Introduction
In the last half century, a considerable amount of research has been conducted by political scientists on the factors that impact the development of welfare states. However, comparatively little has been written on the effect of ethnic diversity on the provision of public goods, and researchers who have conducted work on the subject have found mixed results (Hjerm and Schnabel, 2012). There are various reasons to suspect that ethnic diversity may have a negative impact on welfare state generosity. In democracies, popular enthusiasm for economic redistribution may be dampened if poverty is associated with an ethnic minority (Soss and Sanford, 2007). Skilled political entrepreneurs may be able to take advantage of the economic anxieties and prejudices of the majority of the population to convince them to vote for political parties that promote free markets and small government through a process called ethnic outbidding. Furthermore, the different social, political, and economic preferences of ethnic groups may create problems with collective action (Alesina, Baqir, and Easterly, 1999). Consequently, legislatures in more diverse countries may have a more difficult time passing laws and increasing redistributive spending. Additionally, discrimination by law makers and bureaucrats against impoverished ethnic minorities in both the policy making and policy implementation process may lead to less spending on welfare (Schram, et al., 2009; Schram, et al., 2011). In authoritarian regimes, dictators can also use the uneven distribution of public goods to different ethnic groups as way to divide and weaken the opposition (Wood and Gough, 2006). As a result, more salient ethnic cleavages in dictatorships may lead to less spending on public goods. Nevertheless, in spite of the various mechanisms that can potentially link social cleavages to the size of the welfare state, many of the scholars who have conducted quantitative studies on the subject either found null results or a very weak relationship between the variables. Some scholars have ignored ethnicity all together. Why is this a neglected a topic? Furthermore, why have the studies that have been conducted on the subject found mixed results?
As will be shown, social cleavages can affect welfare distribution but only within certain contexts. Salient social cleavages intensified by political, economic, and social inequality between groups are more likely to have an impact on the size of the welfare state than cleavages that are not politicized (Steele, 2016). Diversity on its own is not necessarily an impediment to collective action. Furthermore, a review of the literature also shows that there is a considerable bias among comparative scholars towards focusing on welfare states in the developed world: specifically, Europe and East Asia. Most of the countries in these regions of the world have relatively homogeneous populations and a lack of the right type of social cleavages that could potentially have a negative impact on the development of welfare states (Alesina and Glaeser, 2004). Since these states consist of the vast majority of developed countries, there is a bias against studying the effect of social cleavages on welfare. One of the few developed countries with the right type of salient social cleavages that can potentially affect welfare state distribution is the United States; not coincidently, the bulk of the studies on this issue have been conducted by American political scientists. Studies on countries in the developing world such as Jordan (Baylouney, 2008), Syria (Eibl, 2016), Turkey (Yoruk, 2012), Kenya (Miguel and Gugerty, 2004), and Uganda (Habyarimana, Humphreys, Posner, and Weinstein, 2007) have also shown that social cleavages can negatively impact welfare distribution in certain contexts.
In this paper, I will first provide an overview of theories on the formation and size of welfare state that emerged from the work of comparative scholars who focused on countries in the developed world. As will be shown, these studies ignored social cleavages and focused on other political, economic, and social variables due to the nature of the countries they were studying. Then, I will analyze the origins of scholarly work on the effect of ethnic cleavages on welfare spending in the United States, whose relatively unique demographics compared with other developed countries paved the way for studies on this subject. American political scientists introduced new statistical innovations that have enabled comparativists to analyze the impact of ethnic diversity on welfare state provision in large-n quantitative studies. Afterwards, I will analyze comparative studies that built on the work of American political scientists and have examined the effect of ethnic diversity across many countries in the developing world using new statistical innovations. While some of these works showed that ethnic diversity negatively effects spending on the welfare state and public goods in general, other studies have found null results. Finally, I will analyze scholarly work that have attempted to explain the reasons why ethnic diversity has inconsistent effects on public spending. As will be shown, the impact of ethnic diversity on welfare provision is highly dependent on the saliency of the ethnic cleavage and the nature of a country’s political institutions.
Theories on the Formation and Size of Welfare States
Before reviewing different theories on the welfare state, it is important to first define the concept. According to Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding in their book Wealth and Welfare States:
All wealthy nations, including the United States, are welfare states—that is, they are primarily capitalist states with large, selective doses of socialism. What has been socialized are institutions that reduce economic insecurity. By its nature, capitalism produced too much economic insecurity. A hall-mark objective of welfare state institutions is, therefore, to reduce economic insecurity. Education, health, and some forms of insurance all reduce economic insecurity. (Garfinkel, Rainwater, and Smeeding, 2)
While welfare states are generally found in wealthier nations, there is a high degree of variance in their scope and generosity. Furthermore, there are a great diversity of independent variables that can influence the development of the welfare state. To test theories that explain the divergence in public spending, comparative scholars from the 1970’s to the 2000’s collected data on welfare states—mainly countries in Western Europe and North America—and conducted regression analyses. The factors that impact the development of a welfare state can be broken down into economic, political, cultural, and international variables.
The impact of economics on the welfare state is one of the most commonly studied variables. According to Geof Wood and Ian Gough, public social spending on health, retirement pensions, unemployment insurance, family benefits, and education are expensive and require a certain level of domestic economic production before it becomes possible to pay for these benefits (Wood and Gough, 2006). Welfare states have their origins in Western European countries primarily because these they were the first to industrialize and urbanize. The wealth that was created from the industrial revolution provided states with the ability to obtain a greater amount of tax revenue to pay for these programs. Furthermore, industrial development also provides incentives for the government to invest in the welfare of their citizens. Investments in education and health lead to higher productivity, which in turn leads to higher economic growth. Welfare states can also be used to bolster political stability during an economic crisis. According to the political scientist David Cameron, the economic instability created by the booms and busts of capitalist markets and exposure to the fluctuating prices of goods that are traded internationally create a further incentive to establish a welfare state (Cameron, 1978). During economic downturns, the government can use spending on unemployment and family benefits to prevent protests and keep people out of poverty until the recession ends. This is why welfare state expansion usually does not take place during an economic boom but during times of economic insecurity when protests from below lead to governments making reforms (Piven and Cloward, 1971).
