between 1980 and 1998, the average growth of social expenditures
went down compared to the previous two decades, but it did not
become negative. In other words, welfare states continued to expand,
albeit at a slower pace.^49 One of the factors behind this continued
expansion of social programs was the steady rise of market inequality,
which meant that states had to intervene more to obtain the same
distributive results.^50
This does not imply that nothing changed. First, in some countries,
such as the United Kingdom and New Zealand, there were significant
retrenchment efforts that truly reduced social protection.^51 Second,
many programs were modified in a neoliberal perspective. While not
affecting aggregate levels of spending, these modifications altered
important features of the welfare state and probably opened the way
for further reforms in the future.
In health care, most countries made efforts to contain costs in the
1980s and 1990s, and they also reduced the public share in total
health expenditures (by increasing the role of private insurances or the
proportion of co-payments, for instance).^52 With respect to public
pensions, admittedly the most difficult programs to modify, govern-
ments generally implemented reforms meant to reduce generosity and
contain costs. A common trend was also to move gradually from pay-
as-you-go to funding systems, the latter being more sustainable in the
long run, but also less redistributive, at least in principle, and more
consistent with a market logic.^53
Economic Strategies in the World Economy, Cambridge University Press, 1998,
pp. 192–94; John A. Ferejohn, “Changes in Welfare Policy in the 1980s,” in49 Alesina and Carliner (eds.),Politics and Economics in the Eighties, pp. 138–39.
Francis G. Castles,The Future of the Welfare State: Crisis Myths and Crisis
50 Realities, Oxford University Press, 2004, p. 45.
Lane Kenworthy and Jonas Pontusson, “Rising Inequality and the Politics of
Redistribution in Affluent Countries,”Perspectives on Politics, vol. 3, no. 3,
51 September 2005, 449–71, p. 450.
Evelyne Huber and John D. Stephens,Development and Crisis of the Welfare
State: Parties and Policies in Global Markets, University of Chicago Press,
2001, pp. 300–01; Jonas Pontusson,Inequality and Prosperity: Social Europe
52 vs. Liberal America, Ithaca, Cornell University Press, 2005, p. 202.
Pontusson,Inequality and Prosperity, pp. 187–88; Jacob S. Hacker,
“Dismantling the Health Care State? Political Institutions, Public Policies, and
the Comparative Politics of Health Reform,”British Journal of Political
Science, vol. 34, no. 4, October 2004, 693–724, pp. 699–700.
(^53) Giuliano Bonoli,The Politics of Pension Reform: Institutions and Policy
Change in Western Europe, Cambridge University Press, 2000, pp. 23–24.
150 Left and Right in Global Politics