Asset Building Financial Inclusion Working Paper

Rediscovering Social Investment in Developmental Welfare State Policies (DWSP): Back to the Future

The recent stress on the productive potential of social policy provides a new economic rationale for social policy provision. However, it is a mistaken perception that the majority of social policies need to be radically adjusted to changes in the economic and social order. Rather, this paper argues that we need to better understand the ways in which long-standing policies have enabled and continue to facilitate adaptation to ongoing social and economic changes. To fail to do so risks severing or otherwise upsetting vital social policy synergies. The paper is based on a dissertation that developed a conceptual framework for thinking about social policies in the welfare state that may be both protective and productive; that is, that reduce posttax/transfer poverty without decreasing pretax/transfer (market) earnings. Observing that some countries with expensive social policies appear to be able to achieve high poverty reduction without adverse effects on economic performance, the study argued that theoretical explanations for this pattern are lacking. Applying social developmentalist ideas to the welfare state literature, it argued that the severity of the tradeoff between efficiency and equality may vary by the types and combinations of social policies that countries employ. The study offered a theoretical explanation for how and why different types of conventional social policy that occur across welfare states might be expected to produce outcomes that are simultaneously protective and productive. This paper describes the logic underlying the effects of what the author defines as developmental welfare state policies (DWSPs).

Citation

Johnson, K. (2014). Rediscovering social investment in developmental welfare state policies (DWSP): Back to the future (CSD Working Paper No. 14-02). St. Louis, MO: Washington University, Center for Social Development.