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Questions and Answers
What is a key characteristic of a liberal welfare state?
What is a common issue with the conservative welfare state?
Why might a supranational welfare state not be viable in the European context?
What is a potential issue with risk pooling in a homogeneous group?
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What is a characteristic of two-sided solidarity?
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What may happen if there is an imbalance between one-sided and two-sided solidarity in a welfare state?
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Why might international risk pooling be beneficial?
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What is a potential issue with informal, communal solidarity?
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Why might the conservative welfare state appeal to the middle-class?
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What is a characteristic of a liberal welfare state in terms of taxation?
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Study Notes
Liberal Welfare State
- Limits welfare to one-sided solidarity, covering only basic needs, resulting in low costs
- Provides less protection to the least-advantaged citizens
- Two-sided solidarity is organized outside of the welfare state, through private companies in the free market
Characteristics
- Draws a strict line between those who receive welfare and those who contribute to it
- Prevents costly circulation of funds between the same people
- Appeals to affective motives, such as community spirit or altruism, but not self-interest
- Problematic in countries with no strong affective motives, as people may not want to help without receiving anything in return
Challenges
- Processes of individualization and globalization may weaken affective motives
- Creates in-group and out-group dynamics, with the contributors and the poor
- Outsiders are kept out as much as possible
- The problem of adverse selection: only those who need specific support will want others to contribute to it
Conservative Welfare State
- Supports external misfortune insurances, such as sickness and disability
- Based on both one-sided and two-sided solidarity
- Provides high standard of public services to the middle classes and decent support to the least advantaged
- High taxes make it questionable if these states are sustainable long-term
Scandinavian Model
- Higher community spirit due to higher homogeneity
- Personal contact fosters affective ties and facilitates control of individual behavior
- Prevents opportunistic behavior and abuse
- Risks and benefits are more similar, thus no disproportionate benefit
- Everyone has the same chance to benefit from solidarity
Possible Issues
- Nullified solidarity between groups
- People with above-average risks can have difficulties accessing groups
- Insufficient risk spread (everyone experiences a downturn at the same time in the same industry, so no one can pay the unemployment benefits)
- Unclear optimal scale of organization
Supranational Welfare State
- Considered viable by very few people in the European context
- Large differences between current national welfare states
- Pre-conditions of two-sided solidarity are not met
- No direct payments from the EU to citizens
- Economic risks, such as unemployment, are not presented equally in Europe
- Most people do not consider themselves primarily European and trust fellow countrymen more
International Risk Pooling
- Can be beneficial and provide a more stable support
- Based on pure enlightened self-interest
- Already done by international corporations to avert risk
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Description
This quiz explores the characteristics of a liberal welfare state, including the limitations of one-sided solidarity and the role of private insurance companies in providing protection to citizens.
