THE POLITICAL ECONOMY OF SOCIAL POLICY AND THE WELFARE STATE
Ivan Csaba
Term: Winter 1995
Department of Political Science, Budapest
CENTRAL EUROPEAN UNIVERSITY


Course Summary:


The core material of the course is covered by the obligatory reading list aed by the lecture series. The recommended literature is for special interest and it ismquired for the examination. For non-technical readers alternative readings are suggested where it might be needed.

1.Welfare State Development
Required Readings:
Pierson,C. (1991): Beyond the Welfare State? pp. 102-132 and 159-178. Chapters 4 and 5: Origins and Development of the Welfare State; Contradiction and Crisis in the Developed Welfare State. Polity Press: Carnbridge.
Recommended literature:
On expendture trenzis and structure:
OECD (1985): Social Expenditure 1960 1990, Paris
OECD (1994): New Onentations in Social Policy, Paris
Comparanve history:
Flora,P. and A. J. Heidenheimer (1981) The Development of Welfare States in Europe and America, New Brunswick and London

2.Interpretations of the Welfare State
(Industrialisation, Modernisation, Politics Based Explanations, Libertarian and Marxist Interpretations, and the Public Choice Approach)
Required Readings:
a. A survey
Pension Rights in Welfare Capitalism. The Development of Old-Age Pensions in 18 OECD countries 1930 to 1985 : pof approaches.
Palme,J. (1990) p.1-13 Chapter I.: Approaches to the study of welfare state development. University of Stockholm, Swedish Institute for Social Research N.14
Flora,P. and J. Alber (1981): Modernization, Democratization and the Development of Welfare States in Western Europe, DD. 37-47. In: Flora,P. and A. J. Heidenheimer (1981) The Development of Welfare States in Europe and America, New Brunswick and London
Esping-Andersen, G (1990): The Three Worlds of Welfare Capitalism, . 16-34. Chapter I.: The three political economies of the welfare state. Polity Press: Cambridge.
Pierson, C. (1991): Beyond the Welfare State? ~.41-61.Chapter 2: Capitalism, Social Democracy and the Welfare State II: Political Economy and the Welfare State. Polity Press: Cambridge.
b. The public choice approach and the role of the middle-classes:
Stigler, G.J. (1970) Director's Law of Public Income Distribution. Journal of Law and Economics, 13, pp.1-10.
Goodin R.E. and J. Le Grand (1987):Not Only the Poor; ~.203-18 (Chapter 10) Allen &;Unwin: London.
Recommended literature:
Marshall, T. H.(1950): Citizenship and Social Class In: Marshall, T.H. and Bottomore (1992): Citizenship and Social Class, Pluto Press.
Hayek F.A.(1960): The Constitution of Liberty pp.253‹67, Chicago, The University of Chicago Press.
Offe C. (1981): Some Contradictions of the Modem Welfare State pp. 147- 162. In: Offe,C. (1984): Contradictions of the Welfare State, MIT Press
An elementary introduction to Public Choice:
Stiglitz, J.E.(1988): Economics of the Public Sector, 145-177 Chapter 6.:Public Choice. Norton: New York.

3. Social Policy in Eastern and Central Europe
(Social Welfare under Communism and the Transition)
Required Readings:
Adam J. (1991): Social Contract ~.1-25. In: Adam J. (1991): Economic Reforms and Welfare Systems in the USSR, Poland and Hungary, McMillan.
Kornai, J. (1992): The Socialist System; pp.312-330. The chapter on Consumption and Distribution, OUP.
On the transitory period:
Barr, N and R.H. Harbison (1994): Overview: Hopes, Tears and Transformation, 1-25. in Barr, N. (1994): Labor Markets and Social Policy in Central and Eastern Europe, OUP.
Recommended literature:
Marx,K: "Critique of the Gotha Program", .159-163. In: Ryan A. ed.(1993): Justice, OUP.
Atkinson, A.B. and J. Micklewright (1992): Economic Transformation in Eastern Europe and the Distribution of Income, CUP.
Deacon, B. and Szalai J. ed. (1990): Social Policy in the New Eastern Europe, Avebury, Gower Publishing Company ,
Deacon B ed. (1992): Social Policy, Social Justice and Citizenship in Eastern Europe, Avebury, Gower Publishing Company
Ferge ZS. and Kolberg J. E.(1992): Social Policy in a Changing Europe, Campus: Franldurt.

