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Towards more comprehensive measures of social support: adding in the impact of taxes and private Spending or netting out the impact of politics on redistribution?

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  • Castles, Francis G.
  • Obinger, Herbert

Abstract

This paper offers a critique and analysis of recent OECD research by Adema and Ladaique identifying the impact of taxes and private benefits on social spending. Using the techniques of multivariate modelling, we show that both gross public and net private expenditures are strongly influenced by partisan incumbency, although in opposite directions, and that the more we net out the effect of taxes, the less politics matters and the more spending is shaped by economic forces. In a second stage of the analysis, we show that the crucial mechanism of welfare state redistribution is the taxation of gross social expenditure and demonstrate that this effect is almost entirely political in nature.

Suggested Citation

  • Castles, Francis G. & Obinger, Herbert, 2006. "Towards more comprehensive measures of social support: adding in the impact of taxes and private Spending or netting out the impact of politics on redistribution?," Working papers of the ZeS 04/2006, University of Bremen, Centre for Social Policy Research (ZeS).
    • Handle: RePEc:zbw:zeswps:042006
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    References listed on IDEAS

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    1. Tanzi,Vito & Schuknecht,Ludger, 2000. "Public Spending in the 20th Century," Cambridge Books, Cambridge University Press, number 9780521662918, January.
    2. Joakim Palme & Walter Korpi, 1998. "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries," LIS Working papers 174, LIS Cross-National Data Center in Luxembourg.
    3. Bo Rothstein, 2001. "The Universal Welfare State As A Social Dilemma," Rationality and Society, , vol. 13(2), pages 213-233, May.
    4. Willem Adema & Maxime Ladaique, 2005. "Net Social Expenditure, 2005 Edition: More Comprehensive Measures of Social Support," OECD Social, Employment and Migration Working Papers 29, OECD Publishing.
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