QSTN: Compare and contrast the adequacy of the residual welfare and institutional
redistributive models in explaining social policy provision in developed and developing countries.
While models of social policies are often insufficient, they do provide a basis for analysing the ways in which countries engage in efforts of social development. This paper draws from the ways in which social policies have been presented by Titmus (1974) in terms of the basic distinction between the institutional redistributive model of social policy and the residual welfare model of social policy. The basic division between these models can be seen in the basic assumptions. In the residual model the basic assumption is that markets and families are the natural channels to fulfil citizens welfare needs and social policy measures should take place only when these do not function and as temporary replacement. In the redistributional institutional model social policy is an integrated part of public policies which providers for services and benefits for citizens outside markets on the basis of needs. Korpi (1983) has further explored the potential differences between marginal and institutional models of social policy in terms of share of social expenditure, participating population, employment oriented measures, preventive measures, predominant type of intervention, main type of financing, progressivity of financing, role of nongovernmental organisations and role of means testing and social control. In many ways debates around poverty reduction and social funds still deal with many of these issues and divisions. Social welfare becomes "residual" when its nature is reactive or gap-filling. This approach deals with needs as they come; it attends to visible needs that can't be addressed by other societal means. As a prerequisite, this system first ensures that all other efforts and measures have been depleted – support from family, market economy and religious institutions -before assistance measures are given (Souza, 2005). It is short-term in that it is withdrawn when the person in need of aid becomes capable of independence from the system. Since residual social welfare is reactive, it only acts when the problem is obvious and already needs immediate attention. Residual social welfare often caters to poor and underprivileged members of society and it’s often funded by philanthropic individuals belonging to the middle and upper class. Examples of residual social welfare include services for battered women and children, mental institutions, orphanages, emergency evacuation and housing, food stamps and rent subsidies. All these examples cater to problems already faced by the
individual. Residual social welfare also often provides people with jobs and other sources of income so that these individuals can survive on their own in the future (Souza, 2005). Institutional redistributive social model takes the approach that everyone deserves to be supported by the community and the government, even without an obvious and direct request for help, so each person can become self-sufficient. It’s also preventive in nature, because it anticipates problems that may arise and resolves them as early as possible. For example, if one of the main social problems in a community is lack of education, social policy focus on giving free education to everyone, regardless of their personal circumstance. Institutional social welfare focuses on giving each person equal opportunity to be supported, whatever their circumstance (Souza, 2005). Government-funded social services are some of the best examples of this type, as it is offered to everyone without the need for application or justification. Examples of institutional social services include free day care programs, free education, and social security programs. These services do not distinguish the need of one individual from another and it can be availed by anyone who wants it. Some other examples of institutional social welfare include free medical services, government-funded scholarship programs and housing subsidies. These two models can be seen as 'ideal types', but they do provide a ground for a basic analysis of social policies which could be useful also in the context of development policies and perhaps more useful in a development context than later comparative welfare state models contextualised mostly in the developed countries (Esping-Andersen 1990). Ginsburg has also brought further dimensions of class, race and gender divisions to the analysis of comparative social policy (Ginsburg 1992). In the 'real world', the United States model and to some extent the United Kingdom model of social policies can be seen as ideologically closer residual model, whereas the old nordic models of welfare states can be seen to have followed the institutional redistributive models of social policies. While most welfare states are based on mixed models, there are clear differences in emphasis and practice which to some extent follow initial divisions by Titmus and Korpi and can be helpful in providing possible alternatives and choices in social policies or at least in understanding the scope of social policies. For example, the development of social policy in Germany has followed a unique historical path. During a long process of growth and social experimentation, Germany combined a vigorous and highly competitive capitalist economy with a social welfare system that, with
some exceptions, has provided its citizens cradle-to-grave security. The system's benefits are so extensive that by the 1990s annual total spending by the state, employers, and private households on health care, pensions, and other aspects of what Germans call the social safety net amounted to roughly DM1 trillion and accounted for about one-third of the country's gross national product, (EU Report 2002). Unlike many of the world's advanced countries, however, Germany does not provide its citizens with health care, pensions, and other social welfare benefits through a centralized state-run system. Rather, it provides these benefits via a complex network of national agencies and a large number of independent regional and local entities--some public, some quasi-public, and many private and voluntary. Many of these structures date from the nineteenth century, and some from much earlier. The legislation that established the basis of this system dates from the 1880s and was passed by imperial Germany's parliament, the Reichstag, with the dual purpose of helping German workers meet life's vicissitudes and thereby making them less susceptible to