Redistribution within One Class: The Evolution of Spending and Taxation in the ‘Trente Glorieuses’

The paradox of ‘redistribution in one class’, that the most generous and redistributive welfare states are also those which penalise the poor most heavily via taxation, is emerging as one of the most stubborn puzzles in comparative political economy. In this paper I document the evolution of the relationship between spending generosity and tax progressivity to adjudicate existing explanations with quite different implications for its timing using quantitative data from western European democracies from 1945 to 1975. Contra Kato (2004) and Ganghof (2006), neither a straightforward sequence from tax structure to the welfare state, nor its opposite seem to hold. Rather, detailed historical comparisons of the co-evolution of the tax and the spending structures in the UK, France, Sweden and Denmark indicate that individual ministerial influence over specific policy areas can explain the divergence of the different ‘sides’ of the government budget in those contexts where the ministers’ preferences diverge.