The state has several responsibilities, as it is the custodian of the public interest meaning people rely on it for important services, such as healthcare, creation of employment opportunities, provision of social amenities, enhancement of educational services, and ensuring the security of citizens.
Welfare entails offering the minimum level of well-being and social support to the populace. In some countries, social support is treated as public aid and the government provides it with the help of aid organizations, informal social groups, spiritual groups, and inter-governmental organizations. However, countries differ in terms of providing these important services to the people and a number of factors account for this.
In capitalist states, such as the US, Britain, Canada, Australia, and Ireland, the term welfare is understood differently because the government is only supposed to facilitate individuals to achieve their ambitions (Ta-Nehisi, 2014). In this regard, each person has the role of paying taxes and the rule of law is given priority. In such states, institutions that are supposed to facilitate welfare are not developed since ethical principles are never followed given the fact an individual should determine his or her own destiny.
In Scandinavian states, welfare is important and political parties that win elections should always have strong policies towards improving the standards of living. In developing countries, especially those in Africa, Asia, and South America, welfare is not an issue of discussion because it does not feature in the political agendas of parties, as the main problem in these regions is economic and political development.
In Africa, the states do not have capacities to facilitate welfare services and the non-governmental organizations and the global governing institutions, such as the United Nations, fill the vacuums left. In communist states, the welfare services given to the public are regularized, as the state holds too much power over individuals and resources are communally owned. This paper looks at the factors that account for the institutional variations among states as regards welfare services.
A state is said to be developed when its institutions are well established to handle a social, political, or economic issue that threatens the survival of the locals. In the US, institutions are well placed to tackle political and economic conflicts that are likely to emerge whereas the Scandinavian countries, especially Norway and Denmark, have the strongest social institutions that cater for the welfare services, such as healthcare and employment.
One of the factors that lead to institutional differences is the efficient institution’s view whereby it is believed a society chooses an institution that is socially efficient. Under this model, a state opts for a system of resource distribution, which does not interfere with the performance of economic institutions (Piketty, 2014). The idea of efficiency is given priority as compared to optimality hence surplus, wealth creation, and output maximization is critical factors.
This perspective suggests that institutions should negotiate to prevent incurring unnecessary costs to gain competitive advantages. In the United States, the government does not set up institutions to provide welfare services to the population, but instead it negotiates with leading to companies to fund healthcare needs and education for the local populations. The ideological difference is an additional factor that leads to institutional variations, as each ideology has its principles and tenets.
In the United States, for instance, the effort is always rewarded leading to low taxation for the hardworking citizens given the fact the country is a supporter of the capitalist ideas (Cassidy, 2014). A belief system of a society has a strong influence on policy formulation and institutional formation. In countries that embraced socialism, such as Tanzania under Julius Nyerere, leaders wanted to promote the welfare of its citizens through the sharing of property under communal ownership.
In India, Fabian socialist beliefs were seen as the solution to the problems that affected the country at the time. In Korea, leaders in the North, such as Kim II Sung strongly believed that communism was the only available option in resolving the problems that people faced while Southern leaders led by Rhee and Park had a different view, as they were pro-capitalism since they wanted to empower individuals to create wealth and be independent.
From an incidental institutions perspective, the differences are brought about by the historical and political developments that a state has encountered. Britain, Germany, Russia, and the United States have gone through different political and social problems in history, which result in significant differences in the way institutions are structured.
In Britain for example, agriculture was commercialized long time ago and this played a critical role in the development of labor policies, especially the ones that dictate relations between the owners of the means of production and the proletariat.
This led to democratization, as the economy was under the control of the middle class who were politically assertive, something that helped in the fight against feudalism successfully. In Germany, the working class failed to seize the opportunity when it entered into an agreement with the ruling class leading to fascism while communism is Russia came about because of the inactiveness of the working class (Gough, 2005).
