A welfare state is a socio-economic system in which the state takes responsibility for a large part of the economic and social welfare of its population. The mechanisms used to achieve this include progressive taxation, unemployment or sickness benefits, and social services. All Western European countries are welfare states, though they seek to promote the welfare of their citizens in different ways. In Western Europe there are at least three distinct welfare regimes which differ according to the scope and type of welfare provision they offer.
The social-democratic welfare state (e.g. Sweden, Denmark, Finland) aims to achieve social equality. It produces a high level of universal welfare benefits and services, funded through general taxation. The corporatist, or conservative, welfare state (e.g. Germany, Belgium, France) aims to promote social stability. It offers replacement benefits funded by social insurance schemes to which employers and employees contribute and which the social partners manage. The level of provision is linked to contributions to maintain social status, and social services are provided by the family. Liberal welfare states (e.g. the USA and, to some extent, the United Kingdom) seek to promote market efficiency by offering minimal, often means-tested, welfare benefits and services, funded through taxation.
The imperative of competition in the era of globalization led to predictions that Western European welfare states would retrench to the minimal standards of the liberal welfare state. Similarly, concerns have been raised that the market-building exercise of the Single European Market programme was neglecting the social side of European integration. Also, member states of the European Union (EU) cut welfare budgets in order to meet the convergence criteria set for Economic and Monetary Union (EMU). Support for welfare states in Western Europe remains strong and there is little evidence of retrenchment. Government spending is about 45% of gross domestic product in Europe (compared with 30% in the USA), and around two-thirds of this is on welfare. For political and institutional reasons governments have found it difficult to retrench social provision. There is still overwhelming support for welfare states among electorates, and it has been easier to reform welfare states in majoritarian political systems, and in countries where welfare funds are managed by the state rather than social partners.
While the EU has not developed into a comprehensive European-level welfare state, there is an emerging social model which is founded on the consensus that spending on social welfare promotes social cohesion and hence contributes to economic growth. For this reason social policy should correct poverty and social exclusion. The emerging European social model is work-centred. It is premised on the idea that European economies should promote high rates of economic activity and reduce rates of unemployment, and that social legislation should protect the status and rights of workers. The EU is promoting these goals directly through social legislation and the decisions of the European Court of Justice; and indirectly through EMU and the benchmarking procedures of the Luxembourg Process and the Lisbon Strategy.
By encouraging high levels of economic activity for all citizens, welfare states in the EU are transforming rather than retrenching. One theory characterizes the emerging welfare state as an ‘adult worker model’ in which all citizens—male and female—are expected to work. This transformation particularly affects women in many conservative and liberal welfare states who traditionally relied on a male breadwinner for their social rights. It demands of welfare states that they adjust their welfare institutions and provisions to support women in the workplace. As a consequence, welfare policy in recent years has become increasingly family- and child-focused.
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