Welfare Spending, Government Partisanship, and Varieties of Capitalism.

This paper explores the effects of government partisanship on the (inflation-adjusted) growth rate of social spending per capita in 17 OECD countries over the period 1962-98. We estimate partisan effects separately for "liberal market economies" and "social market economies," and use 15-year moving windows to capture changes in these effects. The influential "Varieties-of-Capitalism approach" suggests that in social market economies, employers as well as workers have a strong interest in the maintenance of existing systems of social protection and public provision. Contrary to expectations that we derive from this approach, our results indicate that partisan conflict over welfare spending has become more intense in social market economies than liberal market economies over the last two decades. [ABSTRACT FROM AUTHOR]