The ‘Dependent Variable Problem’ in Comparative Analysis
Edited by Jochen Clasen and Nico A. Siegel
Chapter 4: When (Only) Money Matters: The Pros and Cons of Expenditure Analysis
4. When (only) money matters: the pros and cons of expenditure analysis Nico A. Siegel Expenditures are epiphenomenal to the theoretical substance of welfare states. (Esping-Andersen, 1990) Money is not all there is to policy, but there is precious little policy without it. (Klingemann, Hoﬀerbert and Budge, 1994) The whole notion of a ‘race to the bottom’ is premised on dog-eat-dog cuts in expenditure and taxation. (Castles, 2004) INTRODUCTION1 This chapter focuses on a particular dependent variable problem in comparative welfare state research. It will assess the strengths and limits of comparative inquiries analysing welfare states mainly or even exclusively on the basis of social expenditure data. Although the major aim of this chapter is to discuss the speciﬁc problems of expenditure based analyses, it will also address more general methodological issues which are related to the dependent variable problem in macroquantitative comparative welfare state research. Over the last decade the comparative analysis of welfare reform has become a booming research ﬁeld. More than a decade ago, Paul Pierson’s seminal work on the political logic of and limits to welfare state retrenchment sparked oﬀ a lively and ongoing debate about the so-called ‘new politics of the welfare state’ (Pierson, 1994). This discussion about the old and new politics of the welfare state is far from being settled (Pierson, 2001; Castles, 2004). Scholars from various disciplines and from distinct analytical angles have investigated welfare state change in advanced societies and presented strikingly divergent results concerning both the scope of...
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