from Volume 41, Number 2
AUSTERITY VERSUS STIMULUS: INTERNATIONAL
CHALLENGES FOR SOCIAL WELFARE
Howard Karger, James Midgley and Subas Risal
INTRODUCTION TO THE SPECIAL ISSUE
Howard Karger, James Midgley, and Subas Risal
AUSTERITY VERSUS STIMULUS: THEORETICAL
PERSPECTIVES AND POLICY PRESCRIPTIONS
Attempts to respond to the negative social and economic effects of
the Great Recession have been cast in terms of the austerity versus
stimulus debate. Although oversimplified, this debate reflects wider
theoretical analyses of market economies and normative prescriptions
for enhancing their functioning. Referencing the historical
evolution of economic thought, these theories and their policy implications
for responding to recessions are summarized and their
relevance for social welfare is examined in the light of recent events.
THE BITTER PILL: AUSTERITY, DEBT, AND THE
ATTACK ON EUROPE'S WELFARE STATES
There is a general belief among may European policymakers that
the current debt problem in some Eurozone countries is caused
by the unsustainable levels of governmental spending required
to maintain overly generous welfare state programs, a bloated
public sector, overly generous pension levels, state subsidies,
and low user fees for services. Their proposed solution lies in
implementing stringent austerity measures designed to discipline
debt-ridden governments by cutting public budgets, reducing
the number of public sector workers, curbing social benefits,
and sharply narrowing the scope of the welfare state. Based on
a belief in ‘expansionary austerity,’ this approach repudiates a
key Keynesian principle for dealing with a recession—namely,
the use of government spending to pursue full employment.
This paper will examine the austerity measures forced upon
several heavily indebted European nations by the ‘Troika’—
the European Commission, the European Central Bank (ECB)
and the International Monetary Fund (IMF). Also examined
will be the introduction of components of the IMF and World
Bank’s Structural Adjustment Programs (SAP) into the Eurozone
context, and the resulting social and political instability.
BETWEEN RETRENCHMENT AND RECALIBRATION:
THE IMPACT OF AUSTERITY ON THE IRISH SOCIAL
Fiona Dukelow and Mairéad Considine
This article analyzes the impact of austerity on the Irish social
protection system. The analysis is situated in Ireland’s wider financial
and economic crisis and its status as an ‘early adopter’
of an austerity response which has continued under European
Union/International Monetary Fund intervention. We focus on
how the crisis instigated a political narrative about the cost and
design of the social protection system, leading to a programme of
retrenchment and reform which has blended a politics of blame
avoidance with credit claiming. Three core elements in this narrative—
generosity, sustainability and suitability— are identified,
and against this background, a pattern of multi-dimensional
change in social protection across the life course dealing with
working age, pensions, and child income supports is analyzed.
ITALIAN WELFARE IN THE AFTERMATH OF
ECONOMIC CRISIS: NEOLIBERAL REFORMS AND
LIMITS TO THE PATH DEPENDENCY APPROACH
The 2008 world economic crisis provided a plausible rationale
for policy makers in Italy to push forward long needed welfare
cuts, resulting in the neoliberal austerity trend fostered by the
Monti government (2011-2012). This paper seeks to understand
the logic behind the welfare reforms in Italy after the 2008 economic
crisis by describing implemented measures and reviewing
available theoretical approaches in literature that could account
for the reforms’ neoliberal shift from a path-dependent theoretical
approach. It is argued that external forces, that is the economic
crisis and EU pressures, represented the main trigger, and that
political elites marginalized the role played by civil society, with
social problems, such as unemployment, worsening as a result.
DEFICIT-DRIVEN AUSTERITY POLICIES: EFFECTS ON
LOCAL GOVERNMENT AND SOCIAL WELFARE IN
THE UNITED STATES
David Miller and M. C. (Terry) Hokenstad
Austerity policies have been instituted in countries around the
world attempting to address the fallout from the global economic
crisis beginning in 2008 and still lingering through today. While
the literature debates the economic impact of these policies, limited
attention has been given to the effects of austerity at the local
governmental level. It is posited that at the local government level,
the effects of austerity policies are most noticeable and detrimental.
States and local municipalities are “switching roles” with the federal
government (Davidson, 2013, p. 1). They are providing jobs
and social welfare services in the gap left by the departure of the
federal government from a broad social welfare delivery perspective.
