Comparative Public Policy: Patterns of Post-war Transformation

Published by EH.NET (May 1, 2000)

Francis G. Castles, Comparative Public Policy: Patterns of Post-war

Transformation. Cheltenham, UK and Northampton, MA: Edward Elgar, 1998. xi

+ 352 pp. $30 (cloth), ISBN: 1-85898-816-0.

Reviewed for EH.NET by Jim F. Couch, Department of Economics, University of

North Alabama.

Professor Francis G. Castles of the Research School of Social Sciences,

Australian National University, has undertaken quite a task in his latest work

— that of explaining the growth of government. Castles investigates twenty-one

advanced countries that are all long-term members of the Organization for

Economic Cooperation and Development (OECD), which enables the author to obtain

standardized data. Data are from three periods — 1960, 1975, and the early

1990s.

The pace of governmental growth among nations during this time was uneven.

Measuring “national trajectories of public expenditure growth in terms of their

changing share in GDP” between 1960 and 1995, “seven countries — Denmark,

Finland, Greece, Japan, Portugal, Sweden, and Switzerland-had experienced

growth of government in excess of 100 percent, whilst, at the other end of the

distribution, in the USA, outlays had grown by only 22 percent and, in the

United Kingdom, by only 35 percent” (p. 100).

Castles begins his analysis of the growth of government with World War II,

arguing that the war reshaped society. “Wartime experience had accustomed

governments to a more interventionist role, so that the task of running a

welfare state, which had seemed beyond most governments in the 1930s, now

seemed almost routine” (p. 28).

Next he investigates characteristics of the nations including their economies,

their societies, and their political systems and offers explanations for why

these characteristics may be related to public policy development. Castles

explores a wide variety of possible explanatory variables including voter

turnout, Catholicism, trade union membership, international trade, and the

seats held by left leaning and right leaning politicians. He provides a summary

of the independent variables (pages 106-108) and the justification for their

inclusion in the model.

Quantifying these variables, however, sometimes proves to be difficult. For

example, Castles calls World War II “the single most important precursor of

post-war outcomes” and defines a war impact variable ranging from 0 to 3 to

capture the severity of the wartime experience. While the extent of wartime

damage is certainly important, a scale with four values is unfortunately

arbitrary.

Also included is the age of the population because “countries with a larger

proportion of old people are likely to have had higher levels of government

expenditures” (p. 107). Castles notes that researchers suggest that large

numbers of elderly people can form a powerful interest group that is able to

engage in successful rent-seeking. Thus, as the population grows older, seniors

can demand more services from government and the welfare state will grow.

Castles ignores Olson’s (1965) Logic of Collective Action which asserts

an optimal group size for cooperative action. Larger groups do not necessarily

have greater political clout. Richard McKenzie empirically tests this

proposition in his paper “The Retreat of the Elderly Welfare State” (Center for

the Study of American Business, Washington University in St. Louis, Publication

Number 102, December 1990). McKenzie finds that as the number of seniors in the

U.S. has grown expenditures have declined.

Castles rather abruptly changes directions in the later chapters of the book by

exploring the sources of cross-national variation in male and female labor

force participation, in unemployment rates, in home ownership, and in fertility

and divorce rates.

Returning to his original theme, he explains that readers hoping for a single

explanatory key to the growth of the welfare state will come away disappointed.

Instead, “the causes and consequences of the policy actions of the state differ

widely from one policy area to another and within particular areas over time”

(p. 300). However, he does identify some surprising relationships. For example,

economic development had a smaller than expected role in the growth of the

welfare state. Overall, Castles’ work is accessible and provides much data

regarding public policy after World War II.

Jim F. Couch is an Associate Professor of Economics at the University of North

Alabama. His book, The Political Economy of the New Deal (Edward Elgar,

1998) co-authored with William F. Shughart, describes the political forces that

shaped much of the New Deal.