While welfare states first emerged in the West partially as a result of industrialization in the late nineteenth century, they later spread to different parts of the developing world as their economies developed throughout the second half of the twentieth century. Despite the claims of scholars like Garfinkel, Rainwater, and Smeeding, welfare states are not purely reserved for the wealthiest countries in the world. Most countries in East and South East Asia, Latin America, and the Middle East have developed welfare states although usually with less generous benefits than what is found in the West (Wood and Gough, 2006). In situations where resources are scarce, states may decide to limit the distribution of goods to groups that are seen as being potentially more loyal to the regime. This is referred to by Wood and Gough as a corporatist welfare state. Very poor countries that are dependent on agriculture and natural resources, such as the case in many countries in Sub-Saharan African, lack the necessary level economic development to afford welfare states and are highly dependent on foreign aid to provide basic services to their citizens.
While economic development makes welfare states possible, there is still considerable variation in welfare spending among countries with similar GDP per capita. Economics alone cannot explain all of this variation. Political factors can either hinder or enable spending on welfare. One of those political variables is the strength of interest groups and their influence on the state (Huber and Stephens, 2001). Perhaps with the exception of spending on education, businessmen and other professions in the middle and upper class have far less interest in investing in the welfare state in comparison with the working class. Interest groups representing these wealthy groups are more likely to promote free market enterprise, low taxes, and small government. In contrast, socialist parties representing labor unions and the working class are far more likely to promote pro-welfare state policies. If left wing political parties and labor unions exert a greater influence on the government, the state is more likely to spend more money on social welfare policies. Evelyne Huber and John D. Stephens, in their book Development and Crisis of the Welfare State: Parties and Policies in Global Markets, prove that there exists a correlation between periods of left-wing government over the last half century and the size of welfare states throughout Western and Central Europe. Countries in Scandinavia, which were dominated for long periods of time by Social-Democratic parties from the 1950’s to the 1980’s, developed the most robust welfare states in Europe with the most generous benefits. In contrast, Great Britain, which has been more heavily influenced by liberal political interests, spends far less on its welfare state.
Differences in regime type can also affect the development of welfare states (Wood and Gough, 2006; Haggard and Kaufman, 2008). In democratic states, the establishment of welfare programs and labor regulations often have their origins in protest movements organized by labor unions and the political activity of left-wing political parties who mobilize voters and enact changes in democratically elected assemblies. Welfare states are thus a product of social movements from below. Benefits tend to be distributed relatively evenly across the population. In contrast, authoritarian governments are more likely to invest in the carceral state—police, the military, and the prison system—rather than solving social disputes through public social spending. Furthermore, when authoritarian regimes do invest in welfare, it is often to co-opt different groups to remain loyal to the regime. Benefits are usually distributed asymmetrically to some groups in society while excluding others. There are exceptions to the rule. According to Stephen Haggard and Robert Kaufman, in the book Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe, authoritarian systems that were communist or socialist gained their legitimacy by redistributing land and wealth to the working class (Haggard and Kaufman, 2008). Authoritarian regimes in Eastern Europe during the Cold War provided universal health, education, and employment for their citizens, although the quality of health and educational services was much weaker than in the Western welfare states. Overall, democratic states spend more on welfare on average than authoritarian states.
Long term cultural trends can also influence attitudes towards welfare spending, political institutions, and interest groups. Cultures that emphasize individualism, self-interest, and free markets are less likely to support economic redistribution than cultures that emphasize communal solidarity, public interest, and coordinated markets (Lipset, 1996). For example, Seymour Lipset claims that the origins of America’s relatively weak welfare state is a byproduct of a liberal consensus that has dominated the culture since its founding. This consensus is based on pluralistic democracy, the Protestant ethic, and capitalism. Advocates of this theory believe that America never had an aristocracy or a church hierarchy in its history since the country was founded by middle class immigrants that left Europe for economic opportunities. Without an upper class to overthrow and with abundant land available, Americans never developed class consciousness. There was no need for the same type of collective action and worker solidarity to expand the vote to white males. As a result, socialism never gained a strong footing on American soil. In comparison, states in Europe have long feudal histories, and class solidarity and social protest was required to overthrow states where monarchies, aristocracies, and the hierarchal church organizations had privileged positions. This is exemplified in revolutions that took place in France in 1789 and Russia in 1917. Consequently, continental Europe developed a culture that had a more positive attitude towards unions and welfare redistribution that the United States.
Along with the economic, political, and cultural factors noted above, the international community can also affect welfare state development. The spread of welfare state policies can happen as a result of cultural diffusion as publics and governments become aware of policy innovations in other states (Dolowitz and Marsh, 2000). Furthermore, international institutions and powerful governments can persuade or pressure weaker governments to enact reforms that positively or negatively affect the welfare state. For example, the International Monetary Fund has often pressured countries struggling with debt to make cuts to public spending to balance the budget (Marsh and Sharman, 2009). Additionally, some scholars have argued that an increase in international trade will lead to greater spending on welfare programs. Greater exposure to the international market place means greater economic instability, which may lead to governments increasing the size of the welfare state to deal with the flux in international prices (Cameron, 1978). In contrast, other scholars have argued that an increase in international trade will lead to a smaller welfare state (Jensen and Lindstadt, 2012). Globalization has increased the power of corporations to take their businesses abroad to take advantage of cheap labor, which may have created a race to the bottom as countries seek to attract companies to their shores with lower tax rates and looser regulations. Globalization may explain why many Western countries have made cuts to their welfare states since the 1980’s.
While the studies cited above contributed greatly to our understanding of the welfare state, what most of them have in common is that they neglected to discuss the role of ethnicity on the distribution of public goods. Until the late 1990’s, it was a neglected topic (Alesina and Glaesar, 2004). However, statistical innovations by American political scientists have since enabled comparative scholars to study the effect of ethnicity on public spending across countries.
American Political Science: Analyzing the Effect of Ethnic Diversity on the Welfare State
The first studies on the effect of ethnic diversity on welfare state expansion were conducted mainly by American political scientists. There were a variety of reasons for this. By the late nineteenth and twentieth century, most European states were relatively homogenous and had developed strong national identities backed by a common language, religion, and national culture (Alesina and Glaesar, 2004). These national identities were a product of several centuries of inter-state warfare and state building on the European continent. Societal cleavages over economic redistribution and the expansion of the welfare state tended to be based on class and not ethnicity. In contrast, the United States developed a multi-cultural identity due to years of migration—voluntary and forced--from different parts of the globe. Consequently, the United States had substantial African American, European Catholic and Latino minorities that were substantially poorer than the White Protestant European majority. The issues of race and language were fundamentally tied into questions of economic redistribution in American politics.