The ideological rationale associated with state budgets being
balanced through austerity-like reductions in revenue sharing
and the reducing the social safety net will be highlighted. In the
U.S., the majority of those states which implemented drastic and
sometimes draconian budget reductions have been under majority
Republican legislatures and governorships. Characteristics of
austerity policies and the modern welfare-state are discussed in
relationship to the reduction in public investment, particularly
in government non-education employment through discretionary
spending. The results of austerity policies on funding for
social welfare services and public employment will be illustrated.
WEATHERING THE STORM: BOTSWANA'S CULTURE
Lengwe-Katembula Mwansa and Gloria Jacques
Botswana, a semi-desert southern African state ranked among the
poorest in the world in the 1960s and 1970s, has emerged as an
upper middle income country in the new millennium and a beacon of
democracy and good governance on the continent and in the world.
Since the discovery of diamonds, Botswana has prudently utilised
the ensuing wealth to improve the lives of her citizens. Through a
succession of National Development Plans the state has provided
social services that have addressed many of the needs of the population.
This trend has continued into the challenging era of the world
economic crisis of 2008-2009 that culminated in global financial
meltdown. The country has weathered the storm but continues to
face several challenges including unemployment, drought, economic
diversification, an on-going HIV and AIDS-related crisis,
and the restraints of a commodity-based economy. However, with
a resilience which has characterised its post-independence performance,
Botswana continues to display an aspect of African stoicism
and care that defines this environmentally compromised land.
CONSIDERING POST-CRISIS STIMULUS MEASURES:
WELFARE POLICY AND SOCIAL INCLUSION IN
The onset of the 2007-2008 global financial crisis slowed economic
growth in Brazil and threatened the country’s established trajectory
of decreasing poverty and inequality. To mitigate prolonged
effects of the crisis, leadership implemented a growth-with-equity
stimulus plan, of which investment in income augmentation and
human capital-building programs for the poor were primary elements.
This article examines the economic and social impacts of the
stimulus package. It shows that stimulus measures had overall positive
effects on the economy, but mixed effects on the well-being of
the underprivileged. Improvements in the underprivileged population’s
well-being may be less profound than officials have reported,
as gains on poverty have been assessed in terms of income level and
social program utilization rates, while the low quality of human
capital-building services has been less considered. If the quality of
these services is not improved, human capital development may
be stunted, which could hinder future socioeconomic progress.
QUEENSLAND'S BUDGET AUSTERITY AND ITS
IMPACT ON SOCIAL WELFARE: IS THE CURE WORSE
THAN THE DISEASE?
While considerable attention has been paid to the austerity experiments
in Europe, much less attention has been paid to austerity
case studies from other parts of the world. This paper examines
the case of Queensland, Australia, where the government has pursued
austerity measures, while making dire warnings that unless
public debt was slashed and the public service sector downsized,
Queensland risked becoming the Spain of Australia. The comparison
is incomprehensible, given the very different economic situation
in Queensland compared with Spain. This comparison constructed
a sense of crisis that helped to mask standard neoliberal
economic reform. While pursuing neoliberal economic policies,
the Queensland Government has also been introducing draconian
laws that limit civil liberties and political freedoms for ordinary
citizens. This mix of authoritarianism and austerity has met considerable
resistance, and this dynamic is discussed in the paper,
along with the predictable and unequal impact that austerity
measures have had on the general population and social services.
The Origins of Active Social Policy: Labour Market and
Childcare Policies in a Comparative Perspective.
Reviewed by James Midgley.
Sustainable Failures: Environmental Policy and Democracy in
a Petro-Dependent World.
Reviewed by Chris Williams.
Mental Health and Social Policy. Beyond Managed Care
(6th ed.). David Mechanic, Donna D. McAlpine, and David A.
Reviewed by Christopher G. Hudson.
Family Policy and the American Safety Net.
Janet Zollinger Giele.
Reviewed by Mary Ann Kanieski.
The New Black: What Has Changed – and What Has Not –
with Race in America.
Kenneth W. Mack & Charles Guy-Uriel (Eds.).
Reviewed by Johnnie Hamilton-Mason.
The Globalization of Supermax Prisons.
Jeffrey Ian Ross (Ed.).
Reviewed by Ann Marie Rocheleau.
The Idealist: Jeffrey Sachs and the Quest to End Poverty.
Reviewed by Edward U. Murphy
Ethics. Sarah Banks (Ed.).
Reviewed by Jennifer R. Zelnick.