Between Equity and Flexibility?: Understanding Divergences in the Territorial Organizations of Active Welfare States

With the shift from passive to active labor market policies, many OECD countries struggle with an institutional paradox-- how to achieve sufficient subnational flexibility to bring labor market policies closer to local and individual circumstances, while also centrally regulating subnational systems to avoid fragmentation and promote equity across the territory. How do countries solve this dilemma? By focusing on the architectures of active welfare states in Italy, Germany, Spain, the UK and the US, this paper shows how these countries have changed their state structures to tackle this dilemma. While they have adopted reforms to increase subnational flexibility, they have followed divergent re-configuration trends as: 1) the nature of flexibility varies across countries, and 2) central levels intervene in different manners in these scenarios.

This paper has two main objectives. First, it identifies and captures three models of active welfare state, namely extensive decentralization, decentralization within centralization, and centralization within flexibility. Second, it presents a framework to explain cross-national variances in the nature and extent of these reforms. By paying attention to Court rulings, legal processes and political discussions, as well as interviews conducted in these countries, I identify the “notion of protecting equal welfare rights and obligations across the territory” as an important variable to understand why some countries decide to promote equality through centralized intervention, while others favor subnational flexibility. 

By highlighting the territorial dimension of welfare states, this paper (which summarizes the findings of a book project) sheds light on the relationships between contemporary welfare policy changes and transformations of state and governance structures. In this way, it contributes to the literatures on comparative welfare changes, the bodies of work on the distribution of authorities (e.g., comparative federalism, devolution, decentralization, delegation), as well as the field of new public management.