Comparative Politics - Course report: "How different are the Spanish and Swedish welfare states?"

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Comparative Politics - Course report: "How different are the Spanish and Swedish welfare states?"

  1. 1. How different are the Swedish and Spanish welfare states?This report shows the differences between welfare states in Spain and Sweden withregard to ideological basis and model, coverage offered to citizens and relativepublic expenditure. This report briefly analyses the welfare system model thatapplies to both countries, taking the typology designed by Gøsta Esping-Andersenas a reference. The report also pays attention to two components of the welfarestate: the health care system and the expenditure on social benefits and itseffectiveness on reducing at-risk poverty, as an appropriate measure to assessperformance of both welfare systems. Key words Welfare state – public expenditure – Spain – Sweden – welfare system model – social benefits – health care systemCarlos Palomo Lario1carlosp.l.91@gmail.comwww.linkedin.com/in/carlospalomolarioE-magazine: www.scoop.it/t/welfare-states-spain-aand-sweden This report has been prepared for
  2. 2. HOW DIFFERENT ARE THE SWEDISH AND SPANISH WELFARE STATES? By Carlos PalomoThis article will be useful for the client because it offers an overview of the welfare system inSpain and Sweden that enables to know some of the most important features of both cases,particularly in the area of social benefits, where important data on public expenditure areprovided. Moreover, data on the effectiveness of social transfers at reducing at-risk poverty,which can be considered one of the most accurate measures to assess the quality of a welfarestate, are included. In addition, the client can also find qualitative information referred towhich model of welfare regime each country corresponds to and referred to the health caresystem of both countries. In brief, this article tries to offer a short but comprehensiveintroduction to some of the most important elements that comprise any welfare state.Ideological basis and welfare system modelAccording to Gøsta Esping Andersen’s (1993 citated in Pérez Nieto, 2005: 22) classictypologies of welfare state, the Swedish one belongs to the «social democratic» or«Scandinavian» model. The underlying aim of this model is to build a universal network ofservices with regard to citizenship (universal coverage by the public system), with standardstending to optimum quality rather than minimum and trying to avoid state-markets conflictsand tensions between social classes. The focus is on providing high-quality publicequalitarian services to every person, within a supportive and redistributive system.Moreover, the Swedish welfare state shows commitment to sustained full employment formen and women (Esping-Andersen, 1993: 285). However, the idea of the Swedish state asuniversal provider can be challenged due to reforms in the last two decades.Spain was not included in Esping-Andersen’s original typologies, but in the mid-90s scholarsstarted to pay more attention to it and considered this country as part of a new model: theMediterranean welfare state. Countries belonging to this model are considered anunderdeveloped form of the conservative-corporatist model, whose aim is at reducing socialdifferences up to an acceptable minimum but not trying to eliminate them (Pérez Nieto, 2005:22). Spain has a model that combines universal services (education and health care) withsocial insurance-based services together with a great importance given to the family asservices provider as a result of the believe that they are self-sufficient to take care of theirmembers (Moreno and Bruquetas, 2011: 26-27) and as result of the underfunding of socialservices.Health careThe Swedish health care system has a «cradle to grave approach» (Hort, 2008: 435): healthattention covers children before they are born and old people until their death. For mothers orfuture mothers, the public system offers sexual health guidance, prevention centres, parentaleducation and regular check-ups of expectant mothers. All these services are free of chargeduring the whole pregnancy (Hort, 2008: 435). For children and youngsters up to twenty yearsold, full public medical attention is provided at no direct cost. Every adult has the right of freedentist and general practitioner choice, notwithstanding the limited choice in sparselypopulated areas. For adults, the system is also heavily subsidised with public funds. However,they have to pay a fee to use all services. Managed by the county councils with a high degreeof independence, hospitals have among them a competition-cooperation relation. Togetherwith the public system, there are also publicly subsidised private practitioners (Hort, 2008:436). Swedish citizens, EU citizens and people from countries with agreements with Swedenare entitled to use the Swedish public health care system.In the case of Spain, universal health care is paid with funds taken from taxes and no directco-payment is required for users except for medicines, prostheses and other services, but thegeneral idea is that health care is free. The coverage used to be almost universal for residents [2]
