Electoral Rules, class coalitions and welfare state regimes: How to explain Esping-Andersen with Stein Rokkan *
Philip Manow (University of Konstanz;
[email protected]) DVPW Sektionstagung der Sektion ‘Politik und Ökonomie’, Kassel Dezember 2007
1.
Introduction What explains the emergence of different welfare state regimes? In this paper I suggest
to start from the analysis of the political class coalition behind the liberal/ Anglo-Saxon, the Social Democratic/ Nordic and the conservative/ continental welfare state (Esping-Andersen 1990). I take my inspiration from a recent contribution to the comparative welfare state literature which has – as I think convincingly – argued that electoral rules (basically PR versus plurality) have played a decisive role in class coalition formation in Western democracies (Iversen/ Soskice 2006). The main aim of my paper is to demonstrate that within the world of Proportional Representation electoral systems two distinct types of party coalitions have emerged and can explain differences in the formation and institutional setup of European welfare state regimes: a ‘red-green’ coalition in the Nordic countries between Social Democratic and agrarian parties, and a ‘red-black’ coalition between Social and Christian Democracy on Europe’s continent – whereas the liberal welfare state in the UK and the US is associated with the majoritarian electoral system and the two-party competition between a moderate-right and a moderate-left party to which it gives rise. The different class coalitions behind the Nordic and the continental welfare states point to differences in the cleavage structure between the north of Europe and the continent and to the concomitant differences in the Nordic and continental party systems: besides the basic left/ right, labor/ capital conflict present in all developed nations, we observe a urban/ rural cleavage in the north, ‘particized’ (Heather Stoll) by agrarian parties, and a strong state/
*
Many helpful discussions with Kees van Kersbergen are gratefully acknowledged. This paper is part of a larger project, ‘Religion and the Welfare State’ (see Kersbergen/ Manow 2006). Previous versions of the paper have been presented at the Center of European Studies, Harvard, at CEVIPOF/ Sciences Po, Paris, at CEPREMAP, Paris, at the Max-Planck Institute for the Study of Society, Cologne, at Korea University, Seoul, and at the Universities of Münster and Bern as well as the Political Economy Seminar at Oxford University. I am extremely grateful for the many helpful comments that participants in those seminars gave me. I am particularly indebted to Torben Iversen for his comments and encouragement and to Thomas Plümper for his support in questions of data analysis.
church cleavage in the continental countries, particized by parties of religious defence, i.e. Christian Democracy. The paper is structured as follows: Section 2 contains a brief review of the debate on the different cross-class coalitions in welfare state formation and growth. In section 3 I will then highlight the critical difference between the Nordic and the continental party systems: the presence (absence) of agrarian parties in Scandinavia (continental Europe) and the absence (presence) of parties of religious defence in the North (on the continent). I will also briefly sketch some of the welfare state consequences. Section 4 provides an empirical test of the argument demonstrating the effects of coalitions on welfare state development over the postwar era (from the sixties to the mid-nineties). Section 5 concludes.
2.
Welfare regimes and political class-coalitions For a long time variance between welfare states has been explained with cross-country
variance in working class’s strength. The dominant “power resources” approach in the comparative welfare state literature has argued that the welfare state was a project of “the left”, of social democratic parties and unions. Where the left was strong, the welfare state became generous and encompassing, where the left was weak, the welfare state remained residual. Yet, social democracy only very rarely was able to achieve an electoral majority on its own (Przeworski/Sprague 1986).1 The left almost always remained dependent on partners who would join them in their struggle for more social justice and equality, for workers’ better living conditions, and for the decommodification of labour. Esping-Andersen, in his seminal contribution to the comparative welfare state literature, therefore contends: ‘the history of political class coalitions [is] the most decisive cause of welfare state variations’ (Esping-Andersen 1990: 1). In the first chapter of his “worlds of welfare capitalism” book Esping-Andersen sets out to provide us with a stylized history of political class coalitions. He emphasizes three elements of such an account: the ‘nature of class mobilization (especially of the working class); class political coalition structures; and the historical legacy of regime institutionalization’ (Esping-Andersen 1990: 29). With respect to the first element, the mobilization of the working class, he is quick to add that working class strength itself does not help explaining much of welfare state development:
1
The Swedish SAP as well as the Austrian Social Democrats were able to obtain more than 50 % of the votes in single post-war elections.
