Abstract
In recent decades, numerous welfare states have implemented in-work benefits to ‘make work pay’ and tackle in-work poverty. To explain the adoption and institutionalisation of this instrument, studies tend to emphasise either socio-political demand or ideational influences as motivators of policy decisions. However, the relative importance of these causal logics, and the relationship between them, remains ambiguous. To advance this debate, this article examines in-work benefit reforms in two welfare states: France and the United Kingdom. Examining reforms from the late 1990s to the 2010s, findings suggest that policy change and convergence were driven by an ideational rather than a demand-based logic. Reforms were more strongly motivated by the shared interpretive frameworks of policymakers and their instrumental use of ideas (ideational power) rather than the demands of voters and organised interests. This finding on the specific drivers of in-work benefits contributes wider insights into the roles of ideas in public policy.
Keywords
Introduction
Are policymakers more responsive to their own ideas or to external social demands when deciding upon policy action? I examine this question in the case of in-work benefit (IWB) reforms in the United Kingdom and France. IWBs are social security or tax payments which top-up workers’ wages and for which being in employment is a condition of eligibility. Beginning with their appearance in Liberal (English-speaking) welfare states, since the 1990s a growing number of high-income countries have implemented IWBs, reaching around 20 by 2020 (Abbas and Robertson, 2023: 284). In many settings, these policies have become major pillars of financial support for workers, with average IWB spending in EU member states almost tripling from 0.35 to 0.95 percent of GDP between 2006 and 2016 (Abbas, 2020: 128). Amid post-industrial trends of job flexibilisation and downward wage pressures, IWBs have become a popular – yet arguably understudied – tool to combat in-work poverty and ‘make work pay’ (Immervoll and Pearson, 2009; Marchal and Marx, 2018).
As policies whose prime beneficiaries are usually low-income workers, the expansion and comparative fiscal protection of IWBs poses a puzzle for traditional welfare state theories. Confounding functionalist expectations, IWB presence or generosity does not appear to be correlated with differing levels of ‘problem pressure’ (such as in-work poverty) or labour market conditions like wage inequality (c.f. Allègre and Jaehrling, 2011; Immervoll and Pearson, 2009: 7–13; Matsaganis and Figari, 2016: 17–19). Similarly, counter to the expectations of both power resources theory and historical institutionalism (Korpi, 1983, 2006; Pierson, 2000), the diffusion and generosity of in-work benefits are not strongly associated with either partisan effects or welfare state regime types (Abbas, 2020; Pedersen and Abbas, 2022). Moreover, amid post-industrial politics of ‘permanent austerity’ and the expectation of the prioritisation of higher-skill and secure workers as per insider/outsider theory, precarious workers (‘outsiders’) should be unlikely targets of social policy expansion (Pierson, 1998; Rueda, 2006).
In response, scholars tend to explain policymaker preferences towards IWBs via either political demand-based or ideational causal logics. In the former, decision-makers respond to the social demands of voters and organised interests, while in the latter, they act upon their own ideas about appropriate courses of action. In Heclo’s (1974) language, both ‘powering’ and ‘puzzling’ may lead policymakers to support IWBs. However, several issues suggest the need for further inquiry. First, a lack of consensus remains regarding the primary driver(s) of IWB reforms. Some studies emphasise policymakers’ electoral motivations, others ideational factors, while yet others give largely equal weight to both. Resolving this ambiguity is necessary to identify likely conditions of policy introduction, expansion or reversal. Second, the specific dynamics of IWBs arguably remain under-incorporated in welfare state politics literature, leaving a gap in our knowledge of wider welfare reform processes. Finally, previous work could not take account of more recent conceptual developments in the ideational study of public policy, notably the framework of ideational power (Carstensen and Schmidt, 2016), which may help re-interpret how we understand this field.
