The Design of Social Policy and Welfare Systems
Most advanced countries over the past eight decades have created various social programs which have become fully-fledged welfare systems. Many countries developed means-tested programs aimed at assisting specific “deserving” individuals and families. Some accompanied these programs with “tax expenditures” designed to reduce the cost of buying particular “meritorious” goods and services. Other countries focused more on providing universal programs aimed at and available to everyone and also tried to avoid the use of tax expenditures, utilizing more broad-based taxes that could finance their higher public spending. The former group (mostly Anglo-Saxon countries) ended up with lower spending and tax levels but with more complicated systems. The other group (Scandinavian and some other European countries) ended up with higher spending and tax levels but with simpler systems. For these latter countries, high taxes and spending programs do not seem to have been the “road to serfdom” or to have led to the economic stagnation predicted.