One of the first American studies on ethnicity and its impact on the welfare state in America was the 1971 book Regulating the Poor: The Functions of Public Welfareby Frances Fox Piven and Richard Cloward (Piven and Cloward, 1971). In the book, the authors contradict what was a widely held view that welfare programs were established due to left wing shifts in ideology and the moral need to help the poor during depressed economic conditions. Instead, Piven and Cloward argue that welfare states are established as a response by the wealthy elite to regime threatening protests from social forces below. To demobilize protestors, the state will increase welfare benefits, but they will retract those benefits once the protests die down. To test the theory, they analyzed the two major episodes of welfare state expansion in the United States: Franklin Roosevelt’s New Deal (1933-37) and Lyndon Johnson’s Great Society programs (1964-68). During the Great Depression in the 1930’s, the US federal government created Social Security, unemployment insurance, and poverty relief programs for the first time, taking on a role once played by local governments and private charity networks. FDR’s government did this not because of the poverty created by the Great Depression but the growth of urban social protest and the rise of radical left-wing movements. Welfare benefits though were specifically targeted at white urban communities as blacks in rural communities in the Jim Crow South were systematically discriminated against and lacked the resources to mobilize. Farmers and domestic servants were excluded from the Social Security roles. Using primary documents, Piven and Cloward also show how white welfare case workers found creative ways to exclude blacks who should have qualified for benefits but were kept off the welfare rolls anyway. Following the decline of protests in the late 1930’s, many of the poverty and work relief programs established by the New Deal were cut back.
The second case of welfare state expansion in American history, which took place in the 1960’s, was precipitated by the migration of Southern Blacks from the Jim Crow South to cities in the North East and West coast in the 1940’s and 1950’s. With their jobs as farmers replaced by modern machinery, rural blacks were forced to migrate to northern cities, which led to the rise of poverty in urban centers throughout the country and the rise in the number of protests among urban blacks. This political unrest was tied into the Civil Rights movements. With greater access to resources in cities, black communities throughout the country were able to exert more pressure on the state. To deal with the growing power of black voters, Lyndon Johnson’s administration passed a series of reforms that enabled urban black communities to gain greater access to federal welfare services, which included public housing, food stamps, and Aid for Impoverished Families with Dependent Children. These reforms coincided with the passing of the Civil Rights act of 1964 and the Voting Rights Act of 1965 as well as the creation of Medicare and Medicaid, which provided access to public healthcare for the elderly and the poor. From 1964 to 1968, the welfare rolls for the Aid for Families with Dependent Children program rose as did the number of people with access to public housing. The rise in the number of blacks on welfare though created a backlash against the welfare state among the majority of whites. After 1968 when protests died down in the black community, welfare benefits were subsequently retrenched.
While qualitative and inductive historical works like Piven’s and Cloward’s book established the idea that ethnic diversity can potentially have a negative impact on welfare distribution, cross-national quantitative works were not conducted to test the theory until the late 1990’s due to data limitations. One of the pioneering studies on the subject was conducted by Alberto Alesina, Reza Baqir and William Easterly in the article “Public Goods and Ethnic Divisions.” (Alesina, Baqir, and Easterly, 1999). In the article, the authors analyze the reasons why some local governments in the United States spend more on public goods provision than others. They contribute to the literature by showing that ethnic diversity has a negative effect on public goods provision. They theorize that different ethnic groups may have different preferences, which will potentially create more gridlock in the legislature. Furthermore, they argue that the ethnic majority may be less likely to support the distribution of resources to the poor through welfare spending if the poor are associated with minorities. This leads to a phenomenon that the authors call welfare chauvinism. To test this theory, the authors analyzed the effect of ethnic diversity on public spending on education, sewage systems, roads, health, trash disposal, health, and policing in US cities, metropolitan areas, and urban counties in the year 1990. To measure ethnic diversity, they used the ethno-fractionalization index, a dataset that had been recently created by Alberto Alesina. The index calculated the chances that two random individuals chosen from a population were of a different ethnicity—by ethnicity, they specifically mean linguistic, religious, and racial groups. In the study, they control for variables that can also impact spending such as the city’s GDP per capita, the size of the city, the level of education, average age, and income inequality. They also control for other factors that can affect the public budget like deficit spending, overall debt, and intergovernmental transfers. As predicted, ethnic diversity had a negative impact on spending on education, roads, sewer, and trash pickup, and it had a positive effect on police spending, deficit spending, and the debt.After the publication of this study, numerous American scholars have used quantitative methods to show that greater racial diversity at the local and state level has negatively impacted the amount of government spending on welfare and other public goods.
Scholars also began to use quantitative methods to compare the American welfare state with countries in Western Europe and analyze the impact of ethnic diversity on the size of welfare states across countries. Alberto Alesina and Edward Glaeser, in the book Fighting Poverty in the US and Europe: A World of Difference, analyze the following research question: why do states in Western Europe have more extensive welfare states than America? (Alesina and Glaeser, 2004) Alesina and Glaeser argue that the past scholars who have approached this question have failed to back their conclusions with empirical evidence. In the past, numerous scholars have theorized that the US may have a weaker welfare state because the country has more economic mobility, is less efficient at collecting taxes, and is less exposed to external shocks from the international marketplace than smaller European countries. However, Alesina and Glaeser use OECD data to show that the US is not more economically mobile than European countries, does not have more problems than Europe in terms of collecting taxes, and actually has an economy that has more booms and busts that Western European states since its political economy is more liberal. Instead, Alesina and Glaeser argue that two interconnected variables explain the disparity in welfare spending between the United States and Europe: the structure of institutions and ethnicity.
