern. Finally, any
programme for drasric income-equalization is likely to be met with great
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172 Three Worlds 01 Wellare Capitalism
hostility among a middle-class clientclc. On these grounds, it would appear
that the rise of the new middle classes would abort the social democratic
projcct and strengthen a liberal welfare state formula.
The politicalleanings of the new middle classes have, indeed, been deci-
sive for welfare state consolidation. Their role in shaping the three welfare
state regimes described earlier is clear. The Scandinavian model relied
almost entire!y on social democracy's capacity ro incorporate them into a
new kind of welfare state: one that provided benefits tailored ro the tastes
and expectations of the middle classes, but nonetheless retained universal-
ism of rights. Indeed, by expanding social services and public cmployment,
the welfare state participated directly in manufacturing a middle class
instrumentally devoted to social democracy.
In contrast, the Anglo-Saxon nations retained the residual welfare state
model precise!y because the new middle classes were not wooed from the
market to the state. In class terms, the consequence is dualismo The welfare
state caters essentially ro the working class and the poor. Private insurance
and occupational fringe benefits cater to the middle classes. Given the elec-
toral importance of the latter, it is quite logical that further extensions of
welfare state activities are resisted.
The third, continental European, welfare state regime has also been pat-
temed by the new middle classcs, but in a different way. The cause is
hisrorical. Developed by conservative political forces, these regimes insti-
tutionalized a middle-class loyalty ro the preservation of both occupa-
tionally segregated social-insurance programmes and, ultimately, to the
poltical forces that brought them into being. Adenauer's great pension
reform in 1957 was explicitly designed ro resurrect middle-class loyalties.
Conclusion
We have here presented an altemative to a simple class-mobilization theory
of welfare-statc development. Itis motivated by the analytical necessity of
shifting from a linear to an interactive approach with regard to both
welfare states and their causes. If we wish ro study welfare states, we must
begin with a set of criteria that define their role in society. This role is cer-
tainly not ro spend or tax; nor is it necessarily that of creating equality. We
have presented a framework for comparing welfare states that takes into
consideration the principles for which the historical actors have willingly
united and struggled. When we focus on the principies cmbedded in
welfare states, we discover distinct regime-clusters, not merely variations
of 'more' or 'less' around a common denominator.
The historical forces behind the regime differences are interactive. They
involve, first, the panem of working-class political formation and, second,
political coalition-building in the transition from a rural economy to
Gosta Esping-Andersen
a middle-class society. The question of political co'
decisive. Third, past reforms have contributed decisiv
alization of class preferences and political behaviou
regimes, hierarchical status-distinctive social insuran
class loyalty to a peculiar type of welfare state. In
middle classes became institutionallv wedded to t
Scandinavia, the fortunes of social d e ~ o r y over t
closely tied to the establishment of a middle-class we
fits both its traditional working-class clientele and t
strata. The Scandinavian social democrats were able t
because the private welfare market was relatively und
because they were capable of building a welfare state
ficient luxury to satisfy the wants of a more discrimina
explains the extraordinarily high cost of Scandinavian'
But a theory that seeks to explain welfare state gr
able to understand its retrenchment or decline. It is ge
welfare state backlash movements, tax revolts and r
when social expenditure burdens become too hea
opposite is true. Anti-welfare-state sentiments (since
erally been weakest where welfare spending has bee
versa. Why?
The risks of welfare state backlash depend not on s
class character of welfare states. Middle-class welfare
I democratic (as in Scandinavia) or corporatist (as i
middle-class loyalties. In contrast, the liberal, residl
found in the United States, Canada and, increasingly
the loyaltiesclf a numerically weak, and often politil
stratum. In this sense, the class coalitions in which th
regime-types were founded explain not only their pa:
their future prospects.
Note
From The Three Worlds of Welfare Capitalism, Cambrid
pp. 18-34.
References
Cameron, D. R. (1978) 'The Expansion of the Public Eco
Analysis', American Political Science Review, 72, 4, pp. 1
Cutright, P. (1965) 'Political Structure, Economic Devel
Social Security Programs', American journal of Sociologj
Esping-Andersen, G. (1985) 'Power and Distributional
Society, 14.
1Ir"
are Capitalism

Gn these grounds, it would appear
ould abort the social democratic
state formula.
le classes have, indeed, been deci-
.r role in shaping the three welfare
. The Scandinavian model relied
pacity to incorporate them into a
ided benefits tailored to the tastes
ut nonetheless retained universal-
1services and public employment,
in manufacturing a middle class
acy.
retained the residual welfare state
classes were not wooed from the
sequence is dualismo The welfare
ss and the poor. Private insurance
he middle classes. Given the elec-
logical that further extensions of
state regime has also been pat-
lin a different way. The cause is
forces, these regimes insti-
he preservation of both occupa-
Igrammes and, ultimately, to the
being. Adenauer's great pension
) resurrect middle-class loyalties.
