Party Institutionalization and Welfare State Development

Abstract

We propose that the extent to which political parties are institutionalized shapes welfare state development. Institutionalized parties allow politicians to overcome coordination problems, avoid capture by special interests, and form stable linkages with broad social groups. These features both enable and incentivize politicians to pursue generous and universal welfare policies. Employing recent measures of party institutionalization and welfare law features, we test implications from our argument on data covering 169 countries and extending back to 1900. Even when accounting for country- and year-fixed effects and institutional features such as electoral system, regime type and state capacity, we find robust evidence that party institutionalization leads to more extensive, universal, and generous welfare arrangements. The relationship is more pronounced in democracies, but exists also in autocracies. When disaggregating party institutionalization and evaluating mechanisms, the linkages that institutionalized parties form with social groups constitute one important, but not the only relevant, factor.