‘It is a historical fact that welfare state construction has depended on political coalitionbuilding. The structure of class-coalitions is much more decisive than are the power resources of any single class’ (p. 30). He then goes on to stress the importance of the pro-welfare state support coalition between Social Democracy and agrarian parties in the Nordic countries, a coalition which could be expanded after the World War II to include the middle class. EspingAndersen explains the specific success of Swedish social democracy in building a generous welfare state with the fact that it succeeded to broaden the political support for a new kind of welfare state that ‘provided benefits tailored to the tastes and expectations of the middle classes’ (31). Without pointing out possible causes, Esping-Andersen goes on to state that in Anglo-Saxon countries ‘the new middle classes were not wooed from the market to the state’ and therefore these countries ‘retained the residual welfare state model’ (31). ‘In class terms, the consequence is dualism. The welfare state caters essentially to the working class and the poor. Private insurance and occupational fringe benefits cater to the middle classes’ (31). The continental welfare states, finally, also depended on the support of the middle classes, but out of – again not particularly well explained – “historical reasons” (ibid.) the outcome was different. ‘Developed by conservative political forces, these regimes institutionalized a middle-class loyalty to the preservation of both occupationally segregated social-insurance programs and, ultimately, to the political forces that brought them into being’ (EspingAndersen 1990: 31-32). As valuable as the distinction of the three regimes has proven for the comparative welfare state literature and as critical as the emphasis on the importance of ‘political class coalitions’ is, Esping-Andersen does not provide us with an explanation why these groups of countries followed so different institutional trajectories of welfare state development. His account rather “comes across as a post-hoc description” (Iversen 2006: 609), in particular since Esping-Andersen gives no systematic reasons why some welfare states were able to include the middle-class while other were not. In a recent paper Torben Iversen and David Soskice (Iversen/Soskice 2006) have proposed a different view on the political class coalitions behind welfare state formation and growth in the mature industrialized countries of the west. Their model does in fact provide us with a systematic explanation for the emergence of different political class coalitions in the advanced industrial countries, an explanation which lacks in the Esping-Andersen narrative. Iversen and Soskice start from the basic observation that in multi-party systems the left is in government more often whereas the right more often governs in two-party systems. Why is this so?
At the risk of oversimplification, their argument may be summarized as follows: In a simple model with three classes – the lower, middle and upper classes – and a system of (nonregressive) taxation and redistribution the middle class votes together with the lower class in a multi-party system more often than in a two party system. In a multi-party system the lower and the middle classes together can tax the rich and share the revenue. In a two party system the middle class can either vote for a centre-left party or a centre-right party. If the left governs, the middle class has to fear that the left government will tax both the upper and the middle class for the exclusive benefit of the lower class. If a right party governs, the middle and upper class will not be taxed and redistribution will be marginal. Therefore, in a two-party system the middle class has the choice either to be taxed and to receive no benefits, or not to be taxed and to receive no benefits. Obviously, it would prefer then not to be taxed. In a multi-party system, however, the middle class’s choice seems to be different. A coalition between a middle class party and a left party allows the lower and middle class to tax the rich and share the revenue, and within a coalition both can credibly commit to include the middle class among those benefiting from the welfare state. From this simple and highly stylized account it is clear that the middle class will more often vote together with the lower class in multi-party systems – or to be more precise: middle class parties will more often enter into coalitions with lower class parties in multi-party systems than in two party systems.2 As in Esping-Andersen’s sketch of different welfare state coalitions, Iversen and Soskice also develop a class-coalitional approach, but they provide us with a much clearer mechanism that explains the formation of different class coalitions. The authors stress electoral rules as the most important mechanism, electoral rules that either lead to multi-party systems and a generous welfare state or two-party systems and a residual welfare state. The critical analytical distinction therefore is the distinction between plurality and PR. In essence, Iversen and Soskice provide us with a highly elegant explanation for the fact that the left more often governs in countries with PR systems (and it is here the welfare state tends to be bigger and more redistributive), whereas the right more often governs in countries with majoritarian electoral rules – countries in which the welfare state tends to be less generous and more residual (see Table 1; Iversen/ Soskice 2006: 166).
2
The crucial assumption in the Iversen/ Soskice model is that centre-left parties in a two party system cannot credibly commit themselves to a political agenda tailored to median voter interests. Problems of credible commitment are more easily solved in coalition government. There is ample evidence that indeed a ‘coalition of parties’ functions differently than ‘coalition parties’ (Bawn/Rosenbluth 2003).
Table 1:
Electoral systems and the number of years with left and right governments (1945-1998)3 Government Partisanship Proportion of right governments Left Right Electoral Proportional 342 120 0.26 System (8) (1) Majoritarian 86 256 0.75 (0) (8) Number in parenthesis: number of countries that had an overweight (more than 50 %) of center-left or center-right governments during the 1945-1998 period But ever since the seminal contribution of Esping-Andersen we know that the level of spending per se is not what should interest us most, but rather the profound differences in the institutional setup between the European welfare states with their varying socioeconomic effects. It seems as if Iversen and Soskice with their distinction between generous and residual welfare states (and the corresponding distinction between PR and plurality rule) focus on levels of spending only, ignoring the profound consequences in the way spending is organized and targeted in Europe’s political economies. This motivates the question whether we can combine the class-coalition model of Iversen and Soskice with the three regimes approach of Esping-Andersen? I think that indeed we can link both, but this is possible only if we take into account the importance of societal cleavage structures, prominently among them: the religious cleavage. It is to these cleavages and their political manifestation in the West-European party systems that I would like to turn now.
3.