  3. 3. HOW DIFFERENT ARE THE SWEDISH AND SPANISH WELFARE STATES? By Carlos Palomoin Spain in equal conditions, but recent reforms have limited this situation. Since the 90s andmainly in the 2000s, private management has increased in public services and«mercantilisation» has grown due to the withdrawal of medicines from the public healthsystem. Both strategies were aimed at reducing the high structural deficit of the health caresystem (Villota Gil-Escoin and Vázquez, 2008: 176). These strategies have also beenimplemented «to balance the universal right to health with the economic interests of theprivate sector» (Villota Gil-Escoin and Vázquez, 2008: 178).In the EU15 context, Spain and Sweden are in the ends when talking about copayment inhealth care public services. In Spain, there is copayment mainly in medicines, whereasgeneral practice, consultancy attention, hospital attention and emergencies are free of directcharge: they are paid through taxes. On the opposite, Sweden has the copayment system in allthe health care services, regardless of the voluntary decision of the patient to use the services(general practice, emergencies, and medicines) or not (hospital attention and consultancyattention). So, Swedish system aims at collecting money and discouraging potential patientsto use health services, whereas the Spanish one offers an open and almost free attention(Cirera, Mas and Viñolas, 2011).If we look at total expenditure on health care as percentage of GDP (OCDE, 2012), Spainexpended an average of 8.9% of its GDP in health care between 2004 and 2010, whereasSweden expended an average of 9.3 %. There is a slight difference, but the underlying trend ismuch more interesting, as in 2004 Spain expended 8.2% and Sweden 9.1% of their respectiveGDP in health. Six years later, in 2010, both countries expended the same: 9.6 % of theirGDP. Therefore, Spain has made a bigger effort to equalise expenditure on health. However,with regard to the percentage of public expenditure over total expenditure on health(OCDE, 2012), between 2004 and 2010 the average of the analysed years is 72.4 % in thecase of Spain, whereas the Swedish one is higher: 81.3 %. These percentages of publicexpenditure are translated into an average public per capita expenditure between 2004 and2010 (OCDE, 2012) of US$ 1,952.6 expressed in purchasing power parity (PPP) in the caseof Spain and US$ PPP 2,748.8 in the case of Sweden. Figures are clear: Sweden invested inpublic health care roughly US$ PPP 800 per person on average more than Spain in theanalysed years.Social benefitsSpain expended an average of 21.82 % of its GDP on social protection (Eurostat, 2012)between 2005 and 2009 and Sweden expended an average percentage of 30.43 in the same 1years. If we look at which functions expenditure on social benefits is dedicated to(Eurostat, 2012), we see that Spain, between 2005 and 2009, expended an average of 7.4% indisability whereas Sweden expended more than double: 14.9%. In both cases, respectiveexpenditure is roughly constant in all the years. In old age, Spain expended in the same yearsan average of 32.2% of social benefits, whereas Sweden expended an average of 38.7% ofsocial benefits. The percentage of social benefits dedicated to families and children between2005 and 2009 ranged between an average of 6.1% in Spain to an average of 10% in Sweden.This small difference must be highlighted, as Sweden is considered a much more family-supportive country. With regard to housing, Spain invested an average of 0.86% of socialbenefits; Sweden invested an average of 1.6%, two times more than Spain. In social1 Social benefits consist of transfers, in cash or in kind, by social protection schemes to households andindividuals to relieve them of the burden of a defined set of risks or needs. The functions (or risks) are:sickness/healthcare, disability, old age, survivors, family/children, unemployment, housing, social exclusion notelsewhere classified (n.e.c). Within social protection, apart from social benefits, administration costs andmiscellaneous expenditure by social protection schemes (payment of property income and other) are included. [3]
