The Dissertation Workshop is a graduate educational seminar open to graduate students and their advisors. CES invites graduates students who are interested in attending this workshop or in presenting their research to contact Nikolas Weyland, CES Dissertation Workshop Coordinator.
Angie Jo is a Ph.D. candidate in political economy at MIT. Her dissertation research examines differences in how wealthy democratic countries insure themselves against the risk of large collective crises — such as financial crisis, COVID-19, and climate change-induced natural disasters — and recover from their aftermath. Her research also looks at how societies conceive of the proper role of the state in protecting public welfare; what relationship this has with the design of their welfare state; and in what moments the meaning of “welfare” itself might change.
This paper examines the relationship between a country’s welfare regime (Esping-Andersen 1989) and its emergency fiscal policies in response to COVID-19. Jo finds that Liberal welfare states vastly overspent during the crisis, relative to other countries and their own baseline, while Social Democratic states underspent during the crisis, particularly on direct cash transfers. She theorizes that this is because 1) Liberal governments inherit weak institutional capacity with which to deliver citizen aid, which forces policymakers to use broad, untargeted transmission channels that inflate policy volume through inefficiency; and 2) Liberal governments design policies for impermanence which expire after the immediate emergency has passed, and block durable expansions to the welfare state. These constraints compel Liberal policymakers to choose a cash windfall over other policy tools in the face of a crisis, which leads to a temporary “jump” in fiscal spending, whereas Social Democratic states are able to “smooth” their spending across normal times and crises. She illustrates the plausibility of this theory using case studies of the United States and Sweden, as well as principal components analysis on the legislative text of COVID-19 stimulus packages.
This work contributes to a burgeoning research agenda on the politics of crisis (Lipscy 2020) and the literature on varieties of capitalism (Hall & Soskice 2001) by studying fiscal policy as a complementary extension of a country’s welfare regime, and illuminating the ways in which the menu of a country’s crisis response options is constrained by the features of its everyday welfare state.