Cleavage structures, party systems and worlds of welfare: ‘a Rokkanian amendment’ The basic distinction between two-party systems and multi-party systems, between
majoritarian and PR-electoral rules, which Iversen and Soskice introduce in such a highly elegant and innovative way into the comparative welfare state literature, is also the starting point of my friendly amendment to the Iversen/ Soskice argument. Majoritarian electoral rules lead to a two-party system and confronted with the choice between the centre-left and the centre-right party, the middle class more often votes right than left. In such a two-party 3
Whether ‘years in government’ is a good measurement for the effects of electoral rules remains an open question. Since one of the effects of PR in Scandinavia is the frequent occurrence of minority governments, the measure might underestimate the importance of informal party coalitions between left and center parties. Therefore also vote shares should be considered when assessing the potential for policy influence of different parties (see below, Table 2a and 2b).
system mainly one societal cleavage is present, namely the one dominant in all advanced industrial countries, the left–right or labour–capital cleavage. All other cleavages are absorbed, latent or “incorporated” in this basic cleavage.4 A good example would be the fierce conflict between the Anglican high church and the Protestant dissent in Britain in the last quarter of the 19th century about the disestablishement of the Anglican church. This was a virulent conflict line between the Tories and the Liberal Party (Parry 1986), but quickly receded into the background once the Labour party crowded out the Liberal Party in the last decade of the 19th century and the first two decades of the 20th century. The religious dissent then lost its strong political representation in the party system and became influential within the two important parties, in particular within the Labour party – where Nonconformism strongly influenced Labour’s social policy program (see Pelling 1965; Caterall 1993). Here the basic mechanism described by Iversen and Soskice applies: plurality leads to a two-party system with a centre-left and a centre-right party, other social cleavages than the basic socioeconomic cleavage are absorbed, the middle class more often votes for conservative parties, the welfare state remains residual. In PR systems, in contrast, a larger (effective) number of parties represent more than the one dominant cleavage dimension in advanced industrialized countries, i.e. more than the conventional labour–capital cleavage. Which kind of additional cleavages are represented in the party system depends on the cleavage structure of the country in question. It is here that the distinction between the Nordic and the Continental countries and their welfare states becomes relevant. In the north of Europe a religious cleavage did not become politicized and “particized” (see Stoll 2005) because neither were these societies religiously heterogeneous nor had the “national revolution” (Rokkan) given rise to a strong state–church conflict. ‘All the Nordic countries belong to (and, indeed, collectively constitute) Europe’s sole monoconfessional Protestant region’ (Madeley 2000: 29). The northern Protestant churches as Lutheran state churches, in contrast to the Catholic church in southern Europe, did not feel fundamentally challenged when the new nation-state started to take over responsibilities which previously had fallen under the responsibility of the church (cf. Manow 2004; Kersbergen/ Manow 2008). In societies where "identification between church and state" was "total" (Gustafsson 2003: 51) there was not much reason to protest against the central state
4
The analysis of the impact of religion does not become irrelevant in this context, however, since it is of interest how the religious cleavage has played out itself within the dominant left–right divide. The role of Christian socialism and Nonconformism within the British Labour party and the substantial influence of these currents on the social policy program of Labour would be an example.
taking over responsibility in the welfare arena.5 Anti-clericalism never became a strong political current in the Scandinavian countries. A cleavage that did become politicized and particized was the cleavage between agrarian and industrial interests. It is in Europe’s north where strong parties of agrarian defence emerged and where they received a substantial share of the votes over the entire postwar period. The Finnish Agrarian Union (Malaisliitto), renamed Centre Party in 1965, in all elections between 1945 and 1970 won between 21 and 24 percent of the vote. Even in the 1970s and 1980s the Centre party never received less than 17 percent of the vote, in the general elections of 1991 the agrarians even became the biggest party with almost 25 percent of the vote, three percent more than the social democrats (see Caramani 2000: 275-289). Electorally less successful, but still with an impressive electoral record, was the Swedish agrarian party, the Bondeförbunet, renamed Centerpartiet in 1957. It gained between 12 and 16 percent of all votes in the 1950s and 1960s, and then even increased its vote share substantially in the 1970s, gaining up to 25 percent of the vote and becoming the second largest party behind the social democrats. In the 1980s and 1990s, the agrarian party then again lost much of its former strength and had a vote share of 15 percent in the early 1980s down to 5 percent in the late 1990s. The Norwegian Bondepartiet (since 1961 Senterpartiet), smaller than its Finnish or Swedish counterparts, received around 9 percent on average throughout the 1950s and 1960s, won slightly more than 10 percent of the vote in the 1970s, and then fell back a bit and remained between 6 and 8 percent in subsequent elections (with the exception of the 1993 election where the agrarian party got 16.74 percent and was the third largest party in the Storting; see Caramani 2000: 762-775). In Denmark the agrarian vote was very much concentrated in the liberal party, the Venstre or “Agrarian Liberals” (Johansen 1986: 351), established in 1870 as ‘a derivation of the Bondevennerne, the peasants’ friends’ (Caramani 2000: 204).6 The Liberal Venstre always won more than 20 percent of the vote in the elections between 1945 and 1966, and became the
