The Bigger the Better?

Abstract

The purpose of this article is twofold First, focusing on sickness insurance programs in eighteen OECD countries, the article seeks to answer whether higher spending levels also are associated with higher quality of the benefits being provided The answer to this question is partly positive: there is a tendency that bigger also is better Second, by using pooled cross-sectional data for 1960-85, the study explores if the distinction between spending levels and 'social rights' makes a difference when analyzing the determinants of welfare state growth. The study demonstrates that the choice of dependent variable considerably affects the results. Estimates pertaining to various political factors are particularly sensitive to the choice of dependent variable In the case of benefit levels, political factors appear important, whereas when analyzing spending rates, their impact appears to be negligible. This finding may explain the many inconsistent results in recent research on the growth of the welfare state

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