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When the High-Income Country Context Dissolves: Social Policy Preferences in Low- and Middle-Income Democracies


Berens,  Sarah
International Max Planck Research School on the Social and Political Constitution of the Economy, MPI for the Study of Societies, Max Planck Society;

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Berens, S. (2013). When the High-Income Country Context Dissolves: Social Policy Preferences in Low- and Middle-Income Democracies. PhD Thesis, University of Cologne, Cologne.

Cite as: http://hdl.handle.net/11858/00-001M-0000-0015-79B0-0
The provision of welfare services can be understood as an iterated public goods game in simplified terms. Individuals contribute via taxation while the state cooperates by the provision of welfare services as return for paid contributions. Focusing on welfare provision in low- and middle-income democracies, where we find decisive variation in state capacity and considerable inefficiencies such as high rates of income inequality, corruption, and a prosperous informal economy, the efficiency of the public goods game becomes uncertain. If the state is perceived as weak and untrustworthy because of lacking capacity to extract revenue and to deliver social services, why should individuals turn towards this low-capacity entity for provision of welfare services? Drawing upon the current debate on redistributive preferences in the political economy literature, the overall research question that this dissertation is concerned with therefore asks: what happens to individual social policy preferences when the context of high-income states dissolves? The dissertation analyses social policy preference formation in the context of increased uncertainty that is reflected by weaknesses in the distributive and extractive capacities of the state and inefficiency – that is, the informal economy. Based on cross-country survey data for a large set of less developed democracies, the study illustrates with the use of hierarchical modeling techniques how context characteristics influence individual preferences, next to micro level factors such as income, education, and labor market status. The analyses reveal a considerable impact of these key features of the public goods game for social policy preferences in low- and middle-income democracies. The dissertation builds a micro-foundation for social policy in low- and middle-income democracies that takes into account the institutional and structural framework of the state and the particularities of a stratified labor market.