Introduction

The possible development in welfare state spending is often described using labels such as ‘retrenchment’, ‘austerity’, ‘the use of new public management’ and ‘marketisation’. Research is often further conducted on a single country or issue, and less by trying to encapsulate the varieties of development in a number of countries, both on an overall level and within certain specific elements of welfare state development. However, given the focus on aspects such as welfare chauvinism and populism (as shown in Chapter Two), and also deserving/undeservingness, it is very important to be able to distinguish between actual and possible types of retrenchment, or changes that are due to, for example, demographic developments, the cost of providing services and the replacement rates of central benefits, as this can also add knowledge on whether changes are driven by the ideas of neoliberalism and/or welfare chauvinism. Furthermore, at the outset, right-wing populism could be expected to reduce spending and cut taxes.

This implies the need to look into the size of the overall spending on welfare as a percentage of the total economy, measured by gross domestic product (GDP), as this is one indicator of whether social policy is actually declining or not in relative terms, albeit that it cannot stand alone. This chapter tries to depict the development from before the financial crisis to the current time, insofar as comparative data are available.

The second section presents the overall depiction of the development in welfare state spending using a variety of parameters, and the third section looks into the development in replacement rates, discussing possible ways of carrying out retrenchment by changing conditionality (eligibility criteria, the size of benefits and the use of tax expenditures) (Watts and Fitzpatrick, 2018). The fourth section then considers the development in areas where, at the outset, one should not expect retrenchment – health care and old age – as they are connected to, and have higher support from, voters (although see also Chapter Seven), and are thereby also often supported by more populist parties as the benefit is not perceived as going to those not contributing. The fifth section then makes some conclusions.