Private insurance, public welfare, and financial markets: Alpine and Maritime countries in comparative-historical perspective

Arjen van der Heide and Sebastian Kohl

No 22/4, MPIfG Discussion Paper from Max Planck Institute for the Study of Societies

Abstract: Contemporary capitalist societies use different institutions to manage economic risks. While different public welfare state and financial institutions (banks, capital markets) have been studied across coordinated and liberal market economies, this paper adds the private insurance sector to the study of countries' security arrangements, following up on Michel Albert's classical distinction between Alpine and Maritime insurance cultures. Building on extensive new insurance data collections (1880-2017) and institutional analysis, this paper corroborates the long-run historical existence of two worlds of private insurance. Maritime countries (USA, GBR, CAN) developed much bigger life and non-life insurance earlier, with no state-associated insurance enterprises and riskier investments steered towards financial markets. Alpine insurance (AUT, DEU, CHE), by contrast, was initially smaller, with strong state involvement, a significant reinsurance tradition and relatively heavy investments in mortgages and property, due to economic and financial backwardness. We argue that the larger and more "Maritime" the insurance sector, the more it made welfare states liberal and securities markets large. Insurance is thus a hidden factor for countries' varieties of capitalism and world of welfare. The recent convergence on the Maritime model, however, implies that the riskier and risk-individualizing type of private insurance has added to privatization and securitization trends everywhere.

Keywords: financial development; historical comparison; insurance; varieties of capitalism; welfare; finanzielle Entwicklung; historischer Vergleich; Spielarten des Kapitalismus; Versicherungen; Wohlfahrtsstaat (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-fdg, nep-his and nep-hme
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Related works:
Journal Article: Private Insurance, Public Welfare, and Financial Markets: Alpine and Maritime Countries in Comparative-Historical Perspective (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:mpifgd:224

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