Wednesday, June 26, 2013
5.60 (PC Hoofthuis)
The fiscal perspective to the study of welfare state development is based on two interlocking arguments: First, social insurance systems financed by contributions can be employed by state actors to advance the fiscal interests of the state; and second, the design and management of these systems for fiscal purposes can have substantial ramifications for welfare state development. In this paper I apply this framework to the study of the rapid welfare state growth experienced in Israel between the years 1970-1976. The first part of the paper explores the decision making process that led to a steep rise in contribution levels in April 1970. The research shows that the rise in contribution was not the outcome of an expansive governmental social policy agenda, as hitherto assumed, but was rather motivated by the need to find new revenues to finance the rising security costs and was driven by proactive economists in the treasury department. The second part of the paper explores the repercussions of this financing reform for social policy. Here the findings show that while the increase in contribution levels was driven by reasons over and above considerations related to welfare, it was followed by a substantial expansion of the social insurance system. Seeking to legitimize the increased contribution levels, the government offered new social entitlements, which were then further expanded, as various members of Knesset conditioned their parliamentary support on further social concessions from the government.
