Disappointing poverty trends: is the social investment state to blame?

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Disappointing poverty trends: is the social investment state to blame? An exercise in soul-searching for policy-makers Frank Vandenbroucke University of Antwerp and KU Leuven Belgium Koen Vleminckx Federal Public Service Social Security Post-print-version paper submitted publication Journal European Policy; published in: JESP 2011 Vol 21 (5):450-471 DOI: 10 1177/0958928711418857 Summary Should we explain disappointing outcomes Open Method Co-ordination on Inclusion by methodological weaknesses or substantive contradictions ‘social investment’ paradigm? To clarify underlying concepts first revisit original ‘Lisbon inspiration’ subsequently relate it idea ‘new welfare state’ as proposed literature new risks post-industrial societies We then discuss two explanations trends suggested critical accounts state’: ‘resource competition’ a ‘re-commodification’ do not find these convincing per se conclude that jury still out However policy makers cannot ignore failure employment policies reduce proportion children working-age adults living jobless households EU they should deny reality ‘trilemma activation’ Finally identify conditions may facilitate complementarity inclusion Keywords: inequality Lisbon strategy protection 2 Introduction In March 2000 Council set strategic goal Union next decade Part parcel this objective was modernization model: ‘Investing people developing an active dynamic will be crucial both Europe’s place knowledge economy ensuring emergence does compound existing problems unemployment exclusion poverty’ Thus rhetoric referred quite clearly concept Aspirations were high conclusions spoke ‘the eradication within The Summit only promoted distinct focus attention co-operation; also laid foundations Europe-wide approach policy-making called ‘open co-ordination’ Fighting became one key ambitions process translated common objectives measuring rod specified agreed indicators (Atkinson et al 2002) Expectations ran after Now disappointment prevails Poverty has decreased (Social Protection Committee 2009) This sober assessment merits some among ‘believers’ back Have been naïve about potential open co-ordination even both? past ten years much scholarly work devoted methodology: whether proven effective matter research controversy (Heidenreich Zeitlin 2009; Armstrong 2010; Marlier 2010) Bea Cantillon focuses explanation rather than methodological: transition from old distributive more difficult expected at least part 3 responsible (Cantillon 2011) believe argument leading conclusion needs qualification Yet necessary refocus agenda contribution return initial inspiration dimension Agenda conceived because allows multiple interpretations: are one-sided other interpretations balanced ‘investment strategy’ (i e preventing materializing) ‘protection compensating have materialized) constitute twin complementary pillars second section argue analytically conflated with shift ‘old’ ‘new’ risks: true fact manageable through compensation prevention These conceptual clarifications important view understanding difficulties which points third formulate possible why 1 aptly described Jenson ‘quasi-concept’ (Jenson 2009: 41) Giddens’s chapter his book Third Way (Giddens 1998) often cited canonical reference strategies would come replace traditional Before repeatedly stressed – contra Giddens 4 substitute spending (Vandenbroucke 2002: x) our needed precisely did enhancing opportunities recipe fighting Since automatically lead less interrelated yet processes indicated: Employment Strategy ‘The New Welfare State’ written context Esping-Andersen argued: criticized its unduly selective appropriation [Nordic] democratic First tendency activation conventional income maintenance guarantees regarded optimism but worse counterproductive … [T]he minimization security precondition Second truly sustainable must biased towards preventative (Esping-Andersen 5) ‘preventative policy’ refers child challenges warning certainly holds education large: making vehicle equality opportunity inegalitarian society egalitarian So productive if virtuous circle can created whereby mutually reinforcing words indispensable For reason considered ‘active adequate umbrella term 5 But terminological battle us today highly relevant though Admittedly account personal one1 practice theory With hindsight clear received priority Target-setting unlike left Member States 2004 Kok (Kok 2004) report recommended overriding given growth change direction reflected Mid-term Review (Zeitlin Atkinson 2010: 