According to Alesina and Glaeser, institutions that create more veto points such as presidential systems, bicameral houses, and federalism are more likely to decrease welfare spending since it becomes harder to pass legislation and it is easier for minority interests to block reform. In contrast, parliamentary systems, unicameral legislatures, and unitary political systems make passing legislation easier. In parliamentary systems of government found in Western European countries, the powers of the executive and the legislative branch are fused together since the majority of representatives in parliament choose the prime minister. With a relative lack of checks and balances, these types of systems have made it easier for left wing governments to pass welfare reform when they come into power. All they need to do is win one round of parliamentary elections. Once welfare reform is passed, it subsequently becomes difficult to cutback benefits in the future as they become popular with the public. In contrast, presidential systems such as the United States divide power between the executive and legislative branches, which often leads to divided government and gridlock. This partly explains why states in Western and Central Europe spend more on public welfare than the United States and Latin America. Furthermore, Alessina and Glaesar argue that federal political systems are correlated with less spending on welfare than unitary systems. Federal political systems that devolve some powers to local subunits also make it more difficult to increase overall welfare spending since passing reforms has to be done in each locality separately. Additionally, Alesina and Glaeser argue that single member district electoral systems that promote a two-party system make welfare state reforms less likely since they make it more difficult for emerging third parties on the left to gain political support and win seats in the legislature. Proportional electoral systems, which award seats to third parties even if they get a small percentage of the vote, encourage more ideological diversity. While third parties representing the interest of labor began winning seats in parliaments throughout Western Europe in the late nineteenth century, socialist parties in the United States struggled electorally to make any ground politically. Overall, the structure of America’s institutions has benefited the wealthy elite who are in favor of economically liberal policies.
Alesina and Glaesar also argue that salient ethnic cleavages explain much of the variation in welfare spending between the United States and Western Europe. Most Western European countries have relatively homogenous populations, and countries that do have social cleavages such as Switzerland and Belgium are not economically salient. In other words, there are no large wealth gaps between ethnic minorities and majorities in Western European states. In contrast, the history of slavery in the United States and the mass migration of Catholics from Europe and Hispanics from Latin America created a group of ethnic minorities that were substantially poorer than the majority of the population. Prior to the 1960’s, African Americans in the South were systematically discriminated against and kept off of welfare rolls. Since Lyndon Johnson’s expansion of welfare to urban black communities in the 1960’s, right wing politicians have successfully framed welfare programs as the government redistribution of wealth towards underserving ethnic minorities. More importantly, Alesina and Glaesar argue that America’s heterogenous demographics is tied into the structure of its institutions. America’s diversity created ethnic divides between the country’s working class, which significantly weakened the power of labor unions. It also made it relatively easier in America for right wing politicians to divide the working class by race and language. Consequently, political institutions that benefited the country’s capitalist elite did not face significant pressure for reform from social forces below. In Western Europe states, their current democratic institutions came into being as a result of a homogenous working-class protesting for reforms to the electoral system and the structure of political institutions in the late nineteenth and early twentieth century.
To test their theories, Alesina and Glaesar utilized a mixed method approach. For their quantitative analysis, they used OECD data to measure retirement benefits, unemployment insurance, disability benefits, family transfers, and healthcare spending over the course of a half century. They also analyzed laws and regulation that protect workers such as the minimum wage. They compared this data across Western countries with the types of institutions found in each country and the degree of ethnic diversity. They also controlled for variables like GDP per capita. The authors found that institutions explain approximately half of the variation in welfare spending across Western states while ethnic diversity explains the other half. Furthermore, Alesina and Glaesar also conducted a qualitative analysis of each country in the study. They used primary historical documents to connect the structure of institutions and ethnic cleavages to welfare spending. This method of causal process tracing complemented their quantitative approach and showed how ethnic cleavages in the United States directly led to less spending on welfare.
Since the publication of these innovative works, many other American political scientists have found similar conclusions. Several studies have shown that racial diversity in the United States has allowed right wing politicians to frame means tested welfare programs as benefits targeted towards minorities (Soss and Schram, 2001). This has made white Americans less likely to support the redistribution of wealth towards the poor. Past studies on racial resentment and symbolic racism have also shown that white attitudes towards blacks is tied into their perceptions of who benefits disproportionately from welfare policies. While studies show that traditional Jim-Crow style racism has declined in the United States since the 1960’s, the same studies also show that many whites still harbor racial resentment and believe that ethnic minorities are abusing welfare programs and leeching off the state (Bobo, Kluegel, and Smith, 1997; Tarman and Sears, 2005). Other studies have shown that America’s heterogenous culture made it more difficult for the working class to coalesce, which has weakened the ability of America’s labor unions to enact policy change at the federal level (Lieberman, 2003). The consequence of this is that America’s welfare state is more decentralized and fragmented, and the country’s labor unions are weaker politically than those in Western Europe. Other scholars have found that when the design of American welfare policies is decentralized and controlled by local governments, welfare policy tends to involve greater sanctioning of welfare recipients, the distribution of fewer welfare benefits, and more resources spent on policing (Soss, Fording, and Schram, 2008). For example, when the program Aid for Families with Dependent Children (AFDC) was replaced with the more restrictive program Temporary Assistance for Needy Families (TANF) in 1996, control over welfare policy was decentralized to the local level and communities with a higher proportion of minorities saw the creation of more punitive rules and harder access to welfare benefits. While the intent of the program was to increase the efficiency of welfare distribution and punish free riders, it also led to more discrimination against minorities. Furthermore, studies have also shown that when bureaucrats have discretion over the distribution of welfare benefits to families, they are more likely to engage in sanctioning when there are more minorities in their locality (Schram, et al., 2009; Schram, et al., 2011). At least within America’s historical context, ethnic diversity has had a negative effect on the size of the welfare state.
Studies from the Developing World: Finding Mixed Results
While American scholars have created a substantial body of qualitative and quantitative evidence to show that ethnic diversity can have a negative impact on welfare spending, these studies are mired by the problem of external validity. While ethnic diversity in America may have led to less welfare spending in comparison with homogenous Western European states, will this same theory apply to other countries that are also ethnically diverse? In other words, does the United States relatively unique history make it an outlier? Starting in the 2000’s, comparativists began using data sets that measure ethnic diversity to conduct large-n studies on welfare states and public spending. Unlike Alesina’s and Glaeser’s study, many of these studies went beyond Western Europe and the United States. Some scholars have offered evidence that ethnic diversity can have a negative effect on public goods provision; however, other studies found null or weak results.
