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Politics of Risk-taking

Politics of Risk-taking: Welfare State Reform in Advanced Democracies

Barbara Vis
Copyright Date: 2010
Pages: 248
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  • Book Info
    Politics of Risk-taking
    Book Description:

    How much and in which direction have the welfare states among the Western democracies changed over the past decades? Moreover, under which conditions have governments enacted these changes? Based on insights from prospect theory, a psychological theory of choice under risk, Vis demonstrates ably that the context in which governments find themselves (losses or gains) affects their attitude towards risk and thereby the degree and type of reform they pursue. Facing socio-economic losses or political ones, governments accept the electoral risk involved in unpopular reforms, such as benefit cutbacks; confronting gains, they steer away from them. The study's new theoretical stance and innovative methodological approach (fuzzy-set analysis) make Politics of Risk-Taking a must read for policymakers, scholars as well as students interested in the politics of welfare state reform.

    eISBN: 978-90-485-1236-2
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-7)
  3. Tables and figures
    (pp. 8-8)
  4. Acknowledgements
    (pp. 9-12)
    Barbara Vis
  5. 1 The puzzle and its pieces
    (pp. 13-26)

    Reforming the welfare state, or proposing to do so, involves a substantial electoral risk. Many parties and governments have experienced this first hand over the last two decades. Examples include the German Christian Democrats in 1998, the Dutch Social Democrats and Christian Democrats in 1994, and the New Zealand Labour party in 1990. A recent example of just how risky announcing a reform can be, comes from the Dutch Social Democratic party, the PvdA (Partij van de Arbeid). By the end of April 2006, Wouter Bos, the party leader, suggested the so-called fiscalization of the public pension scheme (AOW,Algemene)...

  6. 2 Fuzzy-set analysis
    (pp. 27-38)

    The aim of this chapter is to introduce this study’s methodological approach: fuzzy-set analysis. Since using this technique is still relatively rare in the social sciences in general and in comparative political economy (of which comparative welfare state research is a sub-field) in particular, I will first explain why I do not use a more common approach: pooled time series cross-section analysis. Subsequently, I will discuss fuzzy-set analysis and elaborate two of its techniques: 1) fuzzy-set qualitative comparative analysis, or fsQCA and 2) fuzzy-set ideal type analysis.

    Comparative political economy uses various techniques of comparative research. The techniques that are...

  7. Part I The degree and shape of welfare state reform

    • 3 Radical change or much ado about nothing?
      (pp. 41-72)

      How much has the welfare state actually changed over the last two decades or so? And in which direction? That is to say, which programmes were cut back, dismantled, or expanded? Were the occurring changes regime specific and path dependent, as the so-called mainstream welfare state analysts such as Esping-Andersen (1990; 1999), Pierson (1994; 2001) and Castles (2004) concur? Or did these changes transform the character of welfare states radically, as scholars within the regulation approach to political economy such as Jessop (2002) and Peck (2001) posit?

      This chapter tackles these questions by assessing which of two literature’s predictions and...

    • 4 Which governments pursue reform and how much?
      (pp. 73-88)

      This chapter continues the discussion on the degree and shape of welfare state reform by zooming in on the unpopular and not-unpopular reforms pursued by the British, Danish, Dutch and German governments between 1979 and 2005. Recall that unpopular reforms are those changes that do not include the median voter, while not-unpopular reforms are those changes that do not entail imposing losses on a certain group of voters but which are also not ‘popular’ in the sense that the median voter is (highly) favourable towards it. Before discussing the degree of unpopular and notunpopular reform pursued by the governments, let...

  8. Part II Explaining welfare state reform

    • 5 What existing theories have to offer and why they fail
      (pp. 91-108)

      How to explain the puzzling cross-government variation in different types of welfare state reform that chapter 4 revealed? What triggers some governments, such as Lubbers I, Schröder II and Nyrup Rasmussen II, to accept the possible electoral penalties and pursue unpopular reform, whilst other governments, such as Lubbers II, Schröder I and Nyrup Rasmussen I, shy away from this risk? Moreover, why do some governments, such as Thatcher II and Kohl I, engage in not-unpopular reform – which does not include a substantial political risk but which also does not present an avenue for reaping electoral gains – whilst others,...

    • 6 Bringing in prospect theory
      (pp. 109-132)

      Chapter 5 has shown that existing studies cannot explain well under which conditions political actors are willing to take the risk involved in pursuing unpopular measures. Consequently, they cannot systematically explain the variation in different types of welfare state reform across governments. In this chapter, I develop the theoretical argument that governments’ attitude towards risk, and hence their willingness to pursue unpopular reform or not-unpopular reform, is shaped by the context or domain in which the government finds itself. This argument draws on insights fromprospect theory. Three decades ago, Kahneman & Tversky (1979) developed this psychological theory of choice under...

    • 7 Politics of risk-taking
      (pp. 133-156)

      This chapter puts the theoretical model based on prospect theory developed in the previous chapter to an empirical test by assessing under which conditions governments engage in unpopular reform and not-unpopular reform. Existing studies that stress the importance of socio-economic problems and problem load, partisanship, institutions and ideas identify the opportunities and constraints of reform, the motives for reform, what triggers reform and what makes decision-makers act. They also can help one to account for the variation in reform across countries. However, these theories fall short when it comes to explaining thevariation across governmentsin unpopular and not-unpopular welfare...

  9. Part III Conclusion

    • 8 Risk-taking in welfare reform: Summary and implications
      (pp. 159-172)

      Notwithstanding the risk of electoral punishment that governments face when implementing unpopular welfare state reforms – that is, policy changes that do not favour the median voter such as benefi t cutbacks –, this study has shown that a substantial number of governments did pursue such reforms over the last decades. Interestingly, there were also governments that shied away from this risk by not implementing unpopular measures. Moreover, this study has demonstrated that a similar variation across governments exists for not-unpopular reforms – that is, those policy changes that aff ect the median voter neither positively nor negatively such as...

  10. Appendices

    • Appendix A: Tables
      (pp. 173-179)
    • Appendix B: Coding of the Degree of Unpopular Reform Pursued by British, Danish, Dutch and German Cabinets, 1979-2005
      (pp. 180-192)
    • Appendix C: Coding of the Political Position of the British, Danish, Dutch and German Cabinets, 1979-2005
      (pp. 193-208)
  11. Notes
    (pp. 209-214)
  12. References
    (pp. 215-242)
  13. Index
    (pp. 243-247)
  14. Back Matter
    (pp. 248-248)