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Social policy in challenging times

Social policy in challenging times: Economic crisis and welfare systems

Kevin Farnsworth
Zoë Irving
Copyright Date: 2011
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  • Book Info
    Social policy in challenging times
    Book Description:

    There is no precedent to the current economic crisis which looks set to redefine social policy debate throughout the globe. But its effects are not uniform across nations. Bringing together a range of expert contributions, the key lesson to emerge from this book is that 'the crisis' is better understood as a variety of crises, each mediated by national context. Consequently, there is an array of potential trajectories for welfare systems, from those where social policy is regarded as incompatible with the post-crisis economy to those where it is considered essential to future economic growth and security.

    eISBN: 978-1-84742-829-5
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Table of Contents
    (pp. iii-iv)
  3. List of figures and tables
    (pp. v-vi)
  4. Notes on contributors
    (pp. vii-x)
  5. Acknowledgements
    (pp. xi-xii)
  6. ONE Varieties of crisis
    (pp. 1-30)
    Kevin Farnsworth and Zoë Irving

    The evolution of social policy is punctuated with key dates. All of the major developed welfare states have their own chronological milestones and some share key historical ‘moments’: the economic crisis of the 1930s, the Second World War and the 1973 oil crisis all stand out. However, no period in history is likely to prove to be quite so significant for quite so many welfare systems as is the late 2000s. The body of literature built around welfare state development suggests that the golden age gave way to an age of ‘limits’ followed by retrenchment (see Palier, 2006, pp 358–...

  7. TWO The economic crisis and paradigm change
    (pp. 31-48)
    Michael Hill

    This chapter will explore the politics of the response to the contemporary economic crisis in terms of Peter Hall’s (1986, 1992) analysis of the significance of paradigm shifts for the explanation of policy change. Hall applied that approach to the analysis of the replacement of Keynesianism by monetarism in the 1970s. The obvious question now is: are we seeing, or likely to see, another shift, a reversal of that shift or indeed some new shift in the dominant approach to the management of the economy. Hall himself, in a comment for a news magazine, spoke of the crisis as ‘bringing...

  8. THREE From financial crisis to fiscal crisis
    (pp. 49-64)
    Ian Gough

    The financial crash of 2008 and the ensuing global recession have been widely recognised as the most decisive capitalist crisis since the Great Depression of the 1930s. The scale of the crash, the speed in which the circuits of finance capital unravelled, its origins within the heartlands of Anglo-American capital, the synchronised global slump in output and the gigantic scale of government reactions, marked it apart from all other post-war financial crises. Take just one authoritative real-time commentator, Martin Wolf (2009) of theFinancial Times, and just one of his many interventions on the transformation in capitalism that will surely...

  9. FOUR Credit crunch, inequality and social policy
    (pp. 65-80)
    Adrian Sinfield

    Half a century ago, Richard Titmuss showed how ‘the changing concentrations of economic and financial power’ inThe Irresponsible Societywere impeding the creation of a fairer, more equal society (Titmuss, 1959, in Alcock et al, 2001, p 141). The credit crunch crisis that broke in 2007 and its repercussions make his reflections particularly relevant.

    In its more ambitious moments, social policy engages with broader issues about the nature of society and the quantity and quality of life for all its members, even exploring this on a comparative and global scale. But often we fail to avoid ‘the professional ideology...

  10. FIVE Global social policy responses to the economic crisis
    (pp. 81-100)
    Bob Deacon

    Global social policy (GSP) studies has emphasised the contest and conflict regarding advice given to countries about their social policy by a diverse range of global players, including intergovernmental organisations. Thus:

    The ideas about desirable national social policy carried and argued for by the international organisations … reveals something approaching a ‘war of position’ between those agencies … who have argued for a more selective, residual role for the state together with a larger role for private actors in health, social protection and education provision and those who took the opposite view. This division of opinion often reflected a disagreement...

  11. SIX Poverty, the crisis and social policy responses in developing countries
    (pp. 101-118)
    Armando Barrientos

    The onset of the post-2007 financial crisis in countries of the Organisation for Economic Co-operation and Development (OECD), particularly the United Kingdom (UK) and the United States (US), and its subsequent spread on a global scale has raised concerns regarding its impact on developing countries, and more specifically the likely impact of the crisis on poverty, vulnerability and other social indicators. These concerns come on top of earlier concerns regarding the impact on poverty of the recent volatility of food prices, and of climate change. The crisis is widely expected to afflict the economies of developing countries, through the effects...

  12. SEVEN South Korea after the 1997 economic crisis: a ‘paradigm shift’?
    (pp. 119-138)
    Eunna Lee-Gong

    The modern Western welfare state has its roots in the notion of an entitlement deriving from the citizenship model as expounded by T.H. Marshall (1950). What thereby becomes a social right to welfare has deeply influenced the development of welfare systems in Western countries, although different countries have established different national standards of social rights and these have been expressed through different programmes (Marshall, 1950; Esping-Andersen, 1990). However, faced with recurrent economic crises and the resultant ‘fiscal crisis of the state’ (O’Connor, 1973; Gough, 2000), Western welfare states have, in general, shifted from concern with the amelioration of market inequalities,...

