To understand welfare state, the research must start with a discussion and explanation of the ambiguities in the concept and the idea of welfare state, which is to consider from how welfare state has evolved to how the past inspires current circumstances is essential. Also, in this respect, it would be more clear for the possible gap in the literature. Hence, it is possible to both think more critically about the contents and outcomes of the welfare state and to formulate expectations about their relationship. (Gough, 2000)
The idea of welfare state has been developed since the late 20th century, so compare to other theories, it might not be as old; in fact, people are still trying to define it. In the other word, due to the variety of understandings to this theory, people tend to explain and furthermore apply it differently. In this sense, Titmuss (1968: 124) views welfare states as an “indefinable abstraction”, which is known to be an abstract idea that is hard to define.
The phrase “Welfare State” was first used to describe Labor Britain after the year 1945;
later, the concept of economic change with regard to welfare state was defined in British.
Welfare state entails direct and immediate social consequences, including the “abolition of poverty” and the “conquest of unemployment” (Briggs, 1961). According to Skocpol (1995:
4), the word “welfare state” appeared early from the industrializing Western world. She also mentioned that the beginning approach in regard to welfare state was from between the era 1880s and World War I. It includes not only the public pensions for the elderly but also the partly contributory and publicly funded social insurance measures.
Even more clearly, Hicks (1999) divided the history of welfare state into five different stages, including “origins”, which started in the 1880s; “consolidation”, which started from 1920; “social democratic dominance”, which continued from 1930s to 1950s; “democratic neocorporativism” that started from 1960s to 1980s, which Esping-Andersen called it the
“golden age” (1996) due to such as secure growth, full employment, moderate welfare needs and so on. However, beginning from 1970s, the economic performance started to decline and led to a stagnation of the welfare state expansion; therefore, the idea of “perceived”
retrenchment appeared, which is said to be the current status of welfare state. Also, this current stage is referred as the “silver age” of labor market restructuring, demographic transition and economic globalization by Taylor-Gooby (2002). The measures of retrenchment are also widely used by the governments nowadays due to the necessities of reducing costs of policies.
In this sense, retrenchment could be related to financial sustainability and would further be discussed in the research.
When it comes to welfare state, people think of Germany and the measures of Bismarck due to their early development of social welfare institutions, which is also known for its pension system from the mid-19th century. After their integral development of welfare state, the concept then soon been extended to not only other European countries, mostly western part of Europe but also countries such as America and Australia. Flora and Heidenheimer (1981) noted that in the year 1878, the concept of welfare state first developed in Germany and known as
“Wohlfahrstaat” in German. Furthermore, in 1941 the term had publicly been used by the British. Trying to sustain morale and discipline during the war, the word “Welfare” had been more involved with the concept of social benefits, which the governments in Britain tried to launch in the country once the war is over. Later, the concept has passed on to the Asian countries such as Japan and Taiwan to name a few.
2.1.1 Long-term Care and Welfare State
Before going through the literature review, there are some terms that should be clarified to be able to apply the concept. According to OECD (2017), there has been a dramatic soar in the older population in all European countries, however, not only Europe but the whole world is facing the same aging issue. Therefore, we need long-term care to make sure not only the living quality but the safety for the elderly who might not be capable of depending on themselves and yearning for something to rely on. According to the U.S. Department of Health
& Human Services, the definition of the term “Long-term care” is1:
a variety of services designed to keep a person healthy or meet a personal care need during a short or long period, and these services help old people live as independently and safely as possible when they are unable to perform well on their daily activities.
Also, according to X. Zhuang (2009), long-term care can be divided into three main categories, including home care, community care, and institutional care. Firstly, home care means care recipients receive their long-term cares in their own houses. Also, it includes the
“housing service” that has been promoting these years in Japan and Taiwan. Secondly, X.
Zhuang also noted that the concept of community care is from the theory of welfare state, which means care recipients receive their long-term cares in their own communities. Both Japan and Taiwan are now conducting the scheme of service delivery regarding community care, and it would be further discussed. Finally, the institutional care means care recipients receive their long-term cares in the institutions. Hence, often times it is rather far compare to the community care.
By carrying out a sound policy of long-term care, we need some theories to support the idea in order for us to come up with right suggestions for the governments, policy makers, and analysts. Hence, the research will be using the theory of welfare state. Welfare state is a system and a theory that has been used worldwide. Moreover, there are some terms and concepts that are associated with “Welfare State theory” that should be acknowledged first. Modern welfare states include countries such as Germany, France, Belgium and many other Nordic countries.
Also, as mentioned in last section (2.1), the idea of welfare state has also spread to the Asian countries including Japan and Taiwan.
When It comes to welfare state theory, it is also essential to know the central recurring concept in this literature, which is the idea of “Welfare regime typology” by Esping-Andersen.
