The Welfare State as Crisis Manager? Comparing Social Policy Responses to Three Major Economic Crises
25 Pages Posted: 19 Jul 2010 Last revised: 12 Sep 2010
Date Written: 2010
Abstract
This paper aims to describe and explain different welfare state responses to three major economic crises: the Oil Shocks of the 1970s, the worldwide recession of the 1990s and the current Financial Crisis. Policy developments in three small open economies – Sweden, the Netherlands and Australia – are compared in order to show why the welfare state is sometimes actively used as a crisis manager in the aftermath of a crisis while, at other times, it is mainly seen as a fiscal burden. We develop a typology of policy responses to crisis and assess three working hypotheses. Through process tracing and systematic comparison we find, first; that political parties shape crisis responses (albeit mediated by political institutions); second, that the size of the existing welfare state affects policy responses and, third, that crises do not lead to policy innovation in a way that could be expected against the background of the historical institutionalist and ideational literature on policy change.
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