  4. 4. HOW DIFFERENT ARE THE SWEDISH AND SPANISH WELFARE STATES? By Carlos Palomoexclusion, the Mediterranean country invested between 2005 and 2009 an average of 0.9% ofsocial benefits, whereas Sweden invested, on average, 2.1% of social benefits.The average share of people at-risk poverty2 before social transfers between 2005 and2011 was 25.45% in Spain and 27.8% in Sweden. As we can see, surprisingly, in Sweden theshare is bigger although the country is richer. However, the situation changes considerablyafter social transfers, as they reduce poverty in Spain by 17.75% on average, whichrepresents an average of 20.1% of people below the threshold of poverty, whereas Swedenreduces the share of people at-risk poverty by an average of 56.48%, which represents 12,1%of its inhabitants under the poverty threshold, a great difference with the situation prior tosocial transfers. To sum up, social transfers effectiveness is much higher in Sweden and,therefore, more efficient. Although the Nordic country continues to be one of the countries inthe world with the lowest income inequality (the Gini coefficient is 0.24, lower than the richworld average of 0.31), this indicator has increased over the last few years 3. With regard toSpain, the Gini coefficient in the late 2000s was 0.3174.ConclusionsGiven the previous exposition, I conclude that the hypothesis is partly verified. The welfareregime models are considered by scholars very different with regard to their ideological basisand their focus on services to citizens. Hence, the hypothesis related to this aspect is verified.When talking about health care, qualitative differences are not so easy to see in the presentedinformation. The only one I consider is clear enough to remark is the difference in co-payment: access to attention is easier in Spain and, hence, better for users. However, there isnot sufficient information in this work to verify or refute the hypothesis. Further research isnecessary. Regarding public expenditure on health care, the situation is the opposite: Iconsider that public expenditure is quite different in both countries in terms of percentage ofpublic expenditure and per capita public expenditure. So, the hypothesis related to thisconcrete variable is verified.Finally, data from expenditure on social benefits also show an important gap in the percentagededicated to this matter. However, it is not as big as initially expected. Moreover, there is agreater difference in social transfer effectiveness in reducing at-risk poverty: Sweden is muchmore effective. Therefore, with regard to this aspect, the hypothesis is clearly verified.However, no qualitative differences related to coverage can be concluded.Overall, it is important to note that, in order to have a more detailed picture of both welfaresystems, further research is necessary, and this work can be useful as a starting point for thataim.References2 Eurostat describes this at-risk poverty rate as the share of persons with an equivalised disposable income belowthe risk-of-poverty threshold, which is set at 60 % of the national median equivalised disposable income.3 The new model, The Economist, October 13 th 2012 (online):http://www.economist.com/node/21564412?fsrc=scn/tw_ec/the_new_model [check: 4th November 2012].4 Income distribution-inequality, OECD (online): http://stats.oecd.org/Index.aspx?DataSetCode=INEQUALITY[consultation: 24th November 2012]. [4]
  5. 5. HOW DIFFERENT ARE THE SWEDISH AND SPANISH WELFARE STATES? By Carlos PalomoHort, S. (2009), «The Swedish welfare state: A model in constant flux» in The Handbook ofEuropean Welfare States, eds. Klaus Schubert, Simon Hegelich and Ursula Bazant, London,New York: RoutledgeVillota Gil-Escoin. P. and Vázquez, S. (2009), «The welfare state in Spain: Unfinishedbusiness» in The Handbook of European Welfare States, eds. Klaus Schubert, SimonHegelich and Ursula Bazant, London, New York: RoutledgeMas, N., Cirera, L. and Viñolas, G. (2011), «Los sistemas de copago en Europa, EstadosUnidos y Canadá: implicaciones para el caso español», Documento de Investigación DI-939,Public-Private Research Center, IESE Business School, 1-22 (online): thhttp://www.iese.edu/research/pdfs/DI-0939.pdf [last check: 24 November 2012].Pérez Nieto, E. (2005), «El estado del bienestar y las políticas públicas» in Análisis dePolíticas Públicas, ed. Margarita Pérez Sánchez, Granada: Editorial Universidad de Granada.Moreno Fuentes, F. J. and Bruquetas Callejo, M. (2011), Inmigración y Estado de bienestaren España, Barcelona: Obra Social “la Caixa”.Esping-Andersen, G. (1993), Los tres mundos del Estado del bienestar, Valencia: EdicionsAlfons el Magnànim.«Sweden: The new model», The Economist, 13th October 2012 (online):http://www.economist.com/node/21564412?fsrc=scn/tw_ec/the_new_model [consultation: 4thNovember 2012].Eurostat [last check: 29th November 2012]. - Expenditure on social protection (% of the GDP) (online): http://ow.ly/fHdwX - Social benefits by function (% of social benefits): http://ow.ly/fHdCL - At-risk-poverty rate before social transfers by sex: http://alturl.com/vuqpf - At-risk poverty rate after social transfers by sex: http://alturl.com/gju8pOECD Health Data 2012 – Frequently Requested Data (online): http://ow.ly/fHf1H [lastcheck: 29th November 2012]. - Total expenditure on health, % gross domestic product. - Public expenditure on health/capita, US$ purchasing power parity. - Public expenditure on health, % total expenditure on health.OECD, Income distribution-inequality, (online): thhttp://stats.oecd.org/Index.aspx?DataSetCode=INEQUALITY [last check: 24 November2012]. [5]

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