He is a Danish sociologist who is famous for the devotion in welfare state. He is also the most influential person that first came up with the idea of welfare regimes. He defined and categorized welfare state into three different regimes in his book “The Three Worlds of Welfare Capitalism” (1990). Esping-Andersen is said to be the most frequently cited author in the realm of welfare state. And there is no paper on the topic that can overlook his dominating position in driving the current discourse. (John Velit-Wilson, 2000). Therefore, though there are lots of researchers and sociologists who stated about their concepts toward the typology of welfare capitalism after Esping-Andersen, this research decided to apply his concepts and ideas with regard to the three regimes of the welfare state.
According to Esping-Andersen (1990), the three typology of regimes includes Liberal, conservative, and social democratic. Liberal regime is for when there is a problem in the structures of family or market, for example, when a person is unable to satisfy his/her life through the family or market, the system of welfare state will support the person with a substitutional and temporary plan, and at often times the targets are low-income individuals.
However, this kind of system would lead to the existence of the hierarchy between the majority and the low-income recipients in the society. A representative country of liberal welfare state is the United State.
The idea of the conservative regime is to have a corporate system that keeps the traditional hierarchies, meaning the state would design different kinds of welfare schemes toward different levels of people, which is also called stratification. Also, the state tends to encourage families to assist dynamics. In the sense, the assistance of a state would only intervene when a family is unable to support its own members. A representative country of conservative welfare state is Germany.
The social democratic regime promotes a sense of equal benefits and services for the people of the state without regarding a person’s income level or status. A representative country of social democratic welfare state is Sweden.
When it comes to the three welfare state regimes, it is very important to have the concept of Decommodiciation, which comes from the word commodity. When a worker is commodified, they have to devote in the market in order to survive; namely, they will have to work to live or to support their families. Vice versa, decommodification means that people don’t have to sell their labor to be able to survive in a society. Therefore, oftentimes we use this term to measure the three welfare regimes. In this sense, social democratic regime is the highest level of decommodification, which the country would make workers independent of the labor market for them to not be forced to work in order to survive. To be more precise, the high levels of decommodification requires universalist policies, which the social rights granted on the basis of a person’s citizenship instead of the person’s performance. For instance, one has the right to
citizen. Liberal regime however is the lowest level of decommodification. Namely, the state does not have universalist policies. In fact, the state would make people as dependent as possible in order for them to rely on the market and have incentives to dedicate in it. Finally, Conservatives are classified as the middle level of decommodification.
According to Esping-Andersen (1996, 1997), Japan and Taiwan are classified as a ‘hybrid case’; namely, it is a special case that falls between conservative and liberal welfare regimes.
Moreover, when it comes to welfare state system, it seems that Japan is considered to be a good role model to Asian countries. According to Goodman and Peng (1996)
A good example of this thesis is the case of the Japanese social welfare system, particularly since the mid 1970s, where there has been a decisive divergence away from any Western pattern.” (p. 193)
In the other word, Japan not only has more experiences but also is more mature than Taiwan when regarding welfare system specifically but not exclusively long-term care. Thus, there would be no other countries more suitable than Japan to compare with Taiwan. More specifically, for these two countries to learn from each other.
The sense of welfare state is usually related to the elderly care. According to the book
“Hikaku fukushi kokkaron: Yuragi to orutanatibu” edited by Okazawa, N. and Miyamoto, T.
(1997), when it comes to conducting the research of comparing welfare state countries, it is usually about explaining the reasons behind the development of the welfare state by understanding the industrialization and economic growth or even socio-economic issues such as ageing population.
By comparing Japan and Taiwan that share the same welfare state regime, hybrid case, we would understand more about the socioeconomic issues of ageing population; more importantly, this thesis would finally propose some suggestions of the issue, financial sustainability, regarding long-term care.
2.1.2 Comparative Institutional Analysis
For this research, the instrument of comparative institutional analysis will be mainly utilized and therefore applied. This is also combined with the theory of welfare state. Also, specifically the ideations surrounding what constitutes as a “hybrid case” will be the core foundation for this research with regard to the comparative nature of the long-term care policies in Taiwan and Japan from the aspect of financial sustainability. Moreover, by using the instrument which oftentimes referred to as a document analysis and with the perspective of the economic development and the demographic structures, this research will explore the differences between Taiwan and Japan’s long-term care policies to propose some suggestions to Taiwanese government or other policymakers and analysts about the policy settings.
The comparative institutional analysis is used to show and analyze how institutions influence different outcomes. More precisely, institutions affect transaction costs (Coase, 1960;
North, 1990), which include the search cost, procedural and monitoring costs, even the cost of preparing project design documents. More importantly, a good institutional structure lowers the transaction costs. Thus, by implementing a robust policy in terms of financial affairs, comparative institutional analysis is a decent choice of approach.
Comparative institutional analysis combines a number of approaches from a broad range of disciplines including that of economics and political science to sociology and even public
applications will not only be a single integrated framework regarding the stabilization of the current systems comparatively. Rather, this research is also about and addresses issues surrounding the generating and the changing of policies, which include long-term care and the problems in which Taiwan and Japan face with an aging and declining population in the context of a micro and macroeconomic lens. Though compared to other comparative methods, comparative institutional analysis is relatively new, it is a one-of-a-kind research perspective.
