Corruption, Bureaucratic Failure and Social Policy Priorities
| DOI | 10.1111/j.1467-9248.2012.00998.x |
| Author | Carl Dahlström,Johannes Lindvall,Bo Rothstein |
| Date | 01 October 2013 |
| Published date | 01 October 2013 |
| Subject Matter | Original Article |
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P O L I T I C A L S T U D I E S : 2 0 1 3 VO L 6 1 , 5 2 3 – 5 4 2
doi: 10.1111/j.1467-9248.2012.00998.x
Corruption, Bureaucratic Failure and Social
Policy Priorities
Carl Dahlström
Johannes Lindvall
Bo Rothstein
University of Gothenburg
Lund University
University of Gothenburg
This article argues that bureaucratic capacity – the competence and reliability of the national bureaucracy – matters
to the allocation of public spending among welfare state programmes since it is difficult for governments to justify high
levels of spending on programmes that require bureaucrats to make case-by-case decisions, on a discretionary basis, if
the bureaucracy is incompetent, corrupt or both. We expect bureaucratic capacity to have a positive effect on
programmes that involve bureaucratic discretion, but weak or no effects on programmes that are more straightforward
to implement. In order to test these hypotheses, we analyse public spending on active labour market programmes
(which involve a lot of discretion) and parental leave benefits (which involve less discretion). Relying on data for
twenty advanced democracies from the mid-1980s to the mid-2000s, we find that high bureaucratic capacity does have
a positive effect on active labour market policy spending, but not on parental leave benefits.
Keywords: welfare state; social policy; quality of government; corruption; bureaucratic
discretion
It is well known that social policies vary greatly among the rich democracies, not only when
it comes to the overall character and generosity of the welfare state, but also when it comes
to the allocation of spending across programmes. Political scientists, economists and soci-
ologists have successfully explained many of these cross-country differences with reference
to a combination of political, economic and social factors.Yet we are far from a complete
understanding of social policy making in advanced economies. One reason, we argue, is that
existing scholarship pays insufficient attention to the role of national bureaucracies.
Although many social programmes are difficult to implement, requiring a competent and
reliable bureaucracy, most studies of comparative social policy do not take the bureaucracy
into account. The main institutional models of social policy making are concerned with
political decision making, not with policy implementation.There are case studies and small-n
comparative studies that have emphasised the role of the bureaucracy in social policy
making. Ann Orloff’s work on the US welfare state, which emphasises that ‘elite (and, to a
lesser extent, popular) support for social policy initiatives was conditioned on there being a
suitable instrument for administering the new programs efficiently and honestly’ (Orloff,
1988, p. 43) is the most direct precursor of our argument. More generally, in his Modern Social
Politics in Britain and Sweden, Hugh Heclo (1974, p. 301) argued that the ‘bureaucracies of
Britain and Sweden loom predominant in the policies studied’ (see also Dahlström, 2009;
King and Rothstein, 1993; Weir and Skocpol, 1985). But few scholars have examined the
relationship between bureaucratic capacity and social policy making in quantitative data.
This article argues that the capacity of national bureaucracies to implement social
programmes efficiently explains some of the variation in social policy priorities among the
advanced democracies.We show that in states with low bureaucratic capacity, governments
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C A R L D A H L S T R Ö M , J O H A N N E S L I N D VA L L A N D B O R O T H S T E I N
spend less on programmes that require bureaucrats to make case-by-case decisions on a
discretionary basis.1
In order to test the hypothesis that the competence and reliability of the bureaucracy
influence spending on programmes that involve bureaucratic discretion, but have weak or
no effects on other programmes, we analyse spending on active labour market policies
(ALMP) (which involve a lot of discretion) and spending on parental leave benefits (which
involve much less discretion), expecting the capacity of the national bureaucracy to
influence positively spending on active labour market programmes, but not spending on
parental leave benefits.The empirical analysis, which uses a panel of annual data for twenty
countries from the mid-1980s to the mid-2000s, shows that high bureaucratic capacity does
have a positive effect on active labour market policy spending, but weak or no effects on
parental leave benefits.