Several medium and small-n studies revealed that there are countries in the developing world where ethnic diversity has had an impact on the size of the welfare state. For example, Ferdinand Eibl, in the dissertation “Social Dictatorships: The Political Economy of the Welfare State in the Middle East and North Africa,” demonstrates that politicized ethnic cleavages had a negative impact on welfare spending in the Middle East and North Africa (Eibl, 2016). In this work, he analyzes the reasons why spending on the welfare state differs across the following lower middle-income countries (GDP per capita between $3,000-$10,000/year) in the Middle East and North Africa since the 1950’s: Egypt, Iran (pre and post 1979), Jordan, Syria, Morocco, and Tunisia. Among these countries, Tunisia and Iran (post 1979 revolution) have relatively robust welfare states with universal coverage in terms of health care, retirement pensions, and unemployment. In contrast, Morocco, Jordan, and Iran (pre-1979) have relatively weak welfare states with only a minority of the population—mainly public sector workers and military personal--receiving benefits. Egypt and Syria are in the middle of pack in terms of spending on welfare.
Ferdinand Eibl argues that several different variables explain variation across these states. For one, the size of the welfare state is impacted by the nature of the coalition that was formed by the autocrat when the ruling regime came into being following the end of colonization. New regimes that had to make an alliance with labor organizations to establish a base of power, as was the case in Tunisia, Egypt, Syria, and Iran (post 1979), established a more robust welfare state. Regimes that had right wing coalitions upon independence, as was with the case with the monarchies in Morocco, Jordan, and Iran (pre-1979), had far weaker welfare states characterized by the uneven distribution of welfare to military personal and public sector workers. Furthermore, states that had to spend more on their military due to international conflict had less resources to spend on social welfare. In the literature, this is known as the “guns for butter” tradeoff. States like Egypt, Syria, and Jordan spent large percentages of their public budget on their military due to their involvement in the Israeli-Palestinian conflict, and Iran spent large sums on its war with Iraq in the 1980’s. Access to oil rents also had a significant impact on the welfare state. The only one of these countries with significant amounts of petroleum reserves is Iran, and this helped the country offset the expensive costs of military conflict to establish a robust welfare state in the 1980’s following the Islamic Revolution in 1979. Finally, salient social cleavages also explain some of the variation among these welfare states. When dictators rule over states with salient ethnic cleavages, they can play those ethnic groups against each other through the strategy of divide and conquer. Consequently, dictators can distribute less resources to ethnic groups outside the ruling coalition but still maintain their base of power. In the case of Syria, the ruling Alawite coalition—approximately 15 percent of the country’s population—receives a disproportionate share of public resources in comparison with the country’s Sunni Muslim majority. In Jordan, the country’s Palestinian migrants, which are now approximately half of the population, are systematically discriminated against by the state while those descended from tribes that live to the East of the Jordan river receive a disproportionate share of welfare benefits and jobs in the public sector. In contrast, a state like Tunisia is ethnically homogenous, and its working class is not divided by religion, race, or language. To test each of his theories, Ferdinand Eibl uses an impressive mix of quantitative and qualitative evidence. Using data from the International Monetary Fund, he conducted a quantitative analysis of these countries from 1960 to 2015. Controlling for a large number of socioeconomic and political variables, he showed how the ideological nature of ruling coalitions, the amount of spending on the military, the amount of oil reserves, and the presence of salient ethnic cleavages each had a statistically significant impact on the size of their welfare states. He complemented this data analysis with an historical comparison of each of these case studies.
There are many other examples of researchers who have found a correlation between ethnic cleavages and spending on welfare states and public spending in the developing world. James Habyarimana, Macartan Humphreys, Daniel Posner, and Jeremy Weinstein, in a series of experiments conducted in the capital of Uganda, found that individuals that are co-ethnics are better able to cooperate in the distribution of public goods to the community since co-ethnics are better able to engage in collective action (Habyarimana, Humphreys, Posner, and Weinstein, 2007). Co-ethnics have more tightly knit communities based on trust between individuals, and individuals within these communities can better monitor and sanction free riders. In another example, Erdem Yoruk, in the article "Shifting forms of Turkish State Paternalism toward the Kurds: Social Assistance as Benevolent Control," demonstrates how the Turkish state discriminated against its Kurdish minority throughout the twentieth century (Yoruk, 2012). Even when the Turkish state began to distribute more public resources to Kurdish communities in the 2000’s, it did so unevenly and in an authoritarian manner as a means to maintain social control. Local communities in Kurdistan were denied local autonomy over their own resources. Overall, Kurdistan still receives a disproportionally smaller share of public resources than the rest of Turkey. There are many other case examples of countries with salient ethnic cleavages that have witnessed conflict over the asymmetrical distribution of resources (Horowitz, 1985).
While many small and medium-n have found that ethnic diversity impacts the distribution of welfare in different parts of the developing world, many quantitative large-n studies have found mixed or null results. For example, Eric Kramon and Daniel Posner, in the article “Who Benefits from Distributive Politics? How the Outcome One Studies Affects the Answer One Gets,” claim in their literature review that past large-n studies on the effect of ethnic diversity on the distribution of public goods have produced mixed results (Kramon and Posner, 2013) They argue that the results of a quantitative analysis is impacted by the way one measures public goods. To test this theory, the authors compared six different countries in Sub Saharan Africa. To analyze the impact of ethnicity on public goods provision, they looked at which ethnic group controlled the presidency. To compare access to public goods across ethnic groups, they compared each communities access to medical care, education, water, and electricity. They measured this by looking at infant mortality, average years of schooling, average access to water, and average access to electricity. Utilizing a quasi-experimental difference-in-difference design, they analyzed how access to these goods for each community changed when a president from a different ethnic group came into power. If the theory that ethnicity affects the distribution of public goods is true, we should expect that ethnic groups will benefit more when a president from their ethnicity comes into power. The authors find that the results of the analysis change depending on what public good is measured. With some public goods, the ethnicity of the president has an impact but with other goods it does not. There are also different results across countries. Unfortunately, the authors in this do not attempt to give an explanation for why there are mixed results or why there are differences across countries.
Many other quantitative studies have found that ethnic diversity has no impact or a mixed impact on the welfare state and public goods provision (Baldwin and Huber, 2010; Steele, 2016; Miguel and Gugerty, 2016). Why were scholars achieving mixed results in their quantitative studies despite the large amount of qualitative evidence that ethnic diversity has impacted the distribution of welfare in many case studies?