To advance knowledge of the politics of IWBs, this article examines reforms towards these policies in France and the United Kingdom. These cases offer a focused test of demand-based and ideational logics because governments of diverse partisan stripes undertook similar reforms in otherwise quite different social protection systems. From marginal or absent beginnings, by 2016 around 6.5% of the UK workforce and 8.7% of French workers received IWB payments (Online Supplementary Appendix). In this context, the article seeks to ascertain which factors drove the common use and (partial) convergence of IWBs over two critical phases: new policy initiation (the introduction and expansion of in-work tax credits by centre-left governments at the turn of the century) and major policy adjustment (the efforts of centre-right and centre-left governments to (re)integrate IWBs with the social benefit system by the mid-2010s). 1 It asks: what drove policymakers’ common preference for, and decisions regarding, in-work benefits?
The article’s central finding is that IWB policy reforms were primarily determined by decision-makers’ ideational motivations rather than external demands from voters and organisations. Beyond confirming previous findings that executive actors can become disposed to new ideas and seek to act on them (‘puzzling’), it finds that policymakers also used forms of ideational power to actively exclude alternative proposals and ensure implementation of preferred reforms. This includes a dynamic not fully identified or explored in previous studies whereby reformers pursue IWB reforms even in the absence of overt socio-electoral support or where popular demand exists for alternative policies. Thus, while favourable political circumstances often facilitate IWB reforms, this article finds that in the selected cases a prior ideational preference among policymakers was the primary driver and a necessary (and sometimes sufficient) condition. A further implication for welfare state literature is that IWBs likely possess distinct political dynamics which cannot be assumed a priori from similar policy fields such as minimum income and active labour market policies. Regarding the wider politics of public policy, these findings generate the tentative hypothesis that under certain conditions – politically weak policy-takers, diffuse political demand and use of institutionally novel instruments – policymakers’ ideational preferences may determine change ‘from above’ rather than articulating social demands ‘from below’. This research also provides an example of how examining ideational power can increase our understanding of how ideas shape policy. Finally, the article’s insights contribute to ongoing debates about the nature of democratic representation and the extent to which political elites either follow ‘free will’ mandates or seek to respond to already-expressed citizen preferences (Castiglione and Johannes, 2018; Russo and Cotta, 2020; Disch, 2012). The remainder of the article is as follows. Section ‘Political Demand, Policy Ideas and In-Work Benefits’ reviews the main explanatory logics towards IWBs and outlines the argument. Section ‘Case Selection and Strategy’ introduces the cases and analytical framework. Sections ‘New Policy Initiation’ and ‘Major Policy Readjustment’ present results from France and the United Kingdom. The final section concludes the article.
Political Demand, Policy Ideas and In-Work Benefits
As noted, explanations of governmental preferences towards IWBs tend to emphasise either the roles of socio-political demand or policy ideas. In the first approach, governments ‘supply’ policies to meet ‘demands’ from voters and organised interests in order to gain their support and win or hold office. Their motivations are mainly instrumental and more closely resemble a ‘vote-seeking’ over ‘policy-seeking’ model of political behaviour (Strom, 1990). This logic finds echo in welfare state literature which explores how shifting alignments of organisations and voters provide parties with new incentives to expand policies to groups who face ‘new social risks’ like in-work poverty and labour market exclusion (Bonoli and Natali, 2012; Häusermann, 2010, 2012; Kersbergen and van Vis, 2013; Taylor-Gooby, 2004). For example, to explain divergent minimum income benefit reforms in Spain and Italy, Natili (2018: 127) found that overt demand from organised interests was ‘a necessary condition to have path departure and/or scheme institutionalization’ and that ‘in all the reforms analysed, political actors introduced measures to obtain support from a social group in particular, and sometimes also of the electorate’. Similar dynamics have been claimed regarding wage supplements, where ‘pro-IWB’ coalitions have formed at different points in countries such as Canada, France, Germany, the United Kingdom and the United States (Clasen, 2020; Clegg, 2015: 499; Myles and Pierson, 1997; Vlandas, 2013). Here, the properties of IWBs as simultaneously pro-employment and anti-poverty measures enhance their potential to generate ‘ambiguous agreements’ drawing together parties and social interests from across the political spectrum (Clasen, 2020: 2; Palier, 2005). Moreover, electorally, studies of several countries suggest that governments of both centre-left and centre-right adopted IWB policies to appeal to either potential beneficiaries or to the sentiments of wider social groups, such as by signalling the rewarding of ‘work’ over ‘welfare’ (Clegg, 2015; Howard, 1997: 142; Touzet, 2019: 253; Vlandas, 2013: 124). Relatedly, some centre-left parties have used IWBs – especially ‘tax credits’ – as electoral blame-avoidance tools when they perceive traditional welfare expansion to be unpopular (Clegg, 2015; McCabe, 2018; Touzet, 2019). Overall, following the demand-based logic, IWBs offer parties of both left and right variegated opportunities to garner political support as part of their vote- and office-seeking strategies.