Theory
According to data generated by the International Social Survey Programme (ISSP), 40 per
cent of US survey respondents believe that it should be ‘the responsibility of government
to provide a job for everyone who wants one’. In the Nordic countries, 65 per cent are of
the same opinion. When they were asked if it should be ‘the responsibility of the govern-
ment to reduce income differences between the rich and the poor’, only 50 per cent of US
respondents answered in the affirmative, whereas 64 per cent did in the four Nordic
countries. Responding to the question of whether it should be ‘the responsibility of the
government to provide a decent standard of living for the unemployed’, 50 per cent of US
respondents said ‘yes’, much fewer than the figure for the Nordic countries, which was 81
per cent (Bechert and Quandt, 2009).
One possible explanation for this cross-national variation in attitudes to the welfare state,
which is highly correlated with the variation in actual social policy priorities, emphasises
the role of ideology, noting that the values of social democratic parties and blue-collar trade
unions have been more influential in the Nordic societies than in Anglo-Saxon countries
such as the United States. According to this interpretation, the causal link goes from
ideology (or norms) to policy preferences.A second explanation is that a smaller proportion
of the population in the United States expect to be net beneficiaries of high levels of social
policy spending than in the Nordic countries.2 According to this interpretation, the causal
link goes from perceptions of self-interest to policy preferences. A third explanation
concerns the role of political organisations and social mobilisation. In this type of model,
the power configurations of interest organisations and political parties matter greatly to the
policy choices of governments.
The three explanatory variables that we have mentioned so far (ideology, self-interest and
power resources) are all located outside the state.We wish to suggest an explanation of the
variation in social policies across countries that is more state centred in the sense that the
character of government institutions is the main explanatory variable. Our argument is thus
very much in line with claims made by authors such as Hugh Heclo, Ann Orloff, Theda
Skocpol and Margaret Weir. For example, in their analysis of responses to the Great
Depression, Weir and Skocpol (1985, p. 149) show that policy choices were influenced by
how political agents viewed the ‘capacities of the state’. It is important to note that the survey
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questions cited above did not ask if it would be a good thing in general to support the less
fortunate in society.The respondents were asked if ‘the government’ should perform these
tasks. In other words, the questions do not only tap into preferences over policy outcomes,
but also into attitudes and beliefs concerning the instrument that is meant to carry out the
proposed policies. It is perfectly reasonable to be in favour of economic support for the
unemployed or the poor in general while at the same time distrusting the government’s
capacity to implement such policies.Voters and politicians who distrust the government may
well prefer not to spend public money on programmes for the unemployed and the poor,
perhaps leaving these tasks to other institutions, such as voluntary associations (churches,
unions and charities) or families (or clans, which are networks of families).
In other words, even if citizens and politicians believe that social protection and redistri-
bution are legitimate political objectives, they may have more or less well-founded suspicions
about the quality of the bureaucracy. On the one hand, they may believe that the bureaucracy
is not sufficiently competent to carry out complicated policies in a legitimate and efficient
manner (governments are frequently associated with heavy-handedness, hassle, implemen-
tation failures and discriminatory practices). On the other hand, they may believe that the
bureaucracy is unreliable due to widespread corruption.Although incompetence and corrup-
tion are clearly two different types of state failure, the perception of either might reasonably
lead citizens and politicians to oppose policies that they would in principle have liked to see
enacted. For the purposes of this article, therefore, it is reasonable to combine competence
and reliability (the absence of corruption) into a broader measure of bureaucratic quality.
Based on analyses of survey data from the European Social Survey, Stefan Svallfors has
recently shown that in countries where people perceive that the quality of government
institutions is high and corruption is a rare phenomenon, they are generally more in favour
of...
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