14–15) many government warranted originally introduced copy paste extent believers variety adherents specific model states might seen Nordic where had traditionally lower Continental Southern Anglo-Saxon models Scandinavian either Portuguese presidency Ferrera Hemerijck Rhodes (2000) emphasized each there interesting examples successful adaptation Hence ‘hybridization’ ‘everybody becoming Scandinavian’ Nonetheless example succeeded combining low levels constituted source 6 three dimensions vast academic (Taylor-Gooby 2004; Armingeon Bonoli 2006; hallmark One distinguish architecture for: new-risk address risks) develop human capital passive cash transfers) service (welfare follow become service-oriented transfer-oriented) All linked changing nature challenge necessarily overlap Unemployment age ill health sickness disability financial burden raising increasingly catered since World War (2006: 5–7) defines follows: (i) reconciling family life; (ii) single parenthood; (iii) having frail relative; (iv) possessing obsolete skills; (v) insufficient coverage Overcoming skill deficits labour markets intrinsically i general training: respect risk’ ‘need coincide entirely Bonoli’s list 7 If considers them separately addressed systems transfers services little oriented benefits instance life pursued extensive parental leave generous investing childcare And reconciliation primarily based sector instrumental successfully socializing par excellence requiring quality alternatively no practical solution families their stay during working hours (Morgan imperative originate ground totally Moreover respond various another postulate priori governments focusing (i–ii) vice versa sure complex multifaceted History teaches problem pressure reform; comprehensive consistent reform responding all aspects hand Governments pursue goals others Or way inconsistent partially self-defeating Policies facilitating combination responsibility paid take once again ‘productive’ terms rates activating unemployed heterogeneous disparate 8 reorientation exemplified Scandinavia related deterministic Reconciling supporting long-term care (for leave) different Furthermore regard Looking closely prominent instruments market rightly asserts witness ‘varieties depending combine re-commodification (Bonoli when examine (supposed) results seem obvious stress impact unique inseparable sub-strategies (and well-defined instruments) never dissociated issue so pace very uneven far removed 2007; Nikolai Jensen 2007) It Our discussion Belgium’s Flemish Community Sweden (see Section below) illustrates importance observation Taylor-Gooby settlement Europe’ makes analogous starting broader perspective he describes search balancing economic justice directions 9 elements strategy: most countries mobility-enhancing distinctive parts effectively 2008) lack space criticism issues discussed below (notably ‘re-commodification explanation’) taken board full demerits paradigm Why trends? number States? Given historical experience relatively Cantillon’s hypothesis sight puzzling According Huber Stephens (2006) incorporated essential decades: already built up reduction programmes risk groups 1980 average national remain stable non-Scandinavian prompted emulate example? As population analysis start hardly despite rising actual implementation higher person ‘paradox additional upward poverty: They mechanisms reinforce adverse consequences stand-still associated intrinsic go resource competition greatest relevance postulates tight budgetary constraints 1990s 2000s moved resources away (social healthcare) redistributive (childcare elderly systems) discourse justification emphasis ‘making pay’ justified thus contributed retrenchment benefit (in nearly included); generated Put forceful fundamentally implied individual citizens’ rapport detrimental effect vulnerable Both ‘downside’ investment/new ‘upside’ creation jobs supposed lift Whether such enhances balance crucially depends type work-poor work-rich individuals who mostly belong (defined here 11 job2) those increase headcount improve (De Beer worst-case scenario increases relative threshold median household risk-programmes mainly cut Assessing prompts questions redistributive? witnessed significant programmes? reader object answer question negative rendered futile case Is Intuitively seems plausible Some typically enhance choice access jobs; obviously reduces value people’s own decision make use contrary distributed citizens entitled limitations hold compulsory real qualifications young acquire socio-economic cultural background 12 successive OECD PISA studies illustrated so-called Matthew effects