Alternatively, the ideational logic posits that IWBs result principally from policymakers’ cognitive frameworks and assumptions. Here, the motivation behind reforms is more intrinsic and aligns with ‘policy-seeking’ behaviour (Strom, 1990). For instance, in numerous studies, IWBs have been attributed to the influence of neo-classical ideas which posit that individuals’ work-search decisions are sensitive to financial (dis)incentives generated by tax-benefit systems, as well as behavioural claims that individuals’ (inadequate) work ethic and benefit ‘dependency’ are causes of unemployment (Colomb, 2012; Cousins, 2014: 116; Grover, 2016; Millar and Bennett, 2017; Newman, 2023; Sloman, 2019, 2021). As an additional mechanism, and linked to the wider ‘activation’ turn in welfare and labour market policy, policy learning has been cited as a catalyst for the promotion and spread of IWBs. Here, the United States, the United Kingdom, the Organisation for Economic Cooperation and Development (OECD) and the European Union (EU) have been identified as key vectors of policy diffusion (Banks et al., 2005; Clegg, 2014; Deacon, 2000; Dolowitz and Marsh, 2000; Duncan et al., 2003; Peck and Theodore, 2001; Touzet, 2019). These studies align with findings of welfare-to-work and active labour market policy adoption that show policy learning and problem-framing processes were important to creating a motive and a perceived ‘need’ for reform (Bonoli, 2013; Clasen, 2000; Cox, 2001; Weishaupt, 2011).
However, here it is important to note that while research on other ‘new social risk’ policies provides insight into possible factors driving IWBs, we should exercise caution in assuming that wage supplements follow the same dynamics. For example, both Bonoli and Weinshaupt incorporate IWBs into their frameworks of active labour market policies (ALMP), grouping them with instruments seeking ‘positive incentives’ (Weishaupt, 2011) or ‘incentive reinforcement’ (Bonoli, 2013). Broadly, both argue that reforms were driven by policymakers’ learning and cognitive reassessments (‘puzzling’) combined with socio-political realignments and new political incentives (‘powering’). Elsewhere, Häusermann (2012) draws upon the redistributive function of IWBs to hypothesise these as a form of ‘needs-based’ support primarily backed by left parties in the same manner as minimum income benefits. However, while IWBs share some functions with ALMPs and minimum income benefits, they are characterised by unique functional mixes and institutional forms, and are targeted at workers rather than the unemployed. As a result, bespoke study of their ‘particular properties’ is necessary to identify their political dynamics and place these within wider political theories (Clasen, 2020: 1).
In summary, existing research suggests that both political demand and ideational frameworks likely matter for IWB reforms. While we would expect both to influence policymakers to some extent, their logics are in fact quite distinct and whether one or other is dominant reflect competing explanations of the nature and forces of change in this field. Yet in existing literature, in part due to the sheer variety of demand-based and ideational influences cited, we arguably lack confidence regarding which are the key determinants (or necessary conditions) of IWB policy decisions. To resolve this ambiguity it is necessary to undertake simultaneous empirical exploration of both ideational and political demand mechanisms in specific reform processes to determine the precedence, weight and interaction of each logic towards IWBs.