Explanations for Mixed Results: Analyzing the Saliency of Ethnic Cleavages
Beginning in the late 2000’s, scholars began shifting their focus to understanding why the impact of ethnic diversity on the welfare state differed from one country to another. As opposed to seeing ethnic cleavages as being similar across all states, these scholars approached the subject with the understanding that ethnic divides across countries can differ in terms of their saliency; in other words, larger political, economic, and cultural gaps between groups will lead to more tension between them. In some states, ethnic groups coexist relatively peacefully, and strong national identities have overcome ethnic and regional differences (Miguel and Gugerty, 2004). In other cases, ethnic groups have engaged in conflict and national identities are relatively weak. For example, salient ethnic cleavages may impact the welfare state in America, but Germany’s Protestant-Catholic divide is not a politicized cleavage that has impacted spending on public goods. Instead of only looking at whether or not a state is diverse using Alesina’s Ethno-fractionalization index, scholars have begun using new statistics that measure the saliency of ethnic cleavages (Steele, 2016). Furthermore, scholars also began to breakdown ethnic identity--language, religion, and race—into its different components to see if different forms of ethnicity had different impacts on welfare state spending. Finally, other political scientists began analyzing the impact of institutions on ethnic cleavages to see if ethnic divides could be mitigated by institutional structures.
One of the authors that have attempted to explain why the results of past quantitative studies were mixed is Liza Steele. In the article “Ethnic Diversity and Support for Redistributive Social Polices,” Steele analyzes the reasons why ethnic diversity can have a varied effect on the amount of welfare spending (Steele, 2016). She theorizes that ethnic diversity can potentially have a negative impact on welfare spending, but this is highly dependent on whether the ethnic cleavage is politicized. It is also dependent on the size of the wealth gap between ethnic groups. The more politicized a cleavage and the larger the wealth gap, the more like it is to find the existence of welfare chauvinism, which is when welfare becomes associated with a minority group. To test this theory, the author conducted over 100 different regression analyses with data pooled together from 91 different countries. As a robustness check, the author uses multiple measurements of welfare spending from the World Bank development indicators, the Standard Income Inequality data base, and the Economic Freedom of the World dataset. The author also analyzes the World Values Survey to measure level of support for the welfare state across countries. To measure the independent variable, the author uses a variety of different datasets. Along with using Alesina’s Ethno-fractionalization Index, the author also uses data sets that measure the saliency of ethnic cleavages across countries. To measure the amount of political inequality, the author uses the Ethnic Power Relations dataset. This dataset measures whether ethnic groups in a country share power in the executive branch or if only one ethnic group dominates the government at the expense of others. Liza Steele also uses Ted Gurr’s Minorities at Risk dataset, which analyzes the degree to which demographically significant minority groups faces political oppression, and she also used a dataset that measures amount of immigration that takes place per year. Finally, the author also controls for a large number of socioeconomic and institutional variables that can potentially impact the size of welfare states. As predicted, ethnic diversity only had an impact on welfare spending across states depending on the nature of the ethnic cleavage and the degree of inequality between groups. Measurements of political and economic inequality between ethnic groups had a statistically negative effect on welfare spending, but ethnic diversity on its own had no significant effect. Immigration only had a negative effect on welfare spending when it was coupled with high rates of inequality in society. This study is impressive in terms of the larger number of robustness checks and the extensive number of control variables.
Other studies have shown similar results. Kate Baldwin and John Huber, in the article “Economic versus Cultural Differences: Forms of Ethnic Diversity and Public Goods Provision,” also analyzed the effect of ethnic diversity on the provision of public goods (Baldwin and Huber, 2010). The authors claim that past studies on the subject found mixed results because they only used Alberto Alesina’s Ethno-fractionalization Index to measure ethnic diversity. Baldwin and Huber argue that it is not ethnic diversity that matters but the nature of the relationship between different groups. They argue that larger amounts of economic and cultural inequality between groups will lead to more hatred, which in turn will lead to ethnic chauvinism and less redistribution of public goods. Baldwin and Huber also theorize that greater cultural differences between groups in terms of language will make collective action more difficult. To test these two theories, the authors analyze the impact of inequality between groups on public goods spending in 46 countries form the years 1996 to 2006. To measure their dependent variable, they look at ten different statistics from the World Bank’s data base on public health, education, tax capacity, and infrastructure. To measure economic inequality between groups, they developed a new statistic called Between Group Inequality (BGI index). To measure cultural inequality, they use James Fearon’s Linguistic Fractionalization Index. They also did a separate analysis using Alesina’s Ethno-fractionalization Index. The authors controlled for GDP per capita, regime type (Polity IV), and the size of the population. The results showed that only the BGI index had a statistically negative effect on public goods spending. In other words, ethnic diversity was more likely to impact public spending when there was a large wealth gap between ethnic groups.
What these studies show is that ethnic diversity does not necessarily mean that the country will struggle more with collective action or that ethnic minorities will be systematically discriminated against. Different institutional arrangements and public policy decisions can mitigate the potential problems caused by ethnic diversity. Arend Lijphart, in the article “Constitutional Design for Divided Societies,” analyzes the reasons why the relationship between ethnic groups differs across countries (Lijphart, 2004). In the work, the author offers a synthesis of his past works on the subject. According to Lijphart, certain types of institutions make it more likely for ethnic groups to coexist in peace and engage in collective action with one another. For example, federalism gives ethnic groups that are concentrated in peripheral regions some autonomy, which includes control of taxation and public spending at the local level. Furthermore, proportional electoral systems at the national level encourage the formation of more political parties and allows smaller minorities greater representation in the legislature. In addition, having quotas in the executive branch in the bureaucracies gives minorities greater representation in institutions responsible for the distribution of public goods and services, which can potentially decrease the amount of discrimination against ethnic minorities. Other scholars have demonstrated that states that deliberately try to promote a national identity and discourage regional and ethnic identities over the long term can create stronger states that distribute more goods and services. For example, Edward Miguel and Mary Kay Gugerty, in the article “Tribe or Nation? Nation Building and Public Goods in Kenya versus Tanzania,” demonstrates that local level governments in Tanzania are better able to raise and spend money on education and infrastructure than local governments in Kenya because the Tanzanian government has made far greater efforts to foster a national identity at the expense of regional tribal identities over the last half century (Miguel and Gugerty, 2004). This includes promoting a common language and national historical heritage in schools. This is why diversity only had a negative impact on public spending in Kenya. Of course, this process of nation building also leads to the loss of local linguistic and cultural diversity overtime, but it also creates a common sense of identity across the state.