4. The Problem of Distributive Justice
(An Overview of Competing Arguments)
Required Readings:
Barry Normann (1981): An Introduction To Modern Political Theory; 110-138. Chapter 6: Justice. St. Martin's: New York..
Musgrave, R.A. and P.B. Musgrave (1989): Public Finance in Theory and Practice .73- 85. Chapter 6: Equity in Distribution. McGrew-Hill:London.
Recommended literature:
Ryan, A. ed.(1993): Justice, OUP. Chapters by J. Rawls, R. Nozick and F.A. Hayek.
Goodin, R.E. (1988): Reasons for Welfare: The Political Theory of the Welfare State.Chapter 6: "Dependency" Princeton University Press Le Grand (1992): Equity and Choice.Harper-Collins
5. Poverty and Income Inequality
(Basic Concepts and Measurement Techniques)
Required Readings:
Barr, N. (1993) The Economics of the Welfare State, ~.132-162. Chapter 6: "Problems of Definition and Measurement." Weidenfeld &;Nicolson
Ringen, S. (1987) The Possibility of Politics pp.l66-91. Chapter 8: Equality. Clarendon Press: Oxford.
Recommended literature:
Atkinson, A.B. and J. Micldewright (1992): The Distribudon of Income in Eastern Europe, WSP/72, STICERD:London.
Sen, A. K. (1983) Poor Relatively Speaking and Townsend, P (1985) A Sociological Approach to the Measurement of Poverty: A Rejoinder to Professor Amartya Sen, Oxford Economic Papers Vol.35,Vol.37.

6. The Economics of Public Welfare
(Market and Government Failures, Incentives and Tradeoffs)
Required Readings:
Barr, N. (1993): The Economics of the Welfare State, pp.70-103. Chapter 4: Economic Theory l:State Intervention. Weidenfeld &;Nicolson.
Okun, A.M. (1975): Equality and Inefficency - The Big Tradeoff, pp.89-100. Chapter 4: Increasing Equality in an Efficient Economy. The Brookings Institution.
Recomended literature:
Barr, N. (1992)-Economic Theory and the Welfare State: A Survey and Reinterpretation, Journal of Economic Literature, June
Friedman, M. and R. Friedman (1980) Free to Choose ~.118-59. Chapter 4: Cradle to Grave. Penguin: London
A non-technical alternative
Glennerster H (1992) Paying for Welfare - The 1990s, ~. 15-30. Chapter 2: "The Theoretical Basis for the State Funding of Services". Harvester,Weatsheaf

7. Social Insurance and Public Pension Programs
(Economics of Insurance, Social Insurance vs. Private Insurance, Funding Methods of Pensions)
Required Readings:
Barr, N. (1993): The Economics of the Welfare State, . 111-30. Chapter 5: Economic Theory2: Insurance. Weidenfeld &;Nicolson.
Barr, N. (1992): "Economic Theory and the Welfare State: A Survey and Reinterpretation", Journal of Economic Literature, June. pp. 765-68.
Barr, N. (1993): "Retirement Pensions",pp.45-57. In: Barr,N. and D. Whynes (1993): Current Issues in the Economics of Welfare. MacMillan.
Central and Eastern European issues:
BaxT, N. (1994): "Income Transfers: Social Insurance", ~.192-220. In: Barr, N. ed. (1994): Labor Markets and Social Policy in Central and Eastern Europe, OUP.,
Recommended literature:
a. A non-technical alternative:
Stiglitz, J.E. (1989): Economics of the Public Sector, ~. 325-46. Chapter 13: Social Insurance. London W.W. Norton &;Company
b. On pension prograrns:
OECD (1988): Reforrning Public Pensions, Paris.

8. Non-contributory Benefits and Social Assistance (Means-tested Benefits, NIT and Social Dividends)
Required Readings:
Atkinson (1989) "Private and Social Insurance, and the Contributory Principle", 20-44. In Barr,N. and D. Whynes (1993): Current Issues in the Economics of Welfare. MacMillan.
Musgrave, R.A. and P.B. Musgrave (1989): Public Finance in Theory and Practice pp.19G 22. Chapter 11: "Low-Income Support and Social Insurance". McGraw-Hill:London.
Central and Eastern European Issues:
Sipos, S (1994): "Income Transfers: Family Support and Poverty Relief", 225-258. b: Barr, N. ed. (1994): Labor Markets and Social Policy in Central and Eastern Europe, OUP.
Recommended literature:
Friedman, M. (1962) Capitalism and Freedom, pp. 175-195. Chapter X1 and EI: "Social Welfare Measures; The Alleviation of Poverty" The University of Chicago Press.
Atkinson A. B. (1987): "Income Maintenance and SocialInsurance: A Survey". In: Auerbach and P. Feldstein ed.: Handbook of Public Economics Vol.2

