Comparative and global policy 1

COMPARATIVE AND GLOBAL POLICY

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 Comparative and global policy 2

Introduction

A welfare state is defined as the established arrangements, guidelines, and understandings

that direct and shapes the existing social policy decisions, expenses and advances, problem

descriptions, and a responsive and demanding structure of people and welfare users (de Frel,

2009). An important point of modern welfare theory is that welfare states not only differ

regarding their levels of public expenditure but also in terms of their institutional terms.

Gosta Esping-Anderson (1990) hence coined the term welfare regimes to differentiate

between the three ideal welfare types namely; The liberal, social democratic, and

conservative regimes.

This paper focuses on the comparison of the welfare state in two states subject to two

diverse types of welfare regimes: conservative-corporatist in Germany and the liberal regime

in the United States. The paper will present briefly the idea of welfare regime analysis as

proposed by Esping-Anderson and his reason for proposing it, and the intended advantages as

a new approach to existing social policies. The essay will also provide a description and

summary of the key measures and features of conservative Germany and the liberal United

States, consider key policies and outcomes concerning equality, and compare and contrast the

two welfare regimes. The evaluation will be majorly grounded on the Esping-Andersen

model which was established at the beginning of the 1900s.

Theory

Prior to Esping-Andersen's contribution, Titmuss had divided welfare states into residual

or institutional (Titmuss, 1974: Cited in Campa, 2015). Residual referred to the systems in

place that act as a safety zone in case of a market failure while institutional welfare was often

grounded on ideologies of social rights. Andersen was highly critical of the welfare

typologies. In 1990, he developed his own classification, that had profound effect. He created

this new typology with the argument that most schemes and studies of welfare states have
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placed too much focus on social spending (Campa, 2015). Most experts classified various

welfare states according to their expenses. Wilensky, for instance, in 1958 measured the kind

of welfare states using their expenses in relation to the GDP. However, based on Esping’s

scheme, such a study is deceptive as by measuring welfare on spending, there is an

assumption that all expenditure is equal; this supposition is incorrect (Guler, 2019). Esping

formulated a welfare state typology that was defined by two major features namely, the level

of decommodification and the type of stratification they yield in the community. He defines

decommodification as a concept that occurs when a provision is offered as a matter of right,

and when persons can preserve a living without relying on the market. Stratification, on the

other hand, refers to the intensity of relocation and the level of global of solidarity that is

executed by the welfare state. Andersen contends that historically, a person can effortlessly

recognise other arrangements of social stratification that can be deduced from different

welfare systems. Grounded on these two scopes Esping differentiates three types of welfare

states namely; liberal, conservative, and social-democratic (Esping, 1990). This new

approach embraces a new approach of the labour market regulation and family policies as

essential in the analysis of welfare states.

Conservative welfare state

 Within the prevailing topologies, the German welfare state is labelled as representing the

conservative model. The German Welfare prototype had its roots in the Bismarck Era, in

1873 in Prussia and Saxony. Bismarck formulated a system of social insurance that was

stratified along work-related and class lines. Since its beginning, the German Welfare State

heavily relied on cash allowances and thus transfer payments. Some of the policies set to

enhance social welfare include; Health insurance, in 1883, Accident insurance in 1884, the

1889 old-age pensions, and the 1927 National Unemployment insurance (de Frel, 2009).

These policies formed the foundation for the modern European welfare state. The modern
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welfare system went through expansion, for instance, the Nazi regime (pension benefits), and

particularly after World War II by successive Christian Democratic-led by Social Democratic

governments. For years, the conservatism of the German culture translated into low women

participation in the labour market.

German social policies are categorised through their distinguishing priorities, and not

optimum degrees of expenditures. The most significant feature is that as a result of political

weakness among the bourgeois class, that failed to overcome the monarchic system, the first

reactions to the new capitalism came from churches. In their Kaiserreich situation before

World War 1, a culture of charities, voluntary organisations, and a dual structure that

received public support from public authorities was designed (de Frel, 2009). In the Weimar

Republic of the 1920s, however, and with the rise of the umbrella organisations, a dual

structure was formed with the public authorities co-financing the services rendered, while at

the same time guaranteeing a level of autonomy. Despite the fascism interruptions at the time,

this structural pattern was characteristic of most health and welfare services in post-war

Germany. Even today approximately half of the social services are run by non-profit

organisations.

The transformations that have been recorded have two defining characteristics that have

been driven by problems of unification and the resulting established adaptation. First,

traditional German institutions are intact but still undergoing change. The second is that

variations in prospects, attitudes, and principles in business, policymaking, and in the broader

community are basic driving forces from the traditional biased welfare system to what

remains essentially German. These driving forces draw on a broader range of societal,

economical, and cultural impacts. Today, the Agenda reforms and the incorporation of

proposals to reform the welfare system has exemplified the government’s awareness and
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necessity to react. According to Hassel, the changes have transformed the German social

market into something that is more liberal (Hassel, 2010).