While most of the recent scholarship has argued that the impact of ethnicity on the welfare states depends heavily on the saliency of the social cleavage, it is important to note that not all political scientists agree (Soifer, 2016). Some scholars have tried to show that there are variables that explain both the existence of salient ethnic cleavages and the amount of spending on welfare and other public goods. For example, Andreas Wimmer, in the article “Is Diversity Detrimental? Ethnic Fractionalization, Public Goods Provision, and the Historical Legacies of Stateness,” argues that salient ethnic cleavages and the amount of public goods provision are both explained by the level of state capacity. In the article, Wimmer analyzes the reasons why some countries spend more on the distribution of public goods than others (Wimmer, 2016). Specifically, he focuses on the effect of ethnic diversity on public goods provision. The author argues that past studies that have shown that diversity has a negative effect on public goods provision failed to control for the impact of state capacity on the distribution of public goods. Wimmer claims that state capacity can explain both the level of ethnic diversity and the state’s ability to distribute public goods. States that have a high degree of capacity can foster a strong sense of national identity by establishing educational institutions, building an infrastructure, and facilitating communication across the country. Furthermore, greater state capacity means a greater ability to tax and spend. To test this theory, the author first conducted a large-n quantitative analysis of the effect of ethnic diversity on public goods provision in the developing world. To measure ethnic diversity, the author uses the Ethnic Power Relations Index, which analyzes the degree of political inequality between ethnic groups in a country. The assumption is that states with less salient ethnic cleavages will distribute more public goods. To measure public goods provision across many states, they used measurements for literacy rates, infant mortality, and railroad tracks per kilometer. To measure state capacity, the authors used a new data set to determine if a state had a bureaucratic structure prior to European colonialism. States like China that had a bureaucratic structure prior to colonialism are assumed to have more state capacity upon independence form European influence than states like the Democratic Republic of the Congo. The authors controlled for a wide range of geographic, economic, social, and political variables. First, they conducted an analysis without the measure for state capacity and found that salient ethnic cleavages had a negative effect on public goods provision. However, when the measurement for state capacity was added, salient ethnic cleavages had no effect and state capacity had a positive impact on the provision of public goods. Of course, this study only analyzes a couple of different public goods and does not directly analyze public spending on welfare provision.
Conclusion
While there are critics of the theory that ethnic diversity has a negative impact on the welfare state, there is also a substantial body of qualitative and quantitative evidence in support of it. Ethnic diversity can negatively affect the distribution of welfare and public goods in general depending on the nature of the ethnic cleavage and the good being distributed. However, ethnic diversity on its own does not necessarily mean that groups will struggle over the distribution of resources. Institutional reforms and the fostering of a strong national identity can mitigate the relationship between ethnic groups and improve the state’s capacity to develop a robust welfare state across ethnic lines.
While the work completed on this subject has grown more sophisticated in recent years, there are still significant gaps in the literature. Recent work on the subject has focused on understanding how the saliency of the ethnic cleavage impacts welfare spending, but far less work has been done understanding how the nature of the public good impacts the results of a study. Are ethnic cleavages more likely to impact spending on welfare in comparison with spending on other public goods such as infrastructure or the military? Furthermore, are there differences across welfare programs? For example, evidence from several studies in the United States and other countries indicates that racial and class cleavages have a more negative impact on means tested welfare programs like TANF benefits than universal programs like Social Security (Jordan, 2013). It is easier to frame a welfare program as being targeted at a minority group when the program is only utilized by the poor or an ethnic minority. Are there similar interactions between spending on other types of public goods and ethnic cleavages?
Work Cited
Alesina Alberto, Reza Baqir, and William Easterly. 1999. “Public Goods and Ethnic Divisions,” The Quarterly Journal of Economics, 114(4): 1243-1284.
Alesina, Alberto, and Edward L. Glaeser. 2004. Fighting Poverty in the US and Europe: A World of Difference. Oxford: Oxford University Press.
Baylouny, Anne Marie. 2008. “Militarizing Welfare: Neo-liberalism and Jordanian policy,” The Middle East Journal, 62(2): 277-303.
Bobo, Lawrence, James R. Kluegel, and Ryan A, Smith. 1997. "Laissez-Faire Racism: The Crystallization of a 'Kindler, Gentler' Anti-black Ideolog," in Racial Attitudes in the 1990s: Continuity and Change, edited by Steven A. Tuch and Jack K. Martin. Praeger Publishing: Connecticut.
Bloom, Pazit Ben-nun, Gizem Arikan, and Marie Courtemanche. 2015. "Religious social identity, religious belief, and anti-immigration sentiment," American Political Science Review, 109(2): 203-221.
Boushey, Graeme. 2016. "Targeted for Diffusion? How the Use and Acceptance of Stereotypes Shape the Diffusion of Criminal Justice Policy Innovations in the American States," American Political Science Review,110(1): 198-214.
Cameron, David. 1978. "The Expansion of the Public Economy: A Comparative Analysis," American Political Science Review, 72(4): 1243-61.
DeSante, Christopher D. 2013. “Working Twice as Hard to Get Half as Far: Race, Work Ethic, and America's Deserving Poor,” American Journal of Political Science, 57(2): 342-356.
Ditonto, Tessa M., Richard R. Lau and David O. Sears. 2013. “AMPing Racial Attitudes: Comparing the Power of Explicit and Implicit Racism Measures in 2008,” Political Psychology, 34(4).
Dixon, Jeffrey C. and Michael S. Rosenbaum. 2004. “Nice to Know You? Testing Contact, Cultural, and Group Threat Theories of Anti-Black and Anti-Hispanic Stereotypes,” Social Science Quarterly, 85(2).
Dolowitz, David P. and David Marsh. 2000. “Learning from Abroad: The Role of Policy Transfer in Contemporary Policy-Making,” Governance: An International Journal of Policy and Administration, 13(1): 5-24.
Eibl, Ferdinand. 2016. "Social Dictatorships: The Political Economy of the Welfare State in the Middle East and North Africa," Dissertation for St. Antony's College.
Enos, Ryan D. 2016. "What the demolition of public housing teaches us about the impact of racial threat on political behavior," American Journal of Political Science, 60(1): 123-142.
Haggard, Stephan and Robert Kaufman. 2008. Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe. Princeton University Press: Princeton.
Hartman, Todd K., Benjamin J. Newman, and C. Scott Bell. 2014. "Decoding Prejudice Toward Hispanics: Group Cues and Public Reactions to Threatening Immigrant Behavior," Political Behavior, 36: 143-163.
