Welfare State: Solidarity and Private Insurance
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Questions and Answers

What is a key characteristic of a liberal welfare state?

  • It is based on affective motives, such as community spirit or altruism
  • It limits welfare to one-sided solidarity, keeping costs low (correct)
  • It focuses on the middle-class people wanting to insure themselves against the risks of a capitalist society
  • It provides high standard of public services to the middle classes and decent support to the least advantaged

    • What is a common issue with the conservative welfare state?

  • It is based on enlightened self-interest, which may not be sustainable
  • It may lead to a high standard of public services, but is questionable long-term due to high taxes (correct)
  • It may lead to opportunistic behaviour and abuse
  • It appeals to affective motives, which may be weak in some countries

    • Why might a supranational welfare state not be viable in the European context?

  • Because international risk pooling is not beneficial
  • Because of large differences between national welfare states (correct)
  • Because people do not trust fellow countrymen
  • Because of the lack of direct payments from the EU to citizens

    • What is a potential issue with risk pooling in a homogeneous group?

    <p>People with above average risks can have difficulties accessing groups</p> Signup and view all the answers

    What is a characteristic of two-sided solidarity?

    <p>It involves mutual interdependence and trust that others will also contribute</p> Signup and view all the answers

    What may happen if there is an imbalance between one-sided and two-sided solidarity in a welfare state?

    <p>The least-advantaged groups may not receive sufficient support</p> Signup and view all the answers

    Why might international risk pooling be beneficial?

    <p>Because it provides a more stable support</p> Signup and view all the answers

    What is a potential issue with informal, communal solidarity?

    <p>It may nullify solidarity between groups</p> Signup and view all the answers

    Why might the conservative welfare state appeal to the middle-class?

    <p>Because it provides a high standard of public services</p> Signup and view all the answers

    What is a characteristic of a liberal welfare state in terms of taxation?

    <p>The taxes are low and beneficial for citizens</p> Signup and view all the answers

    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.

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