ABSTRACT
Nearly all industrialised countries have, in the second half of the twentieth century, established elaborate and comprehensive systems of social protection and now spend a considerable proportion of their national incomes on these schemes. Resources are redistributed in multiple directions: between the young and the old, between families with children, single persons and childless couples, between the healthy and the sick, between the rich and the poor, and so forth. The redistributive impact of the welfare state is so great that some population groups actually receive the largest part of their income from the public purse. Yet, a sizeable proportion still lives in economic distress in all industrial countries. This persistence of poverty in advanced welfare states casts serious doubt on the virtues of the market economy as well as on the fundamental operating procedures of the tax and transfer systems and, more specifically, of social protection schemes, in both their social insurance and social assistance components. This issue is particularly challenging in Europe, since the European social model, notwithstanding its internal divergences, is perceived on the whole to provide greater protection against social risks than other social models within the democratic, industrialised world.
