The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State

The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State

The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State

The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State

Synopsis

'Presents a cogently argued account of the principles underlying Welfare State policies and their practical consequences... I have not seen the economic and public policy distinction between compulsory and post-compulsory education set out so clearly and convincingly before.' -Judith Marquand, Mansfield College, Oxford, Journal of Public Policy'The book is a fruitful blend of economic modelling and institutional analysis... An impressive feature is the author's discussion in each section of 'twenty first century issues' and the final part of the book on 'The Welfare State in a Changing World'... this book goes to the heart of the economic issues surrounding the welfare state, and stimulates the reader to further thought.' -Tony Atkinson, Nuffield College, Oxford'If I were asked to design a social policy course from scratch... I would certainly include Nicholas Barr's book as a key text... this is a stimulating and successful text, a good example of the contribution economic analysis can make to social policy teaching and study.' -Rudolf Klein, London School of Economics and London School of Hygiene, Social Policy'Barr's book can be strongly recommended to anyone with an interest in the development of social policy... Excellent and timely.' -Sir Howard Davies, Times Higher Education SupplementThis book is about economics and its application to the welfare state. Its core argument is that the welfare state exists for reasons additional to poverty relief, reasons arising out of pervasive problems of imperfect information, risk, and uncertainty. Barr focuses on the efficiency argument, indicating that the welfare state is here to stay, and discusses the ways in which it can and will adapt to economic and social change.

Excerpt

This book is about economics and its application to the welfare state. Its core message is that—contrary to widely held views—the welfare state exists for reasons additional to and separate from poverty relief, reasons that arise out of pervasive problems of imperfect information, risk, and uncertainty. Flowing from that analysis, the book argues, secondly, that the welfare state is here to stay, since twenty-first-century developments do nothing to undermine those reasons—if anything the reverse. To argue that the welfare state is robust does not, however, mean that it is static. a third set of arguments concerns the ways it can and will adapt to economic and social change, including discussion of the direction of change and also specific (and in some cases novel) solutions.

The book grows out of a series of papers whose intellectual roots lie in my earlier work on the microeconomic foundations of the welfare state, notably the first (1987) edition of The Economics of the Welfare State. Presented as an integrated whole—the purpose here—they tell a more powerful story than each individually. This book contrasts with my earlier volume, first, in its exclusive focus on the efficiency argument for the welfare state, an underdeveloped area that this book strengthens. Its analytical reach is thus narrower but deeper. Secondly, the analysis is international: it applies to the advanced industrial countries, includes discussion of post-communist countries, and reaches out towards middle-income developing countries. Finally, the story is forward looking, with some chapters explicitly about twenty-first-century issues.

Topics that are new, or that go further than previous discussion, include: forces leading to convergence of private and social insurance; genetic screening and its impact on insurance; approaches to financing long-term care; a new slant on options for pension reform, including pension design in the face of fluid family structures, and where workers are occupationally and internationally mobile; designing loans to finance investment in human capital, including options that incorporate an element of social insurance; and new ways of involving private finance in tertiary education, including new forms of domestic and international financial instruments.

In the academic world, the book will be of interest, first, to economists, as applying the economics of information systematically to the welfare state, and to colleagues in departments of social policy because of its subject matter. the book should be of interest also in related areas such as political economy, as an explanation of the durability of certain types of institution despite apparently adverse economic and political pressures, and to colleagues studying post-communist

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