In fact, the notion of separate spheres for church and state was not very well developed: In Sweden, priests were civil servants; as late as 1858, anyone who converted to Catholicism could be exiled. It was only in the late 1920s that parishes had to give up their monopoly on education, and it was only in 1952 (!) that the Swedish state granted full religious freedom as a matter of law. "Nobody was henceforth forced to belong to the Church of Sweden against his or her own free will" (Gustafsson 2003: 55; Petersson 1994: 196). 6 Caramani does not include the liberal or radical Venstre in his group of parties of agrarian defence (Caramani 2004: 181-185) and the agrarian character of this party may be somehow contested. My main empirical findings would not alter once we exclude the Venstre from our analysis. Historically, it is quite apparent that the Danish agrarians repeatedly formed a coalition with Social democrats for major welfare reforms. See for instance the description of the Kanslergade Agreement in 1933 in (Luebbert 1991: 267-268; see below). 5
second largest party behind the social democrats. As a split from the Venstre/ Liberals det radicale venstre was established in 1905. Whereas the Liberals represented the interest of large farms, the Radicals rather defended small farm interests (Huber/Stephens 2001: 141). Whereas the larger Venstre was a party with a decidedly liberal (in the European sense) agenda, the radical Venstre was often decisive in securing a social democratic majority in government, either through directly participating in government, or through tolerating governments led by the Social democrats. Although with a smaller vote share than the Liberals, the Radicals were often pivotal in government formation and therefore proved important for Danish social policies in the first post-war decades. In sum, the distinguishing feature of the Scandinavian party systems is the strong role that agrarian parties play in them. Over the entire postwar period from 1945 to 1999 agrarian parties in Finland, Norway and Sweden gained on average 20.6, 13.9, and 8.9 of the vote (the Danish Venstre 18.5 percent of the vote, det radical Venstre on average 7.3 of the vote in the 21 postwar elections until 1994). No comparable figures can be found in any other European party system except in Switzerland, where the Schweizerische Bauern-, Gewerbe- und Bürgerpartei (since 1971 Schweizerische Volkspartei) gained more than 10 percent of the votes in each election in the postwar period (cf. Caramani 2004: 181).7 In all other European countries ‘the urban–rural cleavage was incorporated into other party alignments – state church and left–right in particular – and did not give rise to specific political parties’ (Caramani 2004: 184). Given the strong position of the agrarian parties, it comes as no surprise that almost all accounts of the historical development of the Nordic welfare state stress the importance of red–green coalitions for the formation and the subsequent expansion of the welfare state in Norway, Sweden, Finland and Denmark (see Olson 1986: 5, 75; Esping-Andersen 1990: 30; Huber/Stephens 2001, for Norway see 131, 132; for Finland see 134, 135, 138; for Denmark see 141, 142). The influence of the agrarian or centre parties was due to their pivotal position within the Scandinavian party systems. When not itself a part of the government coalition, centre parties tolerated the minority governments often led by social democrats, especially in Norway and Sweden (see Narud/Strom 2000; Bergman 2000; Strom 1984). Social legislation depended on their consent and therefore was tailored to the agrarian needs and interests. In a way one could say that the place occupied by agrarian parties in the north is occupied by Christian democratic parties on the continent. The German CDU, the Dutch
7
The Bauern-, Gewerbe- und Bürgerpartei – however – is much more regionally concentrated, much less nationally dispersed than the Nordic agrarian parties.
CDA, the Austrian ÖVP, the Belgian CVP/PSC (Parti social-chrétien or Christelijke Volkspartij), the Italian Democrazia Cristiana or the Swiss Christlich-Demokratische Volkspartei are parties with their roots in political Catholicism. They are the offspring of the fierce state–church conflicts in the last quarter of the 19th and the first quarter of the 20th century – in the Belgian case offspring of the national independence movement of the Catholic southern provinces against the Protestant northern provinces of the Low Countries. In other words, also in these countries (which all introduced PR no later than 1919) we have a relatively high (effective) number of parties and, subsequently, more than one cleavage is represented in the party system. However, instead of the urban–rural cleavage which was prominent in the religiously homogenous Protestant north, here in the religiously mixed or homogenously Catholic (like Belgium and Austria) countries the state–church conflict is prominently represented in the party system in addition to the dominant left–right cleavage. Both with respect to vote shares and with respect to time in government, the Christian Democratic parties have been dominant (if not hegemonic like the Italian Democrazia Cristiana) in the continental countries. Since Christian Democratic parties combined the religious and large parts of the bourgeois vote, their electoral fate was better than that of the Nordic agrarian parties. Only counting the vote shares of the Catholic parties like the Österreichische Volkspartei, the Christlich-Demokratische Union, the Democrazia Cristiana, the Christen Demokratisch Appèl (and its former member parties like the Katholieke Volkspartij)8 and the Parti social-chrétien or Christelijke Volkspartij of Belgium (and ignoring the Protestant parties in these countries for a moment), it becomes evident that Christian Democracy was much more successful than the agrarian parties in Scandinavia. On average, the Belgian PSC or CVP received 34.9 percent of the vote in all elections that took place between 1945 and 1999, the German Christlich-Demokratische Union gained on average of 44.2 percent of the vote during this period, the Katholieke Volkspartij (and later the Appèl) gained on average 28.6 percent of the vote in the same period, the Austrian Volkspartei received 41.5 percent, the Italian DC received 33.8 percent of the vote. And if we don’t count the elections after the breakdown of the first Italian republic – that is if we discard the elections after 1992 – than this share rises even to 37.9 percent. The Swiss ChristlichDemokratische Volkspartei won around 20.9 percent of the vote. At the same time, parties of agrarian defence remained largely absent in continental Europe. The urban–rural cleavage
8
Since part of the joined Christen Demokratisch Appèl were the Anti-Revolutionary Party and the Christlijk-Historische Unie, we cannot speak anymore of a purely Catholic party after 1975. Numbers from before 1975 however refer to ‘purely’ Catholic parties, mainly the Katholieke Volkspartij.