cherished ‘Matthew effect’ phenomenon widely observed across advanced middle classes tend main beneficiaries moot Castles argues cross-national differences nations large degree function catering (Castles 2008; Goudswaard Caminada bivariate ex post assessing effectiveness versus primary distribution raises considerable inherent endogeneity between incomes argued Myles: ‘To really estimate redistribution need invent counter-factual ‘virgin’ unaffected altogether Myles 641) ‘all told generally albeit transfers’ (p 654) refer factors: aggregate size public expenditures according receiving (Marical judgement total vis-à-vis efficiency Relative euro spent assess look over categories 13 developed Ghysels Van Lancker (Ghysels policy; study budgets taking into parents’ contributions Referring (2011) bound generate stratification women’s roles employed (such flow double-income better educational backgrounds earnings capacity data provided (2010) allow somewhat reading formal Countries highest provision (Denmark Sweden) equal while lowest skewed high-skilled mother against skilled Denmark Norway female weak non-existent largely fulfilled show bulk Flanders allocated exact opposite quintiles twice subsidies addition consider gap low-skilled women 25–64 bracket: EU-15 36 percentage points; 44 compared 27 28 14 guaranteed places rate explains contrasting impacts suggests ultimately quasi-universal combined levels) beat persistence determination Belgian situated area adopted deliberate resolving adequately dependency atypical employment-contracts) Compared programmes’ see Table barely responsive ineffective skills achieve Marx van Vliet inconsistency blame relation difficulty foremost perseverance consistency notably linking That forces envisage fundamental and/or tax reforms constitutes identifiable political Returning 15 point made De (2007) (2009) reaches creates requires clever targeting impossible When comes confronted deep-rooted socio-cultural comparison harder translate any ready-made input system earlier formulating schematically driver vicious operates reproduce larger Within EU-27 remarkable illustrate divergent ‘reproductive’ Figure summarizes 2009 concerning students’ performance (OECD 2010a) heterogeneity students (by means difference 95th 5th percentile ESCS OECD’s Index Economic Cultural Status student’s family) (as measured variance student explained ESCS) appears four above statistically (Germany Hungary Luxembourg) (Finland 16 Italy) Finland ‘egalitarian functions’ (note superior added mean score brackets) 1: Background (PISA Austria (470)Belgium(506)Czech Rep (478)Denmark (495)Finland(536)France (496)Germany(497)Greece (483)Hungary(494)Ireland (496)Italy(486)Luxembourg(472)Netherlands (508)Norway(503)Poland (500)Portugal (489)Slovak (477)Slovenia (483)Spain (481)Sweden (497)UK (494)OECD Average (493)491419242 202 402 602 803 003 203 403 603 80% ( reading) ESCSSocial (difference percentile)Impact averageBackground averageImpact underscored Mean brackets Source: inequality-reproducing features 17 contribute greater advance evaluation how evolved time A shed light decline notable (except Italy Portugal further increased Perhaps interestingly observe able variability learning easily disentangle contextual changes matters appear Germany Poland diminishing hence improved equity same contrasted variation 2010b; 2011; forthcoming) overall coherence ‘capacitating quality’ Although confront deeply entrenched realities hard overcome scientist’s circumspection 18 overtake maker’s voluntarism Sabel 2010 placed perspective) Has period marked downward prima facie place? analyse information Expenditure database 1985–2007 US selected basis availability comparability data: five (Belgium France Luxembourg Netherlands) (Greece Spain) UK On detailed country constructed (‘old 1’) retirement survivor pensions 2’) except 3’) ‘old risks’ (‘new pre-primary (new 4’) finally secondary 5’) compares GDP 2005–7 1985–9 (rows A–H) Contextual added: L–M) 19 driven demographic (or reflect effort invest ‘budgetary effort’ calculated following ratios: • divided older 64 capita; younger ALMP capita row N–Q compare ratios (1985–9=100) indices read country’s willingness disinvest) functions note effort: imply development 20 3’ C) significantly Exceptions particular (though declining generosity undoubtedly story non-retirees under ‘competing claims’ competing claims originated predominantly increasing healthcare (with Netherlands Finland) (which too (row J ‘New 1–5’ 1) dominated Comparison I (the sum pensions) reveals however wrong say crowded category Leaving health: marginally Source periods allowing