  13. EIGHT China’s response to crisis: what role for social policy?
    (pp. 139-158)
    Sarah Cook and Wing Lam

    The post-2007 financial crisis devastated the health of the global economy, leaving many advanced economies on the verge of financial collapse and later, in deep recession. It overshadowed even the impacts of the 1997 Asian financial crisis. Between 2007 and 2009, world growth contracted from 5.2% to –0.6%; world trade volume also plummeted from robust growth of 7.2% to a depressive figure of –10.7% (IMF, 2010f).¹ Although not at the epicentre of the crisis, China – along with many emerging Asian economies – could not remain unscathed by the fallout of such financial failure in the West (Chhibber et al,...

  14. NINE Tiptoeing through crisis? Re-evaluating the German social model in light of the global recession
    (pp. 159-180)
    John Hudson and Stefan Kühner

    To contextualise the German case, it is tempting to draw comparisons with the United Kingdom (UK) as perceptions of these two economic powerhouses of Europe have been locked into something of a Yin and Yang relationship in recent decades. This is particularly so when Germany is viewed through the lens of British political debate.

    In the early to mid-1990s, it was a commonly held view that the UK had much to learn from the German ‘model’. Indeed, in his bestsellingThe State We’re In, Hutton (1995) argued that there were fundamental weaknesses in the British economy – too focused on...

  15. TEN Ireland and the impact of the economic crisis: upholding the dominant policy paradigm
    (pp. 181-198)
    Mairéad Considine and Fiona Dukelow

    Ireland represents one of the more extreme cases of economic damage in the global economic crisis. The country became the first in the euro area to enter recession and, over the period 2008 to 2010, Gross Domestic Product (GDP) declined by about 11%. Ireland’s banking crisis is, along with Iceland’s, one of the largest of the advanced economies and the country also had the largest current deficit in the European Union (EU) by 2010. This situation poses near-impossible challenges and severe economic and social hardship. Such a rupture from the previous decade of high growth, for which Ireland was feted...

  16. ELEVEN Waving not drowning: Iceland, kreppan and alternative social policy futures
    (pp. 199-218)
    Zoë Irving

    As a small island state with a population of less than half a million, Iceland does not generally feature as a country case study in comparative texts, even those with an interest in Nordic social policy (for example, Kautto et al, 1999). The place of small island states in the world order more widely has hitherto been of interest only occasionally: as pieces in larger geopolitical jigsaws put together in studies in international relations (Cyprus, Gibraltar and Malta for example); as examples of economic success against the odds in development studies (Singapore for example); or as wayward bastions of capitalism’s...

  17. TWELVE Experiences from two financial crises in the Nordic welfare states: 1990-93 and 2008-10 compared
    (pp. 219-230)
    Pekka Kosonen

    This chapter examines the 2008 economic crisis in three small Nordic countries: Denmark, Finland and Sweden. It compares the responses in these countries to the 2008 crisis with the financial crisis of the early 1990s. The structure of the chapter is as follows. First, the regulatory regimes of Nordic welfare states are explored. Second, the roots of the early 1990s financial crisis are analysed. Last, the economic and financial crisis from 2008 to 2010 is examined with a particular focus on the implications this has had for social policy.

    On the basis that financial markets are inherent unstable, and given...

  18. THIRTEEN Social policy and the recent economic crisis in Canada and the United States
    (pp. 231-250)
    Daniel Béland and Alex Waddan

    The economic crisis that manifested itself in 2008 in the United States (US) also had serious consequences in Canada, a country that has strong economic ties with its powerful southern neighbour. From a social policy standpoint, these countries also have a lot in common in as much as both are considered to be liberal welfare regimes featuring limited public support in at least some policy areas, with an extensive role for private benefits (Esping-Andersen, 1990). One consequence of the gaps in public coverage in policy areas such as unemployment and social assistance benefits is that both the Canadian and the...

  19. FOURTEEN From economic crisis to a new age of austerity: the UK
    (pp. 251-270)
    Kevin Farnsworth

    As already noted in previous chapters of this volume (see especially Chapter One), the post-2007 economic crisis was a global economic event that had variable effects on national economies. How, and to what extent, it has had an impact depends on local circumstances: prevailing economic conditions and political responses. Thus, the global economic crisis can be better understood as a series of national economic crises, each being distinguished by the size of the initial economic hit and by the particular mix of political and economic weapons selected to defend national economies. And as we shift the focus to individual nations,...

  20. FIFTEEN Responding to the challenges: some concluding remarks on welfare futures in changed circumstances
    (pp. 271-278)
    Kevin Farnsworth and Zoë Irving

    The opening chapter to this volume drew attention to the significance of variance in understanding the nature and impact of the financial crisis that began in the United States (US) in 2007 and went ‘global’ in 2008. This theme was evident at the workshop held in 2009 that initially inspired this book, where optimists pointed to the opportunities for challenging failed neoliberal models of capitalism, which seemed to be surfacing in a range of contexts, and to the possibilities for pursuing more progressive welfarist agendas. Pessimists argued that the crisis would only squeeze welfare systems still further, making them less...

  21. Bibliography
    (pp. 279-322)
  22. Index
    (pp. 323-335)
  23. Back Matter
    (pp. 336-336)