By taking such an approach in this article (see section ‘Case Selection and Strategy’), and based on the findings, the core argument developed is that an ideational logic of policy-making predominated over a demand-based logic in the cases studied. An ‘ideational logic’ entails two interconnected and overlapping processes. In line with some previous studies, policy actors’ own ‘puzzling’ processes shaped their preferences for IWB policies. Their cognitive frameworks acted as ‘intellectual maps’ (Béland, 2010: 148) shaping how they understood the causes of, and desirable solutions to, unemployment and poverty. Specifically, policymakers were influenced by an incentive-based paradigm which assumed that low financial incentives to enter work or increase hours generated by taxation and benefit withdrawal were a key driver of inactivity and poverty. As solutions, dominant policy networks arrived at a consensus that wage supplements could improve incentives, raise employment and tackle poverty in market-friendly and cost-efficient ways. However, second, and beyond the analyses of previous studies of this field, pro-IWB policy elites harnessed their own convictions and capacities to exercise two forms of ideational power (Carstensen and Schmidt, 2016): power through ideas (tactically persuading decision-makers and others of the desirability of their specific proposals) and power over ideas (the use of expertise and position to exclude alternative narratives or solutions). Conversely, policymakers’ preferences for IWBs and specific design choices usually did not respond to overt demands from beneficiaries, other voters or organised interests. Although the perceived political benefits of IWB policies facilitated their adoption, policymakers’ ideational preferences drove reforms even where identifiable political demand was weak. Rather than ‘puzzling’ and ‘powering’, the picture that emerges is one of ‘puzzling’ over ‘powering’ (at least in the demand-based sense of the term), with decision-makers often resistant to popular alternatives that went against the grain of their preferred policy rationales.
Case Selection and Strategy
To deepen insight of the competing causal drivers of IWBs this article traces reforms to wage top-ups in France and the United Kingdom from the late 1990s to the mid-2010s. The timeframe encompasses the period of new policy initiation (when in-work tax credits were introduced and expanded) and major policy adjustment (when IWBs reached their contemporary institutional design in each country). France and the United Kingdom provide robust analytical leverage to test the influence of competing explanatory approaches because similar reform trajectories took place in otherwise distinct social protection systems. Their comparison harnesses the logic of a most different systems/similar outcomes strategy (Lim, 2016): ruling out differing institutional inheritances as a likely explanation for similar policy reforms and ‘zooming in’ on potentially common demand-based and ideational drivers. In addition, selecting two cases and studying reforms cross-nationally and over time helps to account for other possible factors (variations in governing parties or macro-economic conditions) and thus increase confidence in the causal processes identified.
As background, prior to the 1990s France’s Continental welfare state mainly supported low earners via a generous minimum wage, automatic extension of collective wage agreements, and insurance-based social benefits (Bosch and Gautié, 2011; Concialdi, 2020; Palier, 2002). From the late 1980s means-tested benefits with temporary earnings allowances were expanded at the margins of this model, notably through the introduction of a national social assistance scheme in 1989, but no permanent IWB was present (Palier, 2002: 300). In contrast, in the United Kingdom’s post-war Liberal welfare state, the first IWB scheme was introduced by a Conservative government in 1971 (Sloman, 2016). The role of wage supplements was then expanded by Conservative governments in the 1980s and early 1990s, but these remained relatively marginal (Grover, 2016; Sloman, 2019). In parallel, insurance-based benefits were retrenched and wage-setting institutions scrapped amid labour market deregulation (Clasen, 2011; Deakin and Reed, 2000).
Contrary to these divergent trajectories, from the late 1990s governments in both France and the United Kingdom transformed wage supplements into a central instrument of social protection. Around the turn of the century centre-left administrations introduced in-work tax credits and greatly expanded the generosity and coverage of IWBs. Subsequently, over the late 2000s and early 2010s governments of different parties sought to (re)integrate IWBs into the social benefit system while keeping costs relatively constant. In France this entailed path-breaking policy change, while UK reforms transformed the previously marginal role of IWBs. As a result, by the mid-2010s both countries possessed IWBs that were means-tested on household income, administered as social benefits, and provided wage top-ups from the first hour worked (Table 1). From absent or marginal beginnings, and using conservative policy inclusion criteria and expenditure estimates, in 2016 around 8.7% of the French workforce and 6.5% of UK workers received IWB payments, equating to around 0.22% and 0.27% of GDP, respectively (author calculations, Online Supplementary Appendix).