The German Welfare system remains one of the most elaborate. As an inventor in creating

social welfare benefits, imperial Germany in the 1880s became the first state to offer health

and accident insurance, workers and employee benefits and pensions, and miner’s insurance

(Isakjee, 2017). The initial Bismarckian model shares some features with the current welfare

model. First, the initial Bismarckian welfare state rested mainly on the wage-centred

insurance principle. That is, the system’s services and benefits are financed by contributions

from wages rather than by general taxation. Today, the German welfare system is still based

on social insurance for long-term care (Rothgang, 2010). Social benefits are provided by

insurance schemes financed by citizen’s contributions, that is, employees and employers.

Each citizen has an obligation of subscribing to social insurance, and each of them

contributes depending on his or her wage. Germany’s old-age pension program, introduced

by Otto von Bismarck in the 1880S, provided retirement benefits funded by the integration of

workers, employers, and government funding. The program was initially unstable when it

was structured; however, it is more efficient today as it went through a series of reforms, the

government’s portion of pension weight was reduced while simultaneously maintaining

prevailing benefits through extra worker contributions (Eichler, 2009). In addition, the

traditional German concept of welfare recognised housing policy as being part of the social

policy. Even though the German housing market has undergone numerous changes in the last

few years, such as the privatisation of municipal building societies, the state is still very

present in the housing sector. Lastly, the initial and current system is characterised by a

mixture in the welfare system. Welfare mix is defined as the varying configurations of actors

in the provision of welfare Even though welfare mixes have been in existence in the German

social welfare scheme since its establishment; after reunification, they developed differently
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in relation to the different service areas such as contrast in child and elderly care, and in the

field of housing, the model looked back on the tradition where local administrations worked

closely with co-operatives.

In Germany, like in other developed countries (Social expenditure update, 2016), social

spending remains the major individual element of community spending. In 2018 for instance,

approximately 996 million Euros was dedicated to civic spending. This equates to a share of

about a quarter of the gross domestic product (GDP). Today the welfare system represents a

neatly woven state of health, pension, accident, nursing care, and unemployment insurance

for the residents. The social network comprises a basic income for retirees and those who are

enduringly incapable of working, and financial reimbursements such as the family allowance

system (Strong Welfare State). For instance, due to increases in 2018, and 2019, families

receive 204 Euros per month for the first two children, 210 Euros for the third child, and 235

Euros for any additional children. In early 2020, the Federal State has resolved to introduce a

basic pension that will benefit at least 1.3 million people, most of them being women.

According to this scheme, anybody who has paid into pension insurance for the last 33 years

and has been a low-income earner will in future, obtain a bonus. This scheme was scheduled

for introduction on 1st January 2021.

The American “Liberal” Regime Welfare

According to Esping Andersen, the United States is a close approximation of the ideal

Liberal type of Welfare (Lynch, 2015). The American Welfare State heavily relies on private

providers for everything including health insurance, and old-age pensions. Its establishment

lagged far behind that of Germany and was established by Lester Frank Ward, an American

sociologist, who was referred to as the father of modern welfare by Henry Steele

Commager’s history. The welfare scheme began in the 1930s, in the great depression. After

the Great Society Legislation of the 1960s, persons who were neither disabled nor elderly
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were able to receive aid for the first time. The aid encompassed wide-ranging welfare

payments, Medicaid healthcare, distinct payments for pregnant women and young mothers,

food stamps, and housing benefits.

As defined by United States government agencies, and academic publications, social

spending in the United States always pays for programs that provide healthcare, income

security, education, food, housing, and cultural amenities (Agresti, 2021) Some measures of

social spending by the government are; social welfare expenditures, human resources, social

programs, and, social benefits (Britannica, 2011), (Beland, 2015). From 1960- 2019, the

government outlays that numerous measures of social spending rose 1.9-3.0 times. Income

security programs, for instance, contain a combination of social insurance, and means-tested

welfare schemes such as social security, supplemental security income that offers benefits for

the aged, blind and disabled; unemployment insurance that offers revenue for persons who

are unwillingly jobless. Temporary assistance for needy families gives financial wellbeing

and other assistances for low-earning families. In 2019, the government used 1,621 billion

dollars on income security alone (US. Department of commerce, 2020).

The initial and current welfare states share the basic principles of; equal opportunity,

unbiased wealth distribution, and communal responsibility for people who are incapable of

providing for themselves with the basic necessities of a comfortable life. The American social

welfare, thanks to the works of Franklin Roosevelts, and the 1935 Social Security Act is

currently governed by two categories; social insurances, and public assistance. Institutional

arrangements in any society determine the population’s entitlement to welfare. The United

States thus has numerous diverse programs and a broad range of schemes for distribution of

financial and organisational control. The arrangements are commonly associated with the

“safety net” The Social Security Act, of 1935 shaped a centralised role in the U.S social

welfare policy. The arrangements provide Social Security and Medicare, Supplemental
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Security Income (SSI), Temporary Assistance for Needy Families, Medicaid, Unemployment

Insurance (UI), Earned Income Tax Credit (EITC), and Food Stamps. There has been an

increasing trend in social welfare expenditures over the years, both in complete measures and

as a percentage of the Gross National Product. This has in turn increased the importance of

the federal sector. Introduction of the Affordable Care Act, for instance, has expanded health

coverage to many uninsured Americans as it was designed to lessen the health insurance

cover cost for low-income families.