In addition, it should be regarded as a theoretical framework, which has been recognized and utilized as a highly effective and useful tool for analysis by academics, policymakers, and other analysts concerned with political economic issues such as and related to the ones covered in this research. Furthermore, it is a unique and somewhat holistic lens through which to analyze and to apply comparatively between Japan and Taiwan. Especially, for long-term care policies from the new aspect of financial affairs because of the broad range of generalized fields that it can be applied to such as finance or stakeholder building for example.
There are two important points to verify or address for comparative institutional analysis that this research applies from a theoretical perspective generally speaking. First and foremost, to establish a sound policy in order to efficiently make good use of recourses and improve source allocations, remains a key element of policymakers within political economic institutions. Because of this or perhaps in spite of this, it is important to meanwhile acknowledge that it is difficult or nearly impossible to 100 percent be able to balance the gains and losses of political economic leaders, individuals who are using the institutional frameworks or mechanisms in which they need to obtain resources from, and the resources of the state at a quantitative level. In other words, the limitations of quantitative analysis at such a large and comparative level is quite daunting and would require too many variables with too many actors on too many levels with too much complexity to truly be able to meaningfully make any conclusions regarding the efficacy of long-term care policies without either becoming lost in
the details or losing the big picture altogether.
Instead, we could only hold bounded rationalities to choose and to induce the closest solutions. In other words, using institutional analysis and theoretical approach to generate abstract generalities so as to be able to apply theoretical applications to other cases in future research is just as important if not more important than mere number crunching. Furthermore, it is a better approach to extend regime analysis into some developing countries like Taiwan.
To conclude the highlighting of this epistemological point, comparative policy analysis requires a more abstract approach to be handled effectively.
Secondly, policies’ interrelatedness is another key or critically important factor when it comes to comparative institutional analysis. When an effective policy has been conducted or pursued in the past, analysts or policy makers expect a similar policy under similar circumstances to also be effective. Also, other policies to adapt to the original successful policy for the purpose of smooth and coherent policy applications so as to avoid inconsistencies, double policy applications or waste, and other wrinkles in the policy process that oftentimes tends to accentuate large and oftentimes ineffective or slow to act bureaucratic institutions in general. By applying the sense of interrelatedness, it becomes more helpful for the improvement of the economic policy research (M. Aoki, A. Greif & P. Milgrom, 2001). In this sense, the four aspects are selected: governance structure, service delivery, finance scheme, and sustainability scheme. In order to apply to the comparative institutional analysis, the framework of the Institutional trait is made in this thesis. (graph 6)
Graph 6. Theoretical Framework
Source: This research
These are the four institutional aspects. To be more precise, the four aspects including finance scheme, sustainability scheme, service delivery and governance structure are the 4 elements to compare with between Taiwan and Japan.
When it comes to finance scheme, from the book Ageing and Pension Reform Around the World: Evidence from Eleven Counties by G. Bonoli and T. Shinkawa (2005), it indicates that social insurance countries are facing the largest sustainability problems. In other words, social insurance pension schemes are controlled by government, and the bulk of the intergenerational transfer is performed on a pay-as-you-go (PAYG) basis, which makes the countries very sensitive to demographic change. For example, aged societies such as Japan is facing the issue of severe demographic change. In this sense, places with only a few citizens would be more difficult to carry out long-term care plans due to the lack of budget.
Institutional
On the aspect of long-term care that rely on tax policies, such as Taiwan, as mentioned above in section 1.2, though taxation now in Taiwan seems to have met the budget, it is rather controversial in a sense that oftentimes it is said to be neither a long-term scheme nor steady reform when it comes to financial sustainability. Hence, speaking of financial sustainability, it is worth digging deeper into the finance scheme in both countries.
Sustainability seems to be the main focus when it comes to financial affairs. Therefore, sustainability scheme is indeed one of the aspects in the institutional trait. For instance, the idea of social investment is said to be a decent way of saving the financial deficit of long-term care.
Letting private corporations and companies to invest in and to participate in the long-term care institutions not only solved the problems of insufficient funds but also attracted the human capital by industry investments. Furthermore, this innovates both the services and the technologies. In this respect, a better long-term care system would be built (J. Su, 2018). It would be further discussed in the Result of this research.
According to the research called Frameworks of Integrated Care for the Elderly: A Systematic Review by M. MacAdam (2008), she announced that in Europe and other developed countries, integrated care is seen as a key to improve financial sustainability. Integrated care is also known as integrated health and according to the definition from WHO (Technical Brief
According to the research called Frameworks of Integrated Care for the Elderly: A Systematic Review by M. MacAdam (2008), she announced that in Europe and other developed countries, integrated care is seen as a key to improve financial sustainability. Integrated care is also known as integrated health and according to the definition from WHO (Technical Brief