Principal IWB Reforms, France and the United Kingdom, late 1990s – mid-2010s.
UK figures calculated by author and correspond to WFTC (1999), WTC (2009), and UC (2019). In-work expenditure statistics for UC are unavailable.
Source: National data sources, cited in Robertson (2023: 45–46).
French policy figures from Allègre and Ducoudré (2018).
As noted, following the most different systems logic, the distinct institutional legacies of the United Kingdom and France regarding policy support for low-income workers cannot explain governments’ subsequently similar preferences for, and use of, IWBs. The same applies to partisan cleavages. Over time, within each case, IWB reforms were spearheaded by social democratic, liberal and conservative governing parties, usually with cross-party support in principle. Macro-economic circumstances also appear to be weak predictors. This is surprising, as deterioration or improvement of GDP and unemployment have been identified as preconditions of unemployment benefit cuts and ALMP expansion respectively (Vis, 2009). Yet in the United Kingdom, the reform and the secular expansion of IWBs from the 1970s to 2010s bears little relation to the economic cycle (Sloman, 2019: 734). Within this article’s period of focus, centre-left governments undertook IWB expansion amid sustained growth during the early 2000s. Subsequently, over 2008–2012 centre-right governments pursued (mildly) expansive IWB reforms despite the Great Recession and when they were otherwise focused on fiscal austerity. The centre-left Hollande administration in France then introduced a further re-design and small expansion of IWBs despite stubbornly high unemployment and deficit reduction pressures. After the mid-2010s, although beyond the scope of this article, very changeable reforms then occurred amid rather stable conditions of gradual growth and falling unemployment (in France: major IWB expansion by the centrist Macron presidency; in the United Kingdom: cuts under a Conservative majority government, then a return to expansion under later Conservative governments). Finally, the shock from Covid-19 did not lead to major IWB reforms, unlike other welfare and labour market policies (Clegg et al., 2023). As such, while policymakers undoubtedly took account of prevailing macro-economic conditions, it seems that other factors mediated how these fed into policy decisions towards IWBs specifically.
Analytical Framework, Methods and Data
To simultaneously assess ideational and demand-based influences towards IWB reforms this article employs a modified Multi-Streams Analysis framework (Kingdon, 1984). A policy stream examines both problem-framing and solution-identification processes, focusing on the ideas and paradigms that influence the actors who drive reforms. As per Hall (1993: 279), paradigms are interpretive frameworks which shape understandings of policy problems, policy goals, and the instruments (or ‘solutions’) considered desirable. In the area of social protection the influence of an ‘incentive-based’ paradigm is considered likely to increase policy actors’ receptivity to IWBs, while alternative ‘entitlement’ and ‘attitudinal’ paradigms may or may not induce support for these policies (Table 2; Daigneault, 2014). In addition, the analysis is alert to instances where IWB proponents exercise forms of ideational power (Carstensen and Schmidt, 2016) such as tactical efforts to persuade decision-makers of their proposals (‘power through ideas’) or to exclude competing narratives and options (‘power over ideas’). Meanwhile the politics stream examines decision-makers’ electoral and strategic motives to support IWB policies as well the extent to which each reform reflects socio-political policy demands. Crucially, to parse the influence of different causal factors, analysis pays attention to event sequences, such as whether organised interests act as initial protagonists or belated consenters of IWB reforms (Korpi, 2006).
Social Security Paradigms and In-Work Benefit Lenses.
Original categories drawn and adapted from Daigneault’s (2014) Three Paradigms of Social Assistance and applied to IWBs by author.