dimension remained latent and was not politicized and particized in the continental welfare states. To be clear, there have been and still are religious parties in the Nordic countries – the most important, electorally most successful being the Norwegian Kristelig Folkeparti founded in 1933 (the Finnish Christian League, Suomen Kristillinen Liitto was founded in 1958; the Swedish Kristen Demokratisk Samling was founded 1964; the Danish Kristeligt Folkeparti was founded in 1970), and there has been at least one agrarian party in continental Europe, namely the Swiss Bauern-, Gewerbe- and Bürgerpartei. Yet, in most continental countries the urban-rural cleavage dimension remained latent, it was not politicized and particized, and parties of religious defence remained marginal, without any substantial influence on post-war welfare state development in Scandinavia. As Daniele Caramani has stated in his seminal account of the emergence of national party systems, the basic socio-economic left-right divide across the European nations had an enormously homogenizing influence on European party systems: “Territorial structures of the vote in European party systems are very similar with regard to the liberal, conservative, social democratic, and – to a lesser extent – communist and green party families (…). European party systems differ from each other because of the ‘deviating’ patterns on the three dimensions for the defence of agrarian interests, the defence of regional specificities and religious differentiation – in particular that of Catholic populations in religiously mixed nations” (Caramani 2004: 191). This basic dimension of variation between the Nordic and the continental party systems becomes apparent once we compare the electoral fate and the varying government participation of agrarian parties and of parties of religious defence in Europe’s north and on the continent (see Tables 2a and 2b).
Table 2a: Average vote share of agrarian parties and parties of ‘religious defence’ in all post-war elections 1945-19999, 11 West-European countries Scandinavia 15.46
Continental Europeb 1.65
2.98 36.66
30.13c 28.82d
a
Agrarian parties Parties of religious defence Social Democracy a
Sweden (17), Norway (14), Denmark (22), Finland (15). Netherlands (16), Belgium (17), Germany (14), France (14), Austria (16), Switzerland (13), Italy (14); number of elections in parenthesis. c 34 % without France; almost 35 % if only Italy’s first republic is taken into account. d 32.72 % if France and Italy are not taken into account. b
Table 2b: Average years in government for agrarian, social-democratic and christian democratic parties 1945-199910, 11 West-European countries Scandinavia 18.2c
Continental Europeb 2.1
6.4 44.7
43.5 34.3
a
Agrarian parties Parties of religious defence Social Democracy a, b
Countries as above; see notes to Table 2a. c the Venstre has been coded as a liberal party, det radical Venstre as an agrarian party; I have only counted one agrarian party per government, so for instance the Finnish Agrarian Union and the Swedish people party, which are both classified as agrarian parties in the CMP, have been counted only once if they both were part of the government at the same time.
What this suggests is that the Nordic and the continental welfare states were indeed products of two different kinds of party-coalitions. The social democratic generous welfare states which we find in the Nordic countries have been the result of a coalition between social democratic parties and parties of agrarian defence. On Europe’s continent, in turn, we find welfare states that are the product of a coalition between Social and Christian Democracy – in some countries where the left has been divided into a socialist and communist party with the latter banned from governmental power for most of the post-war period (like in Italy), the welfare state was a product of Christian Democratic hegemony rather than the result of a redblack coalition. Liberal, residual welfare states, however, are to be found in countries with a majoritarian electoral system in which only one political cleavage dimension is present (exemplary case: the UK).
9
Vote shares were calculated based on (Caramani 2000). Parties are classified following the Comparative Manifesto Project, see (Budge, et al. 2001), government participation was calculated based on Woldendorp, EJPR political data book and Thaglarsson. I thank Holger Döring for invaluable assistance in data collection and data analysis.
10
What I propose here, in other words, is a Rokkanian complement to the Iversen and Soskice explanation for different welfare state class coalitions. I contend that this complement allows explaining which type of middle class has entered into a coalition with social democracy, an insight which will also allow us to explain the type of welfare state to which these party political class coalitions have led. What is important in our context is a) the absence of a strong religious cleavage in the Scandinavian countries (due to the homogenous religious structure plus the very close relation between the state and the Lutheran state churches) and b) the fact that the urban rural cleavage itself which got ‘particized’ in Scandinavia was largely a socio-economic cleavage. Put differently: the strong state-church conflicts on Europe’s continent and the Christian Democratic parties of religious defence which have been their offspring introduced the representation of a clearly non-economic issue into the party systems of continental Europe. The advent of agrarian parties in the party systems of Scandinavia, in contrast, reflects specific economic interests in these late industrializing countries with a strong employment share of the primary sector during the era of mass-democratization. In the terms of the Rokkan/ Lipset cleavage theory: whereas the conflict between workers and owners caused by the industrial revolution proved to be ‘more uniformly divisive’ for all European party systems, these party systems differ between the Nordic and the continental countries in that the industrial revolution gave birth to parties reflecting the conflict between primary and secondary economy in Scandinavia, whereas the national revolution gave birth to – predominantly – Christian Democratic parties on the continent (Bartolini/Mair 1990: 55-67; Ferrera 2005: 16-28; see Figure 1). I contend that this explains much of the differences with which both kinds of welfare states addressed economic issues, in particular issues of sectoral change.
