Welfare is a type of government support intended to ensure that members of a society can meet basic needs.15 Often welfare is used as synonymous with social security but actually, social security includes a governmental support system only for sickness, accidents at work, incapacity for work, and unemployment. Welfare-related instruments can be both allowances and services. A country that takes responsibility for social welfare is called a welfare state.
Historically, the role of the state was limited to providing assistance to those whose needs could not be met by institutions like family, the market or voluntary service, e.g., the church. The state was not directly responsible for ensuring the social security and well-being of people. As a result of social changes that took place at the end of the 19th century and the beginning of the 20th century, the role of the state and its intervention in people’s lives began to increase significantly.16
The history of the modern welfare state goes back to the 1840s when Otto von Bismarck, the Chancellor of Germany, introduced old age pensions, accident insurance and medical care in some German states. These programs were introduced to reduce the emigration of workers to the United States, where wages were higher but welfare did not exist.17 Over time, the needs of people expanded and besides social security, governments undertook the role of organizing new areas such as health, education and science, transport, environmental protection, agriculture, culture, etc. Governments expanded their activities to the social sphere and the concept of the welfare state emerged.
The welfare state is not designed for the poor, it is designed to protect people from poverty. The term “welfare state” is defined differently in the literature. Esping-Andersen (1999) argued that after World War II the welfare state included primarily state intervention to reduce the economic insecurity people experienced during their “inactive” years of life.18 Pestieau (2006) focuses on defining the functions of the welfare state. In addition to mitigating social risks, the welfare state also provides social assistance and supports education.
Thus, the welfare state does not deal only with “inactive” citizens but also for example low-income families with large numbers of children, etc. 19 According to Sandmo (1995), the welfare state can be viewed from two perspectives: (1) the welfare state refers to the part of the public sector that deals with redistribution through social security and the provision of social benefits that have a strong redistributive function, such as education and health; (2) it describes broadly a country’s economic and social policies that prioritize the reduction of inequalities and the protection of the individual against social risks such as job loss or illness.20
The next chapter contains a short overview of different types of welfare states and how they define and organize the supply of public and common goods and services.
15 Encyclopedia Britannica (10.10.2020)
16 Ware, A., Goodin, R. E., 1990
17 Boundless Political Science (5.10.2020)
18 Esping-Andersen, G., 1999
19 Pestieau, P., 2006
20 Sandmo, Agnar., 1995
