The advantages and disadvantages of different social welfare strategies

This paper presents a framework for consideration of change in or reform of social welfare systems. The author describes characteristics of the approaches to providing social welfare most commonly used in North America and western Europe. These include social insurance, employer mandates, individual mandates, voluntary arrangements (tax expenditures), means‐tested programmes, and universal programmes (demogrants). He then evaluates each of the approaches in terms of its ability to achieve a set of social and economic objectives. The social protection objectives include treating people with dignity and respect, assuring complete coverage, equitably distributing costs and benefits, and operating efficiently to lower overhead. The objectives important to promoting a healthy economic environment include encouraging individual saving and work effort, fostering government fiscal responsibility, and facilitating smooth market functioning. The author concludes that there is no one correct way to organize social welfare systems, that each approach has strengths and weaknesses, and that different societies will attach different priorities to different objectives. Thus, as social goals change, we may expect that the particular mix of approaches used will also evolve and change over time.