The empirical analysis employs comparative process-tracing (Bengtsson and Ruonavaara, 2017) to elucidate the actors, debates, event sequences and decision-making processes leading to each reform studied. Data is drawn from circa. 45 semi-structured interviews with members of the policy networks involved in each IWB reform as well as other relevant policy stakeholders. To ensure consistency with participant preferences within each case, French case interviewees are anonymised while UK ones are not (see Interview List). Interview data is triangulated with primary documents (parliamentary records, media archives, official reports and memoirs) as well as polling data, administrative data and secondary literature. Unless otherwise indicated by a URL, media articles were sourced via the Factiva database. Data was coded and analysed thematically in N-Vivo and assessed within the analytical framework described above.
New Policy Initiation
UK: Tax Credits
In the late 1990s and early 2000s a Labour Party government introduced a series of tax credit programmes to support low-to-middle-income households. This marked a reversal from the party’s antagonism towards the idea of fiscal IWBs in previous decades (Grover, 2016, 132; Sloman, 2016, 234). These policies conserved the design of the pre-existing Family Credit IWB but were more generous and were administered by the United Kingdom’s tax authority rather than its social benefits agency. The first, Working Families Tax Credit (WFTC), was created in 1998. In 2002 WFTC was split into Working Tax Credit (WTC), which extended wage supplements to workers without children, and Child Tax Credit (CTC), a means-tested child benefit.
Policy Stream
Tax credits were designed within the UK Treasury by a network of advisers, civil servants and economists surrounding Gordon Brown, Labour’s chancellor (finance minister) from 1997. Various influences shaped this group’s preference for IWB expansion and fiscal administration. As context, in the 1990s the Labour Party moved ideologically rightwards, culminating in its re-branding as ‘New Labour’. Regarding labour market policy, this paradigm shift eschewed Keynesian demand-side stimuli and generous unemployment support to instead focus on fomenting labour supply expansion (‘activation’) as a means of tackling poverty and unemployment (Brown, 1999; Haddon, 2012a; Rhodes, 2000).
Amid this cognitive reorientation, the network around Gordon Brown came to view weak financial incentives to enter work as an important driver of poverty and economic inactivity. This was partly influenced by new research which suggested that a concentration of unemployment in ‘no earner’ households was being exacerbated by tax-benefit ‘incentive traps’ (Gregg, 1993: 32, 63). Treasury reformers were also inspired by the US Clinton administration’s welfare-to-work reforms, including expansion of the Earned Income Tax Credit (Dolowitz and Marsh, 2000; Pym and Kochan, 1998: 107; UK B and C). Before entering office, Brown began to argue that: ‘To help people move into work and to attack poverty in work . . . the tax and benefit system and the benefit tapers must be addressed’ (Brown, 1996).
Consequently, while Brown’s circle was motivated to reduce poverty, this was conditioned by the need to promote employment as the best means to do so. According to an economic adviser to Brown’s Treasury, tax credits were thus selected as a means ‘to get work into workless families’ (UK-B) and were one of a number of reforms intended to cut poverty by ‘making work pay’ (Bennett and Millar, 2005; Brown in Financial Times 2001). Furthermore, some proponents were at least partially influenced by the attitudinal assumption that a lack of ‘work ethic’ among the unemployed was a problem (Brown in: Brewer et al., 2002: 511; Taylor in: Social Security Committee, 1998; Blair in: Walker, 1999: 683). Reflecting this, branding IWBs as ‘tax credits’ and proposals to route payments through recipients’ wage packets were partly intended to induce ‘a potentially valuable psychological change’ in recipients’ attitudes (Taylor, 1998: 8).
Motivated by these rationales, the architects of tax credits also used their ideas and positions to dismiss alternatives. For example, in 1998 Gordon Brown side-lined proposals by welfare reform minister Frank Field to revive social insurance instruments (Bochel and Defty, 2007: 37). More broadly, those backing tax credits argued that more generous or unconditional out-of-work benefits would harm work incentives or ‘lock people into dependence’ (Blair in: BBC, 1997) while further raising the minimum wage – introduced in 1999 – was discounted due to the fear this would harm job creation (UK-C).