Figure 1: Cleavage structures and welfare states
Primary/ secondary sector Industrial revolution
Scandinavian WS
Labor/ capital
UK (liberal WS)
Continental WS State/ church
National revolution
Dominant/ minority culture
The systematic differences in the party systems of the North and the continent are reflected in the party positions of agrarian parties and Christian democratic parties in the social policy dimension. If we take the increase taxes versus cut spending dimension ranging from 1 to 20 in the most recent Benoit/ Laver (2006) expert survey (with higher number indicating a stronger leaning to the ‘cut spending’ extreme), we see that Christian Democratic parties on Europe’s continent are systematically and substantially more left-leaning than liberal parties, and the same applies to the Agrarian parties in Europe’s north (see Table 3). Therefore, both types of parties were – so to speak – Social Democracy’s natural pro-welfare allies. However, as representatives of different societal interests, agrarian parties in the North and Christian Democratic parties on the continent wanted quite different types of welfare states.
Table 3:
Party positions on the increase taxes (1) versus cut spending (20) dimension (Benoit/ Laver 2006) Conservatives Christian Democracy
Agrarian Liberals Parties
14,687 (ÖVP) 9,36842 (CDH) 10,913 (CDV) 13,2727 (CDA) 9,68421 (CU) 14,4 (CDU/CSU)
Social Democracy
13,875 (FPÖ) 14,25 (MR) 16,3913 (VLD) 16,7727 (VVD)
7,5 (SPÖ) 4,95238 (PS) 7,30435 (SP) 8,0909 (PVDA)
18,7128 (FDP)
9,32292 (SPD)
Conservatives Christian Agrarian Democracy Parties
Liberals
Social Democracy
Sweden Norway Denmark
17,6866 (MSP) 16,7619 (H) 15,32 (KF)
11,4394 (C) 6,333 (SP) 10,36 (RV)
13,4627 (FP) 12,2381 (V) 14,84 (V)
7,1194 (SAP) 6,61905 (DNA) 7,4 (SD)
Finland
15,7879 (KOK)
9,45455 (KESK)
Austria Belgium Netherlands Germany
8,39394 (SDP)
How have the different party coalitions in Europe’s north and on it’s continent led to different welfare regimes? Here is not the place to go into much detail, but some systematic differences are evident: agrarian parties in the North, for instance, were against income differentiated social benefits which social democrats favoured (cf. Olson 1986; Johansen 1986), they rather preferred more universalist, flat rate benefits. Many small landholders could not look back at long histories of steady income and therefore feared that they would be actually unable to benefit from welfare entitlements which were contribution financed with contribution-related benefit levels (cf. Baldwin 1990: 55–94). Christian democratic parties, on the other hand, which mobilized workers as did their social democratic counterparts, had no reason to object to differentiated contributions and entitlements. Quite to the contrary: since contribution finance limits redistribution, it offered a compromise between middle-class and lower class interests both represented in Christian Democratic parties. Other important differences concern the integration of the churches in the continental welfare states in the provision of social services (hospitals, old-age homes, kindergartens etc.) as compared to state provision of these services in the Nordic countries. Agrarian parties were also strongly in favour of financing the welfare state through (indirect) taxation because this promised to shift ‘the expense of meeting risk from the most progressively assessed levies of the day – the direct land taxes they [the agrarians] paid to underwrite the poor-relief system – to the consumption habits of their urban political opponents’ (Baldwin 1990: 64; see also Luebbert
1991: 267-268). Red-green coalitions had formed already in the interwar period and foreshadowed the post-war pro-welfare compromises between Social Democrats and agrarian parties in these countries. A good example for the nature of the deals struck between workers and peasants is the Danish Kanslergade agreement of 1933 between Social Democrats, the Agrarian Liberals and the peasant organizations. “Its main features were (i) expansion of the public sector, (ii) a prohibition against strikes and lockouts and a wage freeze for one year, (iii) social welfare reforms, (iv) a 20 million kroner reduction in agricultural property taxes, (v) a reduction of agricultural interest rates and state assistance in the conversion of more costly loans, (vi) continuation of earlier debt relief programs for farmers, (vii) state subsidies for farmers who reduced their livestock inventories, and (viii) a devaluation of the krone from 18.16. to 22.50 pound per sterling” (Luebbers 1991: 268). Similar agreements were reached in Norway and in Sweden in 1935 and 1933 (ibid.). Important in our context is that these peasant/worker accords already addressed the question of sectoral change, an issue that would become central again in the 1950s and 1960s (see Iversen 2001, Iversen/ Cusack 2000). In fact, since all cleavages represented in the Nordic party systems were socio-economic in nature, and since agrarian parties were pivotal political players in Scandinavian politics since the 1930s, I claim that sectoral change from primary to secondary sector was a very salient issue in Scandinavian social policy, a problem with direct impact on the welfare state. One of the consequences of this argument would be to differentiate between the loss of employment in the primary and in the secondary sector when looking at the nexus between ‘de-industrialization’ and welfare state expansion in the postwar period (for a joint treatment see Iversen/ Cusack 2000 and Iversen (2001).
