The Growth of Sectoral Cleavages and the Stabilization of State Expenditures

Abstract

Existing radical explanations of the turndown in public expenditure and welfare state growth across most liberal democracies from the mid-1970s are of two types. In economic explanations the shift is attributed to the changing economic imperatives of capitalist economies in the new world recession, In ideological explanations it is argued that governments have tried to reestablish the predominance of market disciplines and allocation systems in social life, more indirectly responding to business pressure and fiscal strains. The economic approach does have a causal account of how these changes are translated into state policy via business pressure on governments undergoing monetary or fiscal crises. But neither approach can adequately explain how electorates are persuaded to convey functionally appropriate signals to governments in making their political choices, nor the apparently central, partially autonomous role played by political institutions in triggering major policy changes. By contrast, attention to the impact of state intervention in creating sectoral cleavages in consumption and production does offer a set of detailed causal mechanisms which would have the effect of rendering welfare state growth politically self-stabilizing. A brief theoretical model is provided of the main influences involved.