Abstract
The rise in neoliberal reforms of welfare state policies since the 1970s has sparked many a research project. Through various theoretical lenses, scholars have attempted to explain this shift in how governments and political parties shape and manage the various redistributive policies at their disposal. In her book Making Markets in the Welfare State, Jane Gingrich engages these earlier attempts and provides us with a more complete story of the politics surrounding the welfare reforms. With a theoretical focus on the (many different) markets that compose social policy, she develops a compelling theoretical framework in which the economic underpinnings of the policies and the strategic behavior of political parties in government are elegantly intertwined.
Instead of revisiting the existing question of “why markets emerged” in welfare policies, she asks “why policymakers chose particular types of market” (p. 4). After establishing that the markets for social services vary systematically across nations/areas of coverage/relevant constituencies, she argues that parties in government can capitalize on this variation in creating a political strategy for reform. Gingrich attempts to sidestep the normative arguments for or against marketization by showing how politicians, regardless of ideological bent, use markets when reforming policies. The issue that remains is what kind of markets they choose to implement. Through the use of clear examples from her cases—the Netherlands, Sweden, and the United Kingdom—she persuasively demonstrates how parties strategically alter the relationships among the state, users, and producers. The typology of markets shown in Table 1.1 clearly illustrates the possibilities for market reform (p. 12), and by combining these types with party ideology in Table 2.1, Gingrich creates predictions for policy reform depending on the type of policy (residual vs. universal; p. 43). Although there are many components to the theoretical argument—type of service, party ideology, types of markets, and so on—her argument culminates in a generalizable theory of welfare market reform.
Gingrich’s explanation of how partisan ideology shapes social services transcends the common perception of how ideology influences public policy. We are accustomed to understanding the ideology–policy link as follows: Left-wing parties support redistribution because it coincides with their ideological grounding, as well as their electoral supporters, whereas right-leaning parties wish to diminish social services for both ideological and electoral purposes. Instead, Gingrich argues that parties make redistributive choices that coincide with their broader aims, and within those boundaries they also attempt to gain electoral favor. Since parties first and foremost are concerned with their vision of the role of the state, this ultimately shapes their choices of different market-driven reforms. She makes a convincing case that both sides of the ideological divide may find market-driven reforms promising. However, under the same circumstances, they would choose different reforms to achieve their varying goals. Because Gingrich neither is concerned with welfare “retrenchment” nor assumes that only right-wing parties will turn to market reforms, she is better able to argue how ideology can significantly affect welfare reform.
Although Gingrich has a fairly large number of moving parts in her theoretical framework, with the policy components, market types, and partisan ideologies, she does a fine job of keeping the discussion squarely on her argument that markets within social services are politicized by political parties to fulfill their ideological and electoral goals. Making Markets in the Welfare State is a significant theoretical advancement for both the comparative welfare state literature and the broader political economy literature. By moving beyond simple interpretations of marketization, partisan preferences, and service structure, Gingrich has given us a more nuanced picture of partisan behavior that has at its core an argument about costs and benefits. Political parties alter markets on services in ways that either benefit their core supporters or harm them less than their opponents’ supporters. In addition, their choice of policies to reform also reflects these calculations. For example, left-wing parties can reform universal policies to allow more choice for users because this benefits both low- and middle-class recipients, but right-leaning parties would find this approach unpalatable.
Although Gingrich sets up the argument with a look back at welfare politics in the mid-1900s and a discussion of how the economic and political contexts shifted in the 1970s and 1980s, there remains a question about timing. Was this a perfect storm that created an environment in which both left- and right-wing parties turned to market forces for welfare reform? In other words, when would we expect to see these types of market reforms on both sides of the ideological aisle? Theories are not required to explain every incidence, but a discussion of how the timing and nature of other major global forces affected these relationships could help future researchers to build on these ideas.
The argument focuses on the various types of market reforms and when parties will use them, but I did wonder if we can use this argument to explain when parties do not use market tactics to reform social services. The impetus for this question comes from the discussion about the timing of these market reforms—how left-leaning parties were more likely at the end of the 20th century and beginning of the 21st century than previously to use market options when reforming. Gingrich rightly mentions that using markets is not the only option open to parties when reforming services, and although this starts down a slightly different path than her original question, can we then build on her argument to theorize when these reforms will be used versus those other options?
As a theoretical read, Gingrich’s work brings together ideas from a broad set of literatures to create a unique argument based on economic markets, partisan preferences, and policy structures. She investigates her predictions through in-depth case studies of three policy areas (health care, education, and elderly care) in three European countries (the Netherlands, Sweden, and the United Kingdom). While presenting her theoretical argument, she relies on these cases for her examples and illustrations, and then she presents a substantive chapter for each policy area, showing how the right and left parties in each country rely on different market mechanisms when reforming the policy. The amount of information from secondary sources and interviews makes this book well documented and the examples interesting. However, the empirical angle of the book, although interesting, is not as convincing as the theoretical part. Although Gingrich does not claim in this book to be rigorously “testing” her argument (and there are no stated hypotheses), there were unanswered questions about the generalizability of the conclusions based on the empirical details. Do these three country cases offer enough variation on the public–private mix in welfare states? In the conclusion, Gingrich offers a quick overview of health care reform by the right and the left in a variety of countries beyond her original three cases. Although this helps to alleviate some concerns over the generalizability of her argument, we look forward to a more rigorous analysis of these countries, and other policy areas, in the future.
This book should appeal to a number of audiences, a few not obvious from just a glance at the title. Comparative welfare scholars and researchers of marketization and policy will find much to dig into throughout the book, but more interesting, there are aspects of this book that researchers of public administration may wish to peruse. Gingrich’s discussion of the intricacies of marketization—that is, producers, managers, and the state—at times touches on the power of the bureaucracy in these reforms. In a similar way, her treatment of political parties’ preferences and electoral connections offers tidbits to (and takes bits from) the comparative institutional literature’s interest in partisan competition. In all, this book melds together many theoretical ideas, and as such those literatures will each find something of interest here.