9. Health Care
(Demand and Supply Side Problems, Comparative Health Systems)
Required Readings:
Culya, A.J.(1980): Health Services in the Mixed Economy, ~.128-143. Reprint Series N.340. University of York.
Central and Eastern European Issues:
Perker,A.S. R.G. Feachem (1994): Health and Health Care; ~88-320. In: Barr, N. ed. (1994): Labor Markets and Social Policy in Central and Eastern Europe, OUP.
Recommended Literature:
OECD(1992): The Reform of Health Care pp.13-29, Paris.
OECD (1990): Health Systems in Transition, Paris
Heidenheimer A.J., H. Heclo, T. Carolyn (1990) Comparative Public Policy. The Politics of Social Choice in America, Europe and Japan. X 57-83. Chapter 3: Health Policy. McMillan Press Ltd.

10. Education
(Human Capital, Finance and Provision, Vouchers and Loans)
Required Readings:
Glennerster H.(1994): "The Economics of Education: Changing Fortunes" pp. 176-200. In: Barr, N and D. Whynes (1994): Current Issues in the Economics of Welfare, MacMillan.
Central and Eastern European Issues:
Laporte, B. and J. Schweizer (1994): "Education and Training"; pp. 260-286. In: Barr, N. ed. (1994): Labor Markets and Social Policy in Central and Eastern Europe, OUP.
Recommended literature:
G, Johnes (1992): The Economics of Education; pp.116-139. Chapter 7: Auctions, Vouchers and Loans. MacMillan.
Stiglitz, J. (1988) The Economics of Public Sector; pp.367-82. Chapter 15: Education. Norton: New York.
11. Housing
(The Housing Market, Owner-Occupation and the Rented Sector, Housing Benefits)
Required Readings:
Barr, N. (1993): The Economics of the Welfare State, pp.378-92. Chapter 14: "Housing". Weidenfeld &;Nicolson.
Culyer A.J. (1980): The Political Economy of Social Policy, pp.262-268. Chapter 10: "Housing". Oxford, Martin Robertson.
Heidenheimer A.J., H. Heclo, T. Carolyn (1990): Comparative Public Policy, pp.110-125. Chapter 4: "Housing Policy". McMillan
Recommended literature:
Sillince J. (1990): "Housing Policies in Eastern Europe and the Soviet Union", pp.6-57. In: Silince J.ed.: Housing Policies in Eastern Europe and the Soviet Union. Routledge,London
A non-technical alternative:
Glennerster H (1992) Paying for Welfare - The 1990s. Chapter 10: "Paying for Housing". Harvester Weatsheaf.

12. Private Welfare
(Charity, Mutual Help and Kinship, Occupational Welfare)
Required Readings:
Glennerster, H. (1992) Paying for Welfare - The 1990s, pp.141-155. Chapter 9: "Charity and Giving", Harvester Weatsheaf.
Pollak, R. (1985): "A Transaction Cost Approach to Families and Households", Journal of Economic Literature, March; pp.581-90.
Green, D. (1993): Reinventing Civil Society: The Rediscovery of Welfare Without Politics, pp.30-45. IEA Health and Welfare Unit, London.
Higgins J. (1981): States in Welfare - Comparative Analysis in Social Policy; ,.136-144. Chapter 7: "Public and Private Systems of Welfare". Blackwell: Oxford
Recomrnended literature:
a. On Occupational Welfare and Privat Insurance:
Bodie Z. (1990): "Pensions as Retirement Income Insurance", Journal of Economic Literature, March l
Papadakis E. and P. Taylor-Gooby (1987) The Private Provision of Public Welfare, New York, St. Martin Press
b. On Kinship Networks
Platteau, J.P.(1991): "Traditional Systems of Social Security and Hunger Insurance" In: Ahmed, E.,J. Dreze, J. Hills and A. K. Sen (1991): Social Security in Developing Countries, Clarendon Press
Ringen, S (1987) The Possibility of Politics ~.141-161.Chapter 6: Activity. Clarendon


Digitized version prepared by the Curriculum Resource Center (CRC)
CEU Budapest, Hungary
Revised: April, 1996

Csa_PolEcon.W95PS.v5


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