immediately preceding found A1 Appendix article Closer inspection evolutions sudden (but Koster EMU patterns) 22 Obviously N–Q) tell share demography pension catching spectacularly spectacular Greece Spain AMLP picture mixed diminished (most level observation) Nevertheless fair came spending) figures corroborate (2008) shows affects independently regime Technological consumerism ageing attach healthy well facing future (Hall Jones Murphy Topel 2006) retrenchment? assumption case: assured proper design He contrasts 23 people: lowering reservation wage (an option sociologists qualify ‘re-commodification’) reducing cost job (we latter achieved mobilizing resources) Complementarity assumed Over decades diverse United Kingdom conditional duration replacement (Scruggs 4; 2008 5; started before accepted Minimum wages 1990 (Van Mechelen therefore inevitable downside pessimistic imposes itself principle want types policies: improving essentially incentives move novelty current lies simultaneous application approaches By forcing fail grasp what ’ ‘much toolbox classified [these] binary classifications’ (pp 56–7) further: ‘Most tools 24 characterized peculiar mix principles policy: status) protection; (re)-commodification’ 58) conceptualizes continuum emphasizing (employment early benefits) extreme (retrenchment workfare deregulation) clearest investment-oriented refined instruments: ‘negative’ benefits; ‘positive’ net particularly bottom end distribution; ‘administrative’ offers training counselling strict follow-up individual’s accept offer sanctions follows ‘close monitoring’ ‘Making fixed formulated documents explicit positive Increasing entails short run scarce trade-off measures close monitoring Monitoring 25 easy undertaking Such intrusive: continuous interference daily lives frequently repeated personalized assessments ‘willingness truth dilemma How pay without scarce? readiness monitor trajectories strictly continuously impose administrative applied moderately predominant instrument Whichever struck inevitably aforementioned trilemma situation simultaneously entail wish pursue: poor; excessively intrusive cumbersome; order cuts realm denied thereby times austerity balanced) long structural reduced available invested 26 low-paid promise promoters deal link Atkinson’s analysis: mobilize mitigated targeted Conclusion: stability signals reinforced failure? Policy-makers seriously debate indictment allegations shifted allegation unconvincing substantial lay refuted old-age component pressures field segment outcome decrease preconditions Otherwise turn intergenerational circles disadvantage emancipation egalitarian: exacerbate inequalities genuinely empowering ambition creating presupposes sufficiently ambitious stresses Where potentially (growth inclusion) unified 4) mentioned childcare: reforming play role corroborated ones: organization workplace ‘life-long learning’ (Lundvall Lorenz Reforming Intelligent Kenworthy thoughtfully convincingly (Kenworthy Labour politically hurdle Fourth although ‘crowded out’ last cheap savings Simultaneously implementing fully-fledged require erosion base wake crisis 2008–2010 dangerous threat Believers convince opinion discipline destroy perspective: revenues necessity destroying (Liddle contained retain leeway youth: longer markets) 29 Fifth scarcity paramount selectivity areas convinced spending’ blind prone generating sub-question discussing hypothesis’ subject systematic testing’ adjustments methodology launched known (OMC) Many shortcomings OMC listed weakness bite now 2020 introducing Europeans million headline targets (Council Conclusions June Commission communication ‘European Platform Poverty’ unclear undecided fight success lost purpose ending quantitative insight thematic substance Presidency Frazer proposals governance concludes ‘feeding in’ expectation 30 interact Growth Jobs disappointingly corresponds condition Indeed frustration unable drive home message ambiguous allowed inclusive prevented regional partners buying bits pieces gestalt fortiori pushed better; continue friend enemy friendship well-conceived flourish community try Acknowledgements grateful Dirk Vandamme Olaf team Kim Lievens Lane Gøsta Anton Bruno Palier Jonathan Roger Liddle Kathleen Brempt Stijn Billet Antonia Carparelli W Klerck anonymous referee participants seminar organized Herman Deleeck Centre Policy helpful comments 31 References K G (eds) Politics Post-Industrial Adapting Post-war Risks London York: Routledge Governing Inclusion: Europeanization Coordination Oxford: Oxford Press B EU: Decade Macerata Lectures May Macerata: Universita degli Studi di E Nolan (2002) Indicators politics policies’ Boloni States: 3–26 ) ‘Postindustrialization State Adaptation Advanced Industrial Democracies’ Comparative Political Studies 40 (5): 495–520 ‘Varieties Investment Market Policy’ N Morel Palme What Future Investment? 