Both the non-Marxist theory and the Marxist theory are largely functionalist in character given their assumption that these developments are the necessary consequences of industrialization, and have thus been criticized as deterministic, paying little attention to the choices made by actors or to variations in response from place to place (Ashford, 1986). Nevertheless, these theories contributed to generalizations about welfare development, taking the discussion away from naïve emphases upon ‘progress’ or the growth of compassion. Industrialization was of course recognized as making an important contribution to increases in the standard of living, and with higher levels of personal income comes the possibility for the state to raise high levels of taxes to pay for social policies. Some exponents of the modernization thesis went on to consider the demographic effects of industrialization, urbanization and high levels of income, specifically lowered birth rates and raised life expectancy (for example Wilensky, 1975).
These emphases upon modernization were challenged by others who either sought to examine the quantitative evidence more carefully, recognizing the absence of a simple correlation between, for example, social expenditure and national prosperity (Flora and Heidenheimer, 1981; Pampel and Williamson, 1989), or sought to add qualitative considerations (Higgins, 1981; Ashford, 1986; Flora, 1986). These studies, and particularly the latter group, recognized that even if there were broad general influences to which countries were responding, there was a diversity of ways of doing this. This diversity might arise because of the varying strength of the influences on social policy development from country to country. Hence, attention shifted very much to the varieties of welfare arrangements, stimulated by the increased recognition of the complex influences upon policy change and also perhaps by the evidence that the convergence predicted by some of the earlier theorists was not occurring. It was from this that the approach that now dominates comparative social policy studies – regime theory – arose.
Esping-Andersen’s regime model
The origins of Esping-Andersen’s argument about how distinct types of welfare systems may be distinguished lie in work by Titmuss (1974; reproduced in Alcock et al., 2001), which suggests that three models may be distinguished according to their principles of redistribution:
•The institutional redistributive model, which provides services regardless of market participation and is based on the principle of need.
•The industrial achievement model, which holds merit (interpreted as productivity) as the determinant for meeting welfare needs.
•The residual welfare model, which assumes the private market and the family to be the main sources of welfare, with the state only coming into play temporarily when these institutions break down.
Taking his lead from these ideas, Esping-Andersen’s (1990) approach to comparative analysis is rooted in the notion that some social policy systems may reflect and contribute to social solidarity. It also derives from arguments which have seen social policy development as an important element in the alleged ‘truce’ between capital and labour within democratic societies, in which social policies may be concessions to the latter that contribute to the preservation of the capitalist order (Streeck, 2014). The concept of ‘decommodification’ is used by Esping-Andersen to define the extent to which some policy systems achieve a universalism which treats all sections of society alike. Decommodification is used to describe the extent to which individuals’ social entitlements are relatively independent of their positions in the labour market.
Esping-Andersen (1990, pp. 26–7) identifies what he describes as three regime types:
1.The ‘liberal’ welfare state, in which means-tested assistance, modest universal transfers or modest social insurance plans predominate. This indicates low levels of ‘decommodification’. The word ‘liberal’ in the definition refers to liberal economic ideas which see the free market as the ideal device for allocating life chances, and the primary role for the state being to enhance economic efficiency. Esping-Andersen puts Australia, the US, New Zealand, Canada, Ireland and the UK (with some qualification) in this category.
2.Nations which Esping-Andersen labels as ‘conservative’, where state-led development significantly shaped the evolution of social policy institutions. In these societies neither strong pro-market ideologies nor democratic movements were important for this development. Instead, a strong state sought to incorporate interest groups to ensure their support for the regime, hence the use of the term ‘corporatist’ to also describe the welfare character of these nations. The consequence was welfare systems in which ‘the preservation of status differentials’ is more important than either ‘the liberal obsession with market efficiency’ or ‘the granting of social rights’. This second category includes Italy, Japan, France, Germany, Finland, Switzerland, Austria, Belgium and the Netherlands.
3.The ‘social democratic’ countries, those ‘in which the principles of universalism and decommodification of social rights was extended also to the middle classes’; in these places ‘the social democrats pursued a welfare state that would promote an equality of the highest standards’. Denmark, Norway and Sweden are the nations in this category.
The decommodified systems of the Nordic countries are thus contrasted with conservative and liberal systems which more clearly reflect labour market divisions and market ideologies. These are attempts to classify national systems as a whole; the inclusiveness of the Nordic system is seen relative to other systems. But it is important to bear in mind that in this approach the nations in the ‘conservative’ group are not simply identified as middle ones, with levels of spending between the other two. They may indeed be high spenders; the key point is that such spending will tend to be distributed proportionately across the socio-economic spectrum in ways which are likely to reflect Titmuss’ idea of ‘merit, work performance and productivity’. The method Esping-Andersen adopted to develop his regime model involved comparative statistical analysis of the extent to which some key social security benefits delivered extensive social support without making labour market participation a crucial qualifying condition. Decommodification is thus a variable, systems being placed along a commodification–decommodification continuum.
Esping-Andersen justifies his approach in two ways. First, he argues against the ‘simple class mobilization theory of welfare state development’ in which welfare development can be seen as coming from the growth of demands by less advantaged people through an emergent democratic political process. Instead he sets out a more complex theory which can be seen as built upon that idea. He presents a picture of regime development in which historical forces are interactive. Political coalition formation is seen as contributing in distinctive ways to ‘the institutionalisation of class preferences and political behaviour’ (1990, p. 32). Empirically, Esping-Andersen explores the influence of selected independent variables – a measure of the share of Left parties in government, a measure of the share of Catholic parties and ‘absolutism’ alongside measures of GDP per head and GDP growth – and shows that