GfJsta Esping-Andersen
173
a middle-class society. The question of political coalition-formation is
decisive. Third, past reforms have contributed decisively to the institution-
alization of class preferences and political behaviour. In the corporatist
regimes, hierarchical status-distinctive social insurance cemented middle-
class loyalty to a peculiar type of welfare state. In liberal regimes, the
middle classes became institutionally wedded to the market. And in
Scandinavia, the fortunes of social democracy over the past decades were
closely tied to the establishment of a middle-class welfare state that bene-
fits both its traditional working-class clientele and the new white-collar
strata. The Scandinavian social democrats were able to achieve this in part
because the private welfare market was relatively undeveloped and in part
because they were capable of building a welfare state with features of suf-
ficient luxury to satisfy the wants of a more discriminating publico This also
explains the extraordinarily high cost of Scandinavian welfare states.
But a theory that seeks to explain welfare state growth should also be
able to understand its retrenchment or decline. It is generally believed that
welfare state backlash movements, tax revolts and roll-backs are ignited
when social expenditure burdens become too heavy. Paradoxically, the
opposite is true. Anti-welfare-state sentiments [since the 1980s] have gen-
erally been weakest where welfare spending has been heaviest, and vice
versa. Why?
The risks of welfare state backlash depend not on spending, but on the
class character of welfare states. Middle-class welfare states, be they social
democratic (as in Scandinavia) or corporatist (as in Germany), forge
middle-class loyalties. In contrast, the liberal, residualist welfare states
found in the United States, Canada and, increasingly, Britain, depend on
the loyalties of a numerically weak, and often politically residual, social
stratum. In this sense, the class coalitions in which the three welfare-state
regime-types were founded explain not only their past evolution but also
their future prospects.
Note
From The Three Worlds of Welfare Capitalism, Cambridge, Polity Press, 1990,
pp. 18-34.
References
Cameron, D. R. (1978) 'The Expansion of the Public Economy: A Comparative
Analysis', American Poltical Science Review, 72, 4, pp. 1243-61.
Cutright, P. (1965) 'Political Structure, Economic Development, and National
Social Security Programs', American Journal ofSociology, 70, pp. 537-50.
Esping-Andersen, G. (1985) 'Power and Distributional Regimes', Poltics and . .
. ." lJI ",.: I
Sonety, 14. .,;'.. r.-- "
i'/' ..
l' ,
,
"\,:
''"
I I
i
1I i I
11; I
:' 1 I
I I
,
simple class-mobilization theory
lted by the analytical necessity of
approach with regard to both
: to study welfare states, we must
ir role in society. This role is cer-
lrily that of creating equality. We
ng welfare states that takes into
e historical actors have willingly
on the principIes embedded in
e-clusters, not merely variations
lminator.
differences are interactive. They
political formation and, second,
tion from a rural economy to
I
:
I
174
,
:;

Three Worlds of We/fare Capitalism
Esping-Andersen, G. (1987) 'Citizenshipand Socialism', in M. Rein, G. Esping-
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Myles,J. (1984) Old Age in the Welfare State, Boston,Little,Brown.
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Schmidt, M. G. (1983) 'The Welfare State and the Economy in Periods of
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ThreeWorldsofWelfa
CapitalismorMore?
A State-of-the-ArtRe}
Wil Arts andJohn e l i s s ~
[ ... ]
ThreeWorldsof'WelfareCapitalism'...
The central explanatory questions Esping-Ander
1OS) asks are: Why is the world composed of
different welfare-state logics? Why do nations cryst
regime-clusters?Thesequestionsdemandatheoretical
of the opinion that the existing theoretical models e
are inadequate, reconceptualization and retheorizat
In answering these questions he starts with the o
thathistoryandpoliticsmatter.Or,morespecifical1y:,.
acteristicsofstates,especial1ythehistoryofpoliticalel
mostdecisivecauseofwelfare-statevariations,havepI
role inforgingtheemergenceoftheirwelfare-statism'
Whatare the.historical and political forces behind
ences? According to Esping-Andersen (p. 29), three
aresignificant:thenatureofelassmobilization(especi
class),class-politicalactionstructures,andthehistori<
institutionalization. The provisional answer to his (
therefore:If youlookat thehistoryofso-cal1ed welJ
three ideal-typical trajectories, a liberal, a conserv
democratic one. Fortunately, one does nothave to
however, in order to typify 'real' welfare states. ~
them,as wehavementionedbefore,bylookingatthe
fundamentaldimensionsofwelfarestatism:
~