4. A methodological implication and an empirical test: the effects of coalitions on postwar welfare state expansion The argument presented here has at least one important methodological implication and this section is devoted to it’s brief discussion. The argument’s most important implication, in my view, is that it forces us to rethink how to best measure the impact of political parties on government policy. A good discussion of this topic can be found in Evelyne Huber’s and John Stephens’s excellent ‘Crisis and Development of the Welfare State’ (Huber/ Stephens 2001). After a lengthy discussion of various ways to account for party influence, Huber and Stephens argue in favour of a cumulative cabinet share index which measures cumulative years in government per party (type) weighted for every year with the strength of the representation in
government (based on portfolio shares).11 Huber and Stephens argue: “it is clear that one would not hypothesize that it was only the partisan cabinet share the year before or the average of the previous few years that should determine the level of expenditures or employment in a given year, but the rather the cumulative cabinet share over a long period of time” (61). In particular, the authors claim that their measure allows accounting for the longterm shifts in societal power relations caused by longer periods of either conservative or left rule via mechanisms like policy ratchet effects, adaptive preference formation of those whose interests are not represented in government (‘structural limitation’; see also (Korpi 2006)) or via ‘ideological hegemony’ (see Huber/ Stephens 2001, 28-31). Thus, after measuring the influence of parties with the help of the cumulative cabinet share of certain types of parties (e.g., Social Democracy or Christian Democracy) Huber and Stephens highlight as their central result that “the dominant political coloring of the incumbent government – social democratic, Christian democratic, or secular center right – over the three or four decades after the war is the most important determinant of the kind of welfare state that a given country had in the early 1980s; its generosity, the structure of its transfer payments, and the type and volume of services it offered” (Huber/ Stephens 2001: 1; italics added). In the light of a (class-)coalitional approach this, however, appears to be a rather problematic statement. Given the predominance of coalition governments (due to PR) in those Nordic and continental countries which have built generous welfare states in the post-war era and given the emphasis which Esping-Andersen (to which Huber/ Stephens keep referring in the affirmative) among many others has put on the necessity to forge broader welfare state coalitions between working- and middle-class, it is hard to see how ‘the dominant political coloring’ of a government - measured as government participation of single parties - should have been the most important determinant of welfare state development. Our methodological concepts should be in line with our theoretical ones, and therefore an emphasis on political class-coalitions requires accounting for the impact of coalitions instead of single parties. Unless we are prepared to argue that portfolio responsibility for social policies always laid in the hands either of Social or Christian democrats and that the respective ministers could act as ‘policy dictators’ (Laver/ Shepsle) we would need measurements accounting for the joint policy position of coalition governments. This can be the position of the median party in a coalition or a coalition’s policy mean (Powell 2000). We would also need to account for Huber/ Stephens claim that cabinet shares should be preferred over the fraction of a party’s seats in parliament of all governing parties’ seats since cabinet share „measures direct influence on policy“ (p. 55). Yet, given that portfolio allocation in coalition governments follows the Gamson-rule, i.e. is proportional to seat share, one could take either indicator.
11
minority governments, which in the past formed frequently in Nordic countries. It is hard to believe that a Social democratic minority government tolerated by an agrarian (center) party would have been able to enact social policies which did not reflect agrarian interests at least to some extent. The Huber/ Stephens measure, which counts portfolio shares (and therefore codes the policy influence of Social Democracy in case of a social democratic minority government as 1), tends to overestimate the impact of Social Democracy.12 In my view all this speaks in favour of taking an alternative route: we should combine data on government composition with information about parties’ actual policy positions (cf. Cusack 1997; Iversen/ Cusack 2000; see now Cusack/ Engelhart 2002; Cusack/ Fuchs 2002). The latter can be obtained either from the Comparative Manifesto Project or from one of the various expert surveys on parties’ policy positions that have been conducted in the last 10 to 15 years (Benoit and Laver 2006; Huber and Inglehart 1995; Laver and Hunt 1992; Castles and Mair 1984). Combining these data sources allows us to calculate yearly ‘coalition means’ or ‘coalition medians’ in the policy dimension of interest (here: the left/right or ‘increase taxes versus cut spending’-dimension). Given coalition partners’ joint responsibility for the government agenda, parties in power usually compromise on policies, at least on the major pieces of legislation. This is why the policy position of a given coalition should be a better predictor for its policies than any indicator which measures the years of government participation of any single party. In order to assess whether the coalition mean or median does indeed more efficiently predict welfare state development I calculated these for 13 large OECD countries13 over the entire post-war period. Basis was the Benoit/ Laver 2006 expert survey which provides information both on parties’ basic left-right placement as well as on their position on the ‘increase taxes versus cut spending’ dimension (with 1 marking the extreme left and 20 the extreme right position).14 Combining the information on parties with data on government
12
Overestimation can be expected to be substantial, since minority governments have occurred much
