The more narrowly a welfare state targets benefits on the poor, the less redistribution and poverty reduction it achieves.
Korpi and Palme reported it across rich democracies in 1998. The mechanism they proposed is political: universal programmes make the middle class a beneficiary and therefore a defender, which produces larger budgets, while targeted programmes serve a constituency too small and too weak to protect them. Per pound spent, targeting redistributes more; per country, it comes with far less to spend.
In practice
- A government replaces a universal benefit with a means-tested one, saves money in the first year, and finds the budget cut again every year after, because nobody with a vote minds.
- A charity serving only the poorest struggles to raise money that a service used by everyone raises easily.
- Possible explanations
- The proposed explanation is political: universal programmes make the middle class a beneficiary and therefore a defender, which produces larger budgets, while targeted programmes serve a constituency too small to protect them.
- In its favour
- The political mechanism is well supported, since programmes with broad beneficiaries are demonstrably harder to cut, and the original cross-country pattern was striking.
- Against it
- Studies using different measures of targeting often fail to find the relationship and some find it reversed in recent decades, so the correlation is weaker than the mechanism behind it.
- Standing
- Contested. Studies using different measures of targeting often fail to find the relationship, and some find it reversed in recent decades. The political mechanism is better supported than the correlation.
- Subject
- Law & Politics
- Essay
- Competing accounts of how power works