Radical Welfare State Retrenchment: A Comparative Analysis.

AuthorStephens, Robert
PositionBook review


The 1980s and 1990s saw "political decisions to reduce the level of social protection guaranteed by the state" in many OECD countries. In his book Radical Welfare State Retrenchment: A Comparative Analysis, Peter Starke, from the University of Bremen, Germany, uses New Zealand as his major case study of welfare retrenchment, and compares the level, form and causes of retrenchment in New Zealand with Germany, the United Kingdom (UK) and Sweden. He uses New Zealand as his base because the 1991 benefit cuts and "Mother of All Budgets" were "perhaps the most dramatic example of welfare state retrenchment not just in New Zealand but the OECD as a whole".

The book is not just an excellent description of the New Zealand social security system along with a history of its development and changes post World War II, but is set within an international socio-economic/political framework in order to investigate how and why retrenchment occurred. The overall conclusion is that the welfare state has shifted from its heyday in the 1950s/1960s based on rights and entitlements, to one based on need and fiscal cost savings. The welfare state is on the defensive, and has been damaged, but is not obsolete or dismantled.

In the author's view, New Zealand probably "tested the limits" of how far a democracy can go in this "dark art of downsizing". But the combination (to use local vernacular) of Ruthanasia and Rogernomics, at significant variation to electorate expectations and wishes, resulted in a change from FPP to MMP to curb the excessive powers of majoritarian government. The subsequent shift to a far more benign regime based on social investment and social development (similar to Sweden and the UK after Tony Blair) demonstrates the political resilience of the welfare state.

Chapter 2 looks at the theories and measurement of retrenchment. Measurement of welfare state retrenchment is more than just the size of welfare effort as measured by the proportion of GDP spent on social security. It covers reductions in benefit levels and thus replacement rates, the tightening of eligibility criteria, the coverage and duration of benefit receipt, and the number of people affected. These changes all come from deliberate political decisions.

Most of the political theories of the welfare state try to explain its expansion, but Starke shows that, post-1980, changes...

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