The four global worlds of welfare capitalism: institutional, neoliberal, populist and residual welfare state regimes

Abstract

What welfare state regimes are observed when the analysis is extended globally, empirically and theoretically? We introduce a novel perspective into the 'welfare state regimes analyzes' - a perspective that brings developed and developing countries together and, as such, broadens the geographical, empirical and theoretical scope of the 'welfare modelling business'. The expanding welfare regimes literature has suffered from several drawbacks: (i) it is radically slanted towards organisation for economic co-operation and development (OECD) countries, (ii) the literature on non-OECD countries does not use genuine welfare policy variables and (iii) social assistance and healthcare programmes are not utilized as components of welfare state effort and generosity. To overcome these limitations, we employ advanced data reduction methods, exploit an original dataset that we assembled from several international and domestic sources covering 52 emerging markets and OECD countries and present a welfare state regime structure as of the mid-2010s. Our analysis is based on genuine welfare policy variables that are theorized to capture welfare generosity and welfare efforts across five major policy domains: old-age pensions, sickness cash benefits, unemployment insurance, social assistance and healthcare. The sample of OECD countries and emerging market economies form four distinct welfare state regime clusters: institutional, neoliberal, populist and residual. We unveil the composition and performance of welfare state components in each welfare state regime family and develop politics-based working hypotheses about the formation of these regimes. Institutional welfare state regimes perform high in social security, healthcare and social assistance, while populist regimes perform moderately in social assistance and healthcare and moderate-to-high in social security. The neoliberal regime performs moderately in social assistance and healthcare, and it performs low in social security, and the residual regime performs low in all components. We then hypothesize that the relative political strengths of formal and informal working classes are key factors that shaped these welfare state regime typologies.