more often in Scandinavia than in other countries (Strom 1984). For all governments formed between 1945 and 1982 Kaare Strom has calculated shares for minority governments of 87 % (Denmark), 30 % (Finland), 56 % and 53 % (Norway and Sweden; on average for all four countries a share of about 57 %). For the other 11 countries of his 15 country sample the average frequency of minority governments is around 30 %. Australia, Austria, Belgium, Denmark, Finland, Germany, Netherlands, Ireland, Italy, New Zealand, Norway, Sweden, USA. 13
14
Assigning the policy positions generated in 2006 retrospectively to political parties for the 1960s
may be seen as highly problematic. However, given that parties offer distinct ideological bundles to
composition (Woldendorp, Keman et al. 2000) allowed me to derive yearly coalition means. These I inserted into two prominent welfare state studies of the recent past, the 1998 Garrett/ Mitchell study and the 2001 Huber/ Stephens study. I am not interested in an exact replication of these two studies, rather in assessing the impact of the left-right coalition mean under inclusion of a battery of control variables. To capture the long-term impact government composition I calculated moving averages of my coalition mean variable. Given that my time series for the independent variable (government consumption) starts in 1961, my ‘coalition mean’ variable for 1961 reflects the government composition of the previous 10 to 15 years (starting with the first post WW II elections). Table 4 contains the results of a pooled analysis with panel corrected standard errors and different lags of the dependent variable under inclusion of other variables out of the Garrett/ Mitchell data set. Table 5 reports very similar results for data taken from the Huber Stephens welfare state data set, this time for a dependent variable (government consumption) in first differences. Otherwise, the model specification in Table 5 largely follows the original Huber/ Stephens study (cf. 2001: 68-69). In both settings I compare the performance of the ‘policy mean’ variable with the cumulative cabinet share variable generated by Huber and Stephens. The results are stable and show – as expected – a strong negative coefficient for the ‘coalition mean’ variable (recall that a left government scores low on the 1 to 20 left/ right scale, so a negative sign confirms that left governments spend more than right governments). This result remains stable in a conventional crosssection OLS regression (not reported) or in pooled regression with fixed effects (see Appendix). While the coalition mean variable proves to be significant both under the inclusion of the lagged dependent variable with a one or a five year time lag, the cumulative cabinet share variables better predict the more long-term trend in government spending, probably because the cumulative variable itself behaves like a trend variable. Important for our context, however, is the fact that the policy position of a coalition does not anymore allow ascribing the policies implemented exclusively to one single party. Only case studies then allow us to identify the policy impact of members in a coalition government.
voters, they don’t move freely in political space. The assumption of relatively stable policy positions therefor seems not all that heroic. In future versions of this paper I will cross check my findings with CMP data reaching back to the 1960s.
Table 4: Pooled analysis with Panel Corrected Standard errors, dependent variable ‘government consumption’, 1961 - 1994 (1 year lag) (1 year lag) (5 year lag) (5 year lag) Lagged dependent 0.958 0.976 0.870 0.846 variable (137.07)** (111.87)** (25.32)** (22.83)** Unemployment -0.075 -0.048 -0.008 -0.019 (8.32)** (5.29)** (0.24) (0.66) Growth -0.176 -0.139 -0.173 -0.169 (13.78)** (12.49)** (4.12)** (4.73)** Dependency ratio 0.011 0.033 0.248 0.151 (0.84) (3.64)** (5.28)** (4.48)** Left right placement -0.069 -0.269 (6.16)** (8.30)** Cumulative left 0.001 0.046 cabinet share (0.28) (3.55)** Cumulative CD -0.002 -0.017 cabinet share (0.79) (3.16)** Constant 2.116 0.008 -1.898 -1.697 (4.02)** (0.02) (1.01) (1.66) Observations 407 565 363 501 Number of groups 13 18 13 18 2 R 0.984 .986 .849 .884 z statistics in parentheses; * significant at 5%; ** significant at 1%
Table 5: Pooled analysis with Panel Corrected Standard errors, dependent variable first difference in ‘government consumption’ 1961 - 1994 Dependent variable: ∆ government consumption Government consumption t-1
-0.022 (1.63) Left/ right placement -0.042 (5.03)** Population 65 and over -9.781 (4.08)** Strikes -0.001 (0.47) Authoritarian Legacy 0.122 (1.39) Non-majoritarian institutions 0.028 (1.53) Neocorporatism 0.477 (3.70)** Female labor force participation -0.021 (1.15) GDP per capita 0.000 (4.65)** Unemployment -0.051 (4.86)** Left cabinet share 0.005 (1.22) Christian Democratic cabinet share -0.013 (10.62)** Constant 1.771 (4.99)** Observations 336 Number of groups 13 z statistics in parentheses; * significant at 5%; ** significant at 1%
5.
Outlook
This paper presented a new argument how different political class coalitions have led to different types of welfare states. Electoral rules and societal cleavage structures figured prominently in this account. There is a striking isomorphism between Europe’s worlds of welfare and Europe’s differently structured party systems. I argue that this is not by chance. This suggests accounting for societal cleavages structures when analyzing the effect of electoral rules (via party systems) on types of political economies. Important in this respect is
to take into consideration that a religious conflict was absent in the North of Europe, but marked on the continent.
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Appendix: Table 5a: pooled times series cross section regression with fixed effects, dependent variable, government consumption 1961-1994 Strikes -0.014 -0.020 (2.01)* (3.23)** Non majoritarian institutions -2.758 -1.881 (6.05)** (4.41)** Unemployment rate 0.231 0.254 (5.32)** (7.38)** Neocorporatism 4.123 0.986 (2.78)** (0.82) Population 65 and over 90.886 71.337 (7.32)** (7.37)** GDP per capita -0.000 -0.000 (0.66) (4.33)** Left right placement -0.629 (2.91)** Cumulative left cabinet share 0.208 (7.81)** Cumulative CD cabinet share -0.065 (2.82)** Constant 17.385 10.098 (5.16)** (6.91)** Observations 336 449 Number of groups 13 18 R-squared 0.65 0.66 Absolute value of t statistics in parentheses; * significant at 5%; ** significant at 1%
