Four kinds of welfare regimes and the their implications for transition in Eastern and Central Europe

1. Four kinds of welfare regimes and the their implications for transition in Eastern and Central Europe Professor Dr. Claire Wallace Institut f�r H�here Studien, Wien

2. Introduction All industrialised countries have developed welfare regimes to deal with risks to the population in terms of old age, invalidity, health, education, sickness, child care, unemployment and poverty. In Europe these regimes were developed from the late 19th Century and took different forms depending upon the history and social structure of the country. In all countries different interest groups, including labour unions, employers and political parties were involved. In recent years there has been more convergence between the different regime types in response to economic pressures of globalisation I shall outline the four regime types that are mainly found in Western Europe and go on to look at some of the evolving regimes in Easern and Central Europe

3. Differences between regimes types We can distinguish regime types according to: role of state role of family role of NGOs Role of private sector Role of insurance Coverage of poor population Level and duration of cover Active employment policies

4. 1. Liberal-Minimal welfare regime The welfare state is a social safety net only for those who cannot care for themselves. It is a source of shame and stigma to resort to the welfare state and benefits are means tested to ensure that only �deserving� people get them. Family is supported through tax system rather than welfare system (except for the very poor or socially disadvantaged) NGOs are quite separate and alternative to the state. Often form of charity, for example for the elderly or children in need. Staffed by volunteers but also become a big industry in their own right. Special tax status. Private sector is extensive and it is the duty of the individual mainly to provide for themselves using the private sector or occupational schemes (or family members to provide for their famiies. Insurance only for those who are working and tend to form part of the state budget. Payments are very low and not sustainable unless supplemented by private means. Large poor populations and unequal societie. Low welfare expenditure, low taxatio, targeted welfare, means tested Low wages adn weak job protection, so much insecure employment and many working poor.

5. Employment-centred, Conservative In these countries access to welfare is through entitlement by working. However, traditionally it was the man who worked, whilst women and children were dependents. Fewer women work in this regime than elsewhere and if they work tend to do so part time. Family entitlement to welfare system rather than individual. Heavily dependent upon the idea of insurance which is organised according to independent (but public) insurance funds. State regulates the role of the funds, insurance, role of family quite extensively, but services mainly decentralised, often through NGOs such as red cross, church Not much private insurance for welfare issues Very little private sector. Integrated with state sector. People who have worked entitled to rather generious unemployment benefits and pensions etc. Those who have not worked enttiled only to social assistance and this is not generous. Creates divisions beween insiders and outsiders. Employment and training policies important because employment is the basis for entitelment.

6. Universalistic/Social Democratic welfare regimes Associated with the Nordic countries. People entitled to welfare on a citizenship basis, but with strong emphasis on working in order to contribute to the welfare system. Welfare administered on individual basis, regardless of insurance. Both men and women mainly working full time. Very high rates of employment and extensive de-commodification of welfare. Very generous welfare provision and support for women with children. Family functions supported or taken over by the state. Very high rates of taxation. Idea of social solidarity to bring up living standards of poor/women/ethnic minorities etc.

7. Sub-institutional model Mainly in southern Europe, the welfare state is not so well developed and does not cover large parts of the population at all. Certain groups of people (civil servants etc.) covered, but many are not, so the family is the main source of welfare. Women usually do not work. Birth rates dropping dramatically everywhere except Portugal. Private welfare is resort for those not part of the state system. High unemployment. Social insurance only for some groups, not comprehensive. High numbers of self-employed, black economy Weak civil society due to legacy of authoritarian regimes but strong role of Churches. Incomplete welfare coverage of population

8. Soviet/Communist system (past) Universalistic and employment based because all were obliged to work. No unemployment but very low wages and high state provision of welfare. All welfare paid from state budget, but due to under-funding of the system, families solidarity was strong in providing supplementary support. Extensive support for women and families. Generally comprehensive but poor quality services focused on numerical output and not on quality of service or needs of clients. Consumer price subsidies important part of the welfare package Indiviual wages and entitlements, but in practice had to live in family units due to low level of wages. Provision of services heavily focused on enterprises. which provided goods and services directly. No correpondence between age of pension and age of finiishing work. Little difference between minimum wage and average wage

9. Accession regimes Opted for Bismarckian social insurance system, but plagued with problems of setting up insurance schemes in face of high unemployment and no previous funds. Social insurance organised in various ways. Often re-organised Benefits for poor/unemployed at first very generous but have been continually cut back. Now in Poland many people fell out of coverage. Relatively good economic situation allowed better development of social welfare (especially Slovenia where the welfare state was even expanded). Welfare generally decentralised and NGOs as well as private sector involved. Individual entitlement to welfare rather than family based retained. Generally speaking price subsidies were cut and welfare state cut back and reorganised Wages remain low but more diversified. Benefits via employers cut back.

10. Other ECE General economic situation much worse and unemployment (could be unofficial unemployment) much higher. Lack of reforms in the state system leading to increasing crisis of welfare state. Extensive privatisation of property, devolution of responsibility to the family. Many people fell out of coverage, not entitled to any benefits (especially young people). Increasing role of family to compensate for this. Role of subsistence peasant style production as safety net and in ormal economy � large parts of the economy unregulated and even de-monetized. Encouraged by privatisation. Privileged groups of workers remain due to Govt. fear of repercussions. Heading towards a subisntutional welfare state Retreat of stae from socai contract and inability to maintain obligations Help from abroad, offical and unofficial. INternal and external migration Diffrences beween ethnic groups important.