ABSTRACT

Late industrialization, a record of authoritarian regimes (and/or political instability) until late in the post-war period, and a configuration of rent-seeking statist-clientelistic practices (of varying prevalence across the region) are among the main features of South European (SE) countries that, to one degree or another, account for their being laggards in welfare state formation. An upward trend of social expenditure is manifest since the early 1980s through to the turn of the century, accompanied by landmark reforms (e.g. establishment of national health systems, devolution of healthcare, and social welfare functions to regional entities in the case of Spain and Italy). Hence SE welfare states can no more be considered rudimentary. In light of the three welfare state regimes put forward by Esping-Andersen (1990), SE welfare

arrangements starkly manifest a hybrid form. First, there is a core element concerning income transfers (primarily pensions) developed on an occupational basis according to the Bismarckian model. Traditionally highly fragmented, social insurance systems have undergone significant changes in the direction of levelling out benefits and introducing occupational pensions and private insurance. Secondly, in the late 1970s to the early 1980s, a social-democratic element was introduced in healthcare indicating a significant path shift that was accomplished with varying success in each country. Thirdly, social care services and social assistance remain a less-developed element of social protection. Meagre provision, funded mostly through taxation, has traditionally been based on means testing, indicating a liberal orientation. In parallel, a strong variation as to the role of non-governmental organizations (NGOs) (including religious organizations) is observed. A denser network of such welfare providers is prominent in the Latin Rim countries (Italy, Spain and Portugal) with the Catholic Church playing a crucial role, while this is not the case in the Balkan area where the values of Eastern Orthodoxy and its historical limitations of social activism did not provide fertile ground for institutionalized voluntary action. Most importantly, SE welfare states started expanding at a time of welfare state restructuring

in North-West Europe in the face of growing fiscal problems and the ascendancy of neo-liberal forces (particularly in the Anglo-Saxon world) seeking to roll back the welfare state. Soon fiscal constraints in SE countries became highly pressing, particularly during the task of joining the European Monetary Union (EMU). Even before the eruption of the current economic crisis, SE welfare states were confronted with extensive unmet need, serious inequalities and imbalances in social welfare, and significant functional and administrative inefficiencies. The crisis severely hit all four countries. Ensuing structural adjustment (more or less directly enforced by

supranational institutions – EC, ECB, IMF, rating agencies) embraces sweeping austerity measures exerting strong pressures on social spending. In the second section we briefly review the academic analysis on the SE social protection

model and highlight major similarities and differences in the region. The third section discusses the reforms over the last two decades and traces the impact of the economic crisis. In light of drastic changes underway, the conclusion raises the question of whether harsh austerity measures may deal a serious blow to SE welfare states.