55–66) Stockholm: Institute Futures Research Report O Patterns There Convergence? Onderzoeksmemorandum 06 Leiden: Universiteit Leiden paradox state: era’ 32 F ‘What Do: Disaggregated Approach’ 38 (1): 45–62 P ‘Why Work Not Panacea: Decomposition Analysis Countries’ (4): 375–88 ‘Economic Inequality Salverda T M Smeeding Handbook 639–64) Gallie D Need Europe: Recasting Economy Oeiras: Celta Editora H Nicaise Roadmap Europe Antwerpen/Apeldoorn: Garant Unequal Benefits Family Activation: Distribution Families Young Children’ Centrum voor Sociaal Beleid (CSB) Working Paper (available http://webhost ua ac be/csb) (1998) Way: Renewal Democracy Cambridge: Polity Redistributive Effect Private Programs: Cross-country Empirical Analysis’ International 63 1): 1–19 Hall R C Value Life Rise Health Spending’ Quarterly Economics 112: 39–72 33 Heidenreich Changing Regimes: Influence National Reforms London: ‘Combating 143–68) ‘Worlds Services Transfers’ (2): 151–62 ‘Redesigning Citizenship Regimes Neoliberalism: Moving Towards Investment’ 27–44) L Equality ‘Social Crisis: Choices Britain Implications Union’ 165–76) Lundvall ‘On Role Learning Economy: Perspective’ 79–98) 34 Marical Mira d’Ercole Vaalavuo Verbist ‘Publicly Provided Households’ Resources’ (1) Natali Dam 2020: More EU? Brussels: Peter Lang SA ‘Belgium: Quest Sustainability Legitimacy Out “Welfare Without Work”’ Schubert S Hegelich U Bazant Systems Moreira Activation Dilemma: Fairness Effectiveness Income Schemes Bristol: Morgan ‘Child Care Model: Conditions Reform’ 45–54) Longevity’ 114: 871–904 ‘Towards World’ 99–115) Organisation Co-operation Development (OECD) (2010a) Results: Background: Equity Opportunities Outcomes (Volume 2) Paris: 35 (2010b) Trends: Changes Student Performance Focus N°2: Improving performance: Leading Bottom (forthcoming) Strong Performers Successful Reformers Education: Lessons Saxenian Miettinen Kristensen Hautamäki ‘Individualized Provision State: Special Education Finland’ Prepared Sitra Helsinki Scruggs Rights Inequality’ Anderson Baramendi Representation Russell Sage Foundation Progress Contribution Evaluation Dimension DG Affairs Equal (ed (2004) Welfare: Transformation Settlement Societies 3–24 ‘Foreword’ viii–xxiv) Strategische keuzes het sociale beleid ‘Who Benefits? Childcare Flanders’ ‘Money’s Even Tighter Mention: Decline 8th ESPAnet conference Global Consequences Responses’ Budapest 2–4 September ‘Divergence Convergence: Policies’ Integration (3 May): 269–90 Ferry ‘Europeanisation Active Politics12 (2) Stronger Governance Architecture Coordination’ 253–73) Notes Minster 1999–2003 During half 2001 presided Ministers conform Beer’s define expression ‘work-rich’ (2011 issue) ‘job-rich households’ work-intensity EUROSTAT equals providing ‘dilemma minimum schemes right exception recipients’ freedom choose activities besides employment) falsify sketch moreover generalize limited cases TABLES 37 expenditure variables Statistics Detailed Data (Database) currency millions covering Different aggregated: ‘Old 1’: 2’: ‘retirement pensions’ age’ (including ‘early retirement’) ‘survivor’ (cash) 3’: ‘other incapacity-related excluding 2’ housing ‘parental leave’ maternity ‘elderly Care’ residential home-help ‘childcare’ day-care 4’: administration job-rotation job-sharing supported rehabilitation direct 5’: include OECD: ‘housing’ ‘family in-kind’ ‘capacity sources used: GDP: Expenditure: Reference series Database (Expenditure Nature Resource) Population Data: (Historical Data) (15–64): Factbook civilian force: Force (1000s): Annual Survey (ALFS Tables) 4’ (ALMP) estimations (1985) (1985–9) 5’ (Primary Secondary Education) (1985–93) (1985–94) (1985–93; 1997–8) (1991–3; 1997–2000) (1985–6; 1992–3) authors: Row A–K: (average period) L–M: N: (old aged >64 GDP/capita O: 3) <5 P: Q: 5–19 39 Spending « » 1985–1989 1990–1994 1995–1999 2000–2004 2005–2007 BELGIUM 1’ Healthcare 76 49 92 Retirement Pensions 50 00 93 Other 91 46 82 98 Parental Leave 0 07 Elderly 01 Child-care 45 96 09 Prim & Sec 51 57 08 Total 90 75 ‘Old’ ‘New’ 69 79 Rate 52 86 55 70 60 02 61 71 56 05 (‘Old / 65+)/(GDP/CAP) 65 62 53 (‘New <5)/(GDP/CAP) 4’/ UN)/(GDP/CAP) Q 5’/ 5–19)/(GDP/CAP) DENMARK 99 78 58 74 88 77 97 41 54 95 87 84 (*) 66 47 04 59 72 81 73 80 68 Estimations FINLAND 43 67 89 FRANCE 94 Educ 48 42 GERMANY 83 GREECE 85 ITALY 03 LUXEMBOURG NETHERLANDS PORTUGAL SPAIN SWEDEN