Welfares often cause inequalities of outcome. Inequality refers to disadvantage in a social

context. The main inequalities arise as a result of race, gender, class, and inequalities in

income and wealth. Inequality represents itself in the form of hierarchies, stratification, and

social division (Dollar, 2015). Inequalities of income have important implications for welfare

in both Germany and the United States. Societal roles, control the type of opportunities for

men and women. Comprehending gender disparities is hence vital for social policy, as factors

that affect women share in the plan that social policy must address as most of the concerns

such as poverty, wellbeing, and old age are associated with disparities in gender (Spicker,

2021). The German conservative model for a long-time recognised man as the breadwinners

and discouraged women from working. In the United States, the issues of gender have

become increasingly central to welfare organisations. Prominent issues associated with

gender equality in social welfare include property rights, education, and the role of maternity

in health. Issues of race/ethnicity have featured in numerous discussions regarding welfare

sociology; however, it is very challenging to identify strategies that directly relate with

ethnicity/race. The war on poverty in the United States has been over the years instituted to

represent a concern to include African-Americans into the political sphere. Poverty

discussions in the US remain racial in intention (Michener, 2020). Similarly, in Germany,

security of specific people is still racial in nature. This is evident from the numerous Articles
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that protect individuals and groups against racial discrimination. Therefore, even though

social welfare, in its widest sense, strives to create equality, scholars argue that global social

services are still not equally available to all persons.

Germany and the United States; Conservatism vs Liberalism

The American Liberal Welfare State as presented by Esping-Andersen (1990), is a welfare

state that encourages market as opposed to state when assuring that the welfare requirements

of the residents are met. That kind of state is referred to as the last resort because it responds

only to failure of the community and limits its assistance to means-tested groups determined

eligible for assistance. Its transfers are diffident and rules are very strict (Seeleib, 2016). The

regime also promotes social dualism among residents who are dependent on the market or

governmental necessities, private retirement pension, or societal aid. In addition,

demmodification is limited.

On the contrary, in the conservative welfare state of Germany, residents are covered by the

state-run umbrella. The market plays a major role in providing welfare. The regime does not

also encourage decommodification of labour, rather, it strives to maintain status, as well as

class differentials by offering different services according to social strata (Seeleib, 2013).

The two states, therefore, are supposed to contain dissimilar styles of welfare, as they

constitute examples of the Conservative and Liberal welfare regime. Categorising the US as a

liberal state stems from Kaufmann’s social study on the aspect of the social welfare state and

adopts an Anglo-Saxon understanding. According to the power resources theory, the

conservative welfare regime the role of Christian democracy in the conservative welfare state

explains why the United States has previously established a less inclusive and diverse welfare

system than Germany (Seeleib, 2013).

Throughout history, the German and American welfare arrangements have visibly

differentiated the insiders from outsiders of social protection. The insiders are defined as
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persons, mostly workers, covered by comprehensive statutory social protection, and

complemented by private social protection. Outsiders are the poor who have to rely on

modest provision. (Kaiser et al, 2012). Throughout the industrial welfare capitalism period in

the US, insiderness heavily depended on extra insurance through work-related benefits. Up to

the 70’s insiderness in the US was expanding, while in Germany the social insurance

schemes were striving to minimize the depth and breadth of outsiderness. The German

system post-war mainly relied on the extension of statutory insurance systems.

There are hence many differences between the two welfare regimes, one fundamental

similarity is that both of these systems are providing social benefits under significant and

ever-increasing strain, that threaten them both with failure. The crisis in both regimes has

been documented with increasing demographic shifts, and globalisation putting pressures to

reduce the generosity of these welfare states (Peters, 2005).

The German welfare regime has witnessed overall reforms since the late 1900s. Old-age

insurance, for instance, witnesses a reversal of early retirement policies. Even though general

work coverage has augmented in all areas after the pension reform, coverage remains uneven,

as in the United States. Such a development suggests an upsurge in the occurrence of social

security outsiderness in both Germany and US. There have been additional reforms in the

German unemployment insurance system which have immensely remodified the concept of

outsiders. A rise in enduring unemployment has caused a convergence of the German

unemployment compensation system to the American system. From this perspective, shifts in

German unemployment and pension systems suggests that the two welfare systems are

converging.

Conclusion

The welfare state is a structure that provides for the socio-economic needs of its citizens. It

utilises a large number of indicators such as social security, education, health and housing.
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Esping, in his 1990 study brought into light new classifications of the welfare states where he

classified the welfare states as either liberal, conservative, or social-democratic.

The German conservative Welfare System and the American Liberal welfare model

represent two of three welfare reforms suggested by Esping. Today, the two do not primarily

manifest in their institutional design arrangements, but have been shown to converge while

preserving their differences.

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