socialism. This legislation set the main principles that have guided the development of social policy in Germany to the present day: membership in insurance programs is mandated by law; the administration of these programs is delegated to non state bodies with representatives of the insured and employers; entitlement to benefits is linked to past contributions rather than need; benefits and contributions are related to earnings; and financing is secured through wage taxes levied on the employer and the employee and, depending on the program, sometimes through additional state financing. These insurance programs were developed from the bottom up. They first covered elements of the working class and then extended coverage to ever broader segments of the population and incorporated additional risks. Over time, these programs came to provide a wide net of entitlements to those individuals having a steady work history. By international standards, the German welfare system is comprehensive and generous. However, not everyone benefits equally. In the mid-1990s, the so-called safety net was deficient for the lower-income strata and the unemployed. It was also inadequate for persons needing what Germans term "social aid," that is, assistance in times of hardship. In 1994, for example, 4.6 million persons needed social aid, a 100 percent increase since the 1980s (UNDESA, 1999). Germans who had been citizens of the former German Democratic Republic (GDR, or East Germany), which became part of the Federal Republic of Germany (FRG, or West Germany) in 1990, tend to be overrepresented in each of these groups. Women
are more at a disadvantage than any other social group. This fact stems from the bias of German social insurance programs in favor of a male breadwinner model; most women receive social and health protection by virtue of their dependent status as spouse. Hence, despite the existence of a comprehensive interlocking social net, women face inequalities in accruing benefits in their own right because of periods spent rearing children or caring for an elderly parent. Divorced women also fare poorly because of the welfare system's provisions, as do widows, whose pensions are low. Attention has been drawn to the meagre resources available to basic social services (Mehrothra and Delamonica 2002). In terms of the initial purpose of social funds there is no doubt that they represent a very residual model of social policies and that their original role was meant merely to support implementation of economic reforms. The experiences of the early social funds and safety nets in poverty reduction have been very limited (Cornia 2001, Vivian 1995). However, in spite of the limited benefits the schemes have continued, most probably due to other reasons. The temporary structures have now become more permanent and widely utilised to disburse social sector funds. Furthermore, these seem to be seen also as a model for reform of the public sector and local governance for future. In the 1980s and 1990s the rise of the Right, which privileged individual responsibility and a limited role for the state, had a profound influence in some of the key industrial countries. Margaret Thatcher’s insistence that “there is no such thing as community” touched on one of the most important ideological underpinnings of social policy—solidarity and citizenship. It is this neoliberal ideological position that has set the limits on social policy and underpins the preferences for “user fees”, means-testing, market delivery of social services or “partnerships” in their delivery. This ideology has also eliminated the equity concerns that have been central to all the successful experiences of poverty eradication. And with ideologies of equality in retreat, policies pushing for universalistic policies, together with their accompanying redistributive measures, were bound to experience setbacks. These ideological shifts in the North led to similar shifts in the South, where the attacks on the welfare state were extended to include the developmentalist ideologies with which it had strong conceptual and ideological affinities (Mkandawire, 2006). In the name of developmentalism, socialist ideologies and nation-building, many Third World governments had tended to lean toward universal provision of a number of services, including free health, free education and subsidized food. For the aid-dependent or client state, ideological shifts
reflected changes in the donor countries and international financial institutions (IFIs). Yet the ideological assault on universalism was not only externally driven but had internal drivers as well. South Africa’s publicly funded social safety net consists of multiple conditional cash grants. This social protection network has expanded considerably since 2002, following the addition of a child support grant to the suite of social grants (predominantly the old age pensions and disability grants). Today, the largest numbers of social protection recipients are poor households with children. This growth has been achieved primarily through adjustments in the targeting criteria (means testing and raising the eligibility age for child grant recipients). At the end of 2009/10 fiscal period, there were 13.9 million recipients of grants, receiving more than R80bn from the national budget at an administrative cost in excess of R5bn (UNDESA, 2013). By 2013, it is projected that social security benefits will be delivered to 16 million people (Government of South Africa, 2011). Similarly, reform to the public works and school nutrition programmes, among other forms of social assistance, are to be expanded and set to increase fiscal spending. There is evidence to show that South Africa’s social welfare system targets poor households (often beneficiaries of more than one grant) and this has evidently helped to close the income poverty gap. Moreover, households receiving social grants tend to live in communities eligible for access to other forms of social protection, including grants for public works and to boost agricultural development among resource-poor small farmers. The paper sought to compare and contrast the adequacy of the residual welfare and institutional redistributive models in explaining social policy provision in developed and developing countries. This paper draws from the ways in which social policies have been presented by Titmus (1974) in terms of the basic distinction between the institutional redistributive model of social policy and the residual welfare model of social policy.
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