Models of Development
Many developing countries in Asia, Africa, and South America are faced with an uphill task of ensuring they achieve economic, political, and social objectives, but they are faced with a dilemma of choosing the best application development model. In Africa and Latin America, states had an option of settling on the modernization model that called on the political leaders to borrow the economic ideas from Europe, as the continent had already taken off economically.
However, the ideas of Marxist scholars and leaders changed the developmental policies of the regions. Additionally, the developing state is currently following the Asian model keenly given the speed in which some of the countries in the region, including South Korea, China, Singapore, and Taiwan, are developing. The market-friendly policies favored by some western countries, present several opportunities given its robust principles.
The model suggests that the market should be free of certain pressures that limit the prices of products and the wages paid to employees. Under the model, the government does not have any role to play in the economy apart from protecting consumers from ethical malpractices. Based on this, the market should operate according to its internal logic where the demands influence the supply meaning it is self-regulating.
If suppliers are allowed to offer prices at the price they deem sustainable to their business, they will be motivated to be innovative, which is an advantage to the economy. The system functions well in the labor market whereby people are paid based on the knowledge and talents they possess. In a free market, any person is free to set up a business, as there are no barriers to new entrants, something that plays a role in ensuring equality in economically.
The state wishing to develop will benefit from strong trade policies that characterize the model, advanced monetary policies, capital flows that permit foreign investment, a steady wage system, respect of property rights, regulation of business activities through licensing, and informal market activities (Kaumfman, 2014).
Welfare State Model
The welfare state model is mainly utilized in the Scandinavian countries and is based on common values. Any state intending to employ the model will have an opportunity of sharing political goals with the purpose of encouraging social solidity. The state has to offer equal opportunities by ensuring security, which is in terms of personal safety, health, and food is provided to each person.
Discrimination is highly discouraged in the model and each citizen should have access to education and health. In the free-market model or the market-friendly policies, the rights of the individuals are respected, but citizens have the responsibility of obeying the state laws. Whenever an individual fails to follow the law, the criminal justice system is applied strictly and the rights of the convicted individuals are limited.
However, the welfare model is different since even the prisoners have rights and the state has to take good care of them. The system enables women to penetrate through the labor market that is always dominated by men hence giving them economically opportunities. In Denmark for example, the private sector has incorporated the welfare services into its operations and foreigners are treated as ordinary citizens who are entitled to quality healthcare services.
The case is different with other welfare states, such as Sweden and Norway that develop policies to integrate foreigners into society. The developing countries wishing to adopt the model are likely to benefit from innovation because the model is flexible in the sense that it aims at coping with the new challenges that people face socially.
In terms of gender equality, taking care of the special groups, the establishment of social amenities, and setting up powerful educational systems are some of the areas that the welfare model is so successful (Potter, 1992).
Asian Model of Development
The free-market model has always failed to reap the desired objectives among developing countries because it has been applied unsuccessfully in Africa and Latin America. Africa has been facing political and economic crises that have undermined the successful application of the western favored model.
For instance, the continent has hardly experienced peace because leaders want to remain in office forever and the only policies formulated are meant to realize personal political and economic ambitions. The Asian model gives powerful technocratic elites the power to make governmental decisions without consulting the public, as development is technical.
Additionally, public servants must exercise and embrace strong work ethics through the sharing of cultural values (Park, 2010). The model suggests the balancing of private and public enterprises, as leaving investments in the hands of the few rich is detrimental to the economy.
The African continent should consider employing the Asian model of economic development since it does not tie democracy to economic issues. Democracy is a special model that fits within the European continent and North American because of the culture that dominates the regions. However, it has failed to play a role in sparking economic development in Africa
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Piketty, T. (2014). Excerpts from capital in the Twenty First Century. Cambridge: Harvard University Press.
Potter, D. (1992). The democratization of the Third World States. Oxford: Oxford University Press.
Ta-Nehisi, C. (2014). The case for reparations. New York: The Atlantic.