Efficient and Inefficient Welfare States

Yann Algan, Pierre Cahuc and Marc Sangnier

No 5445, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper shows that cross country differences in the generosity and the quality of the welfare state are associated with differences in the trustworthiness of their citizens. We show that generous, transparent and efficient welfare states in Scandinavian countries are based on the civicness of their citizens. In contrast, the generosity but low transparency of the Continental European welfare states survive thanks to the support of a large share of uncivic individuals who consider that it can be justifiable to misbehave with taxes and social benefits. We also explain why countries with an intermediate degree of trustworthiness of their citizens and of transparency of the government, like Anglo-Saxon countries, have small welfare states. Overall, this paper provides a rationale for the observed persistence of both efficient and inefficient welfare states, as a function of the civicness of the citizens.

Keywords: civism; trust; welfare state; corruption (search for similar items in EconPapers)
JEL-codes: H1 Z1 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2011-01
New Economics Papers: this item is included in nep-eur, nep-ltv and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Published - revised version published as 'Trust and the Welfare State: the Twin Peaks Curve' in: Economic Journal, 2016, 126 (593), 861 - 883

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https://docs.iza.org/dp5445.pdf (application/pdf)

Related works:
Journal Article: Trust and the Welfare State: the Twin Peaks Curve (2016)
Working Paper: Trust and the Welfare State: The Twin Peaks Curve (2014)
Working Paper: Trust and the Welfare State: the Twin Peaks Curve (2014)
Working Paper: Trust and the Welfare State: The Twin Peaks Curve (2014)
Working Paper: Trust and the Welfare State: The Twin Peaks Curve (2014)
Working Paper: Efficient and Inefficient Welfare States (2011)
Working Paper: Efficient and Inefficient Welfare States (2011)
Working Paper: Efficient and Inefficient Welfare States (2011)
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