Hjerm, Mikael and Annette Schnabel. 2012. "How Much Heterogeneity Can the Welfare State Endure? The Influence of Heterogeneity on Attitudes towards the Welfare state," Nations and Nationalism, 18: 346-369.
Huber, Evelyne and John D. Stephens. Development and Crisis of the Welfare State: Parties and Policies in Global Markets. The University of Chicago Press: Chicago, 2001.
Huber, Gregory A. and John S. Lapinski. 2006. “The ‘Race Card’ Revisited: Assessing Racial Priming in Policy Contests,” American Journal of Political Science, 50(2): 421–440.
Kinder, Donald and David Sears. 1981. “Prejudice and Politics: Symbolic Racism Versus Racial Threats to the Good Life," Journal of Personality and Social Psychology, 40(3): 414-431.
Jawad, Rana. “Review Essay: Possibilities of Positive Social Action in the Middle East: A Re-Reading of the History of Social Policy in the Region.” Global Social Policy 8, no. 2 (2008): 267–280.
Jensen, Nathan M., and Rene Lindstadt. 2012. "Leaning Right and Learning from the Left: Diffusion of Corporate Tax Policy Across Borders," Comparative Political Studies, 45(3): 283-311.
Jordan, Jason. 2013. “Policy feedback and support for the welfare state,” Journal of European Social Policy, 23(2): 134-148.
Lieberman, Robert. 2003. "Chapter One: Race and the Limits of Solidarity: American Welfare State Development in the Comparative Perspective," in the book Race and Welfare Reform, edited by Sanford Schram, Joe Soss, and Richard Fording. University of Michigan Press: Michigan.
Lijphart, Arend. 2004. “Constitutional Design for Divided Societies,” Journal of Democracy, 15(4): 96-109.
Lipset, Seymour. American Exceptionalism: A Double-Edged Sword. W.W. Norton: New York, 1996.
Marsh, David and J. C. Sharman. 2009. “Policy Diffusion and policy Transfer,” Policy Studies, 30 (3): 269-288.
Massoud, Karshenas, Valentine M. Moghadam, and Randa Alami. 2014. “Social Policy after the Arab Spring: States and Social Rights in the MENA Region,” World Development, 64: 726–739.
Miguel, Edward and Mary Kay Gugerty. 2004. “Tribe or Nation? Nation Building and Public
Goods in Kenya versus Tanzania,” World Politics, 56(April): 327-362.
Nail, Paul R., Helen C. Harton, and Brian P. Decker. 2003. "Political Orientation and Modern versus Aversive Racism: Tests of Dovidio and Gaertner's (1998) Integrated Model,"Journal of Personality and Social Psychology, 84(4): 754.
Newman, Benjamin J. 2013. “Acculturating Contexts and Anglo Opposition to Immigration in the United States,” The American Journal of Political Science, 57(2): 374-390.
Owens, Michael Leo and Adrienne Smith. 2012. "'Deviants' and Democracy: Punative Policy Designs and the Social Rights of Felons as Citizens," American Politics Research, 40: 531-67.
Piven, Frances Fox and Richard Cloward. 1971. Regulating the Poor: The Functions of Public Welfare. Pantheon Books: New York.
Quillian, Lincoln. 2008. “Does Unconscious Racism Exist?” Social Psychology Quarterly, 71(1): 6–11.
Schneider, A., and H. Ingram. 1993. “Social Construction of Target Populations: Implications for Politics and Policy,” American Political Science Review, 87(2):334-47.
Schram, Sanford, Joe Soss, Richard Fording, and Linda Houser. 2009. ‘‘Deciding to Discipline: Race, Politics, and Punishment at the Front Lines of Welfare Reform,’’ American Sociological Review, 74 (3): 398–422.
Sniderman, Paul M., Thomas Piazza, Philip E. Tetlock, Ann Kendrick. 1991. “The New Racism,” The American Journal of Political Science, 35(2): 423-447.
Soifer, Hillel D. 2016. "Regionalism, Ethnic Diversity, and Variation in Public Goods Provision by National States," Comparative Political Studies, 49(10): 1341-1371.
Soss, Joe, and Schram, Sanford. 2007. “A Public Transformed? Welfare Reform as Policy Feedback,” American Political Science Review, 101(1), 111-127.
Soss, Joe, Richard Fording, and Sanford F. Schram. 2008. “The Color of Devolution: Race, Federalism, and the Politics of Social Control,” The American Journal of Political Science, 52(3): 536-553.
Schram, Sanford, Joe Soss, Richard Fording, and Linda Houser. 2009. "Deciding to Discipline: Race, Politics, and Punishment at the Front Lines of Welfare Reform," American Sociological Review, 74(3): 398-422.
Soss, Joe., Richard Fording, and Sanford Schram. 2011. “The Organization of Discipline: From Performance Management to Perversity and Punishment,” Journal of Public Administration Research and Theory, 21(2): 203-232.
Steele, Liza G. 2016. "Ethnic Diversity and Support for Redistributive Social Policies," Social Forces, 94(4): 1439-1481.
Tarman, Christopher and David Sears. 2005. “The Conceptualization and Measurement of Symbolic Racism,” The Journal of Politics, 67(3): 731–761.
Taylor, Marylee C. 1998. “How White Attitudes Vary with the Racial Composition of Local Populations: Numbers Count,” American Sociological Review, 63(4): 512-535.
Weber, Christopher R., Howard Lavine, Leonie Huddy, and Christopher M. Federico. 2014. “Placing Racial Stereotypes in Context: Social Desirability and the Politics of Racial Hostility,” The American Journal of Political Science, 58(1): 63–78.
White, Ismail K. 2007. “When Race Matters and When It Doesn’t: Racial Group Differences in Response to Racial Cues,” The American Political Science Review, 101(2).
Wood, Geof and Ian Gough. 2006. “A Comparative Welfare Regime Approach to Global Social Policy,” World Development, 34(10).
Yörük, Erdem. 2012. “Welfare Provision as Political Containment: The Politics of Social Assistance and the Kurdish Conflict in Turkey.” Politics & Society40(4): 517–547.
Yörük, Erdem. "Shifting forms of Turkish State Paternalism toward the Kurds: social assistance as benevolent control," Dialectical Anthropology, 37(1): 153-58.