Political Stream
The preference for tax credits was also motivated by electoral considerations. Following successive defeats to the Conservative Party since 1979, during the 1990s the Labour leadership sought to court middle-class voters and right-leaning newspapers by avoiding being cast as ‘pro-welfare’ or fiscally profligate (Bevir, 2009, sec. 20; Clegg, 2015; Richards, 2010: 41). According to former Labour minister and chancellor, Alistair Darling, the perception that sections of the public viewed benefit recipients as ‘scroungers’ was also a consideration (UK-A). In response, Labour promised (or warned) that there would be ‘no . . . option of an inactive life on benefit’ (BBC, 1997) for those considered able to work.
Following this strategy, the ‘tax credits’ label provided political cover to frame welfare expansion as ‘taking less’ rather than ‘redistributing more’ to low-income groups (Touzet, 2019: 145). Brown even described WFTC as a ‘tax cut’ (HM Treasury, 1998). In addition, tax credits purposefully reinforced a narrative that Labour was supporting people to work rather than ‘choose’ to remain on welfare (HM Treasury, 1998, 2002; UK-C). This approach appeared to be politically successful, as despite differences over policy design, the main opposition parties gave their backing to the principles of tax credits (Hansard, 1999, cols157, 176–177).
Nonetheless tax credits cannot be primarily attributed to pre-existing political demand. Regular data on public attitudes to IWBs were not gathered until after WFTC’s introduction. British Social Attitudes (BSA) surveys subsequently show that while wage supplements for working parents enjoyed majority public support, around three-quarters of the public consistently opposed IWBs for workers without children – a core feature of WTC (Clery, 2016: 7). Moreover in the years preceding Labour’s election a clear majority of opinion supported higher taxation and social spending while a strong plurality felt unemployment benefits were too low (NatCen Social Research, 2023). Labour strategists’ image of a welfare-sceptic electorate and rejection of more traditional social policy expansion and may therefore have responded in part to their own perceptions rather than psephological reality (Touzet, 2019, 179).
Meanwhile, organised interests acted as belated consenters to tax credits. The Trade Union Congress’ then-General Secretary recalled the feeling among union leaders to ‘let Gordon [Brown] get on with it’ (UK-E). The Child Poverty Action Group (CPAG) made a ‘pragmatic’ decision to offer its support to be able to influence policy design (UK-G). From 1999 the lack of vocal support for tax credits led Brown’s team to seek to generate external political demand by privately encouraging anti-poverty groups to campaign for further expansion (UK-B; UK-G; UK-F). Moreover, to realise its preferred reforms, the government was willing to stand against opposition from business groups and gender equality campaigners to plans for payments be routed via wage packets and the main (often male) household earner (Godwin and Lawson, 2009: 186; Grover, 2016: 141; McLaughlin et al., 2001: 168).
France: Employment Bonus
Contemporaneous with UK tax credits, in 2001 a Socialist Party-led left coalition introduced France’s first permanent in-work benefit: the Employment Bonus (Prime Pour l’Emploi, PPE). The tax credit was paid annually, and due to its generous means-testing rules, reached a third of the labour force (Assemblée Nationale, 2001; Robertson, 2023: 48). Both as a fiscal instrument and as a wage top-up the PPE broke from pre-existing social protection norms and institutions in France (Morel et al., 2017; Palier, 2010: 85). As well as eschewing the use of the minimum wage or social insurance, it evinced a cognitive shift in French labour market policy from framing unemployment as a structural phenomenon to one where individuals might choose to be unemployed (Colomb, 2012: 48–49).
Policy Stream
The PPE can be traced to a network of civil servants, ministerial advisers and economists who in the late 1990s advocated for a permanent IWB, preferably in the form of a negative income tax (Colomb, 2012: 37; Touzet, 2019: 217). Several ideational processes influenced this group. First, following the introduction of France’s social assistance benefit in 1989 (the RMI) economists increasingly problematised the possible effects of ‘incentive traps’ on labour supply (FR-H). Relatedly, amid falling unemployment in the late 1990s, government advisers noted that social assistance rates remained constant while employers struggled to fill low-skill vacancies (FR-B, F and M). Third, the problematisation of ‘fiscal injustice’ and a concern with in-work poverty led the government to examine the social situation of low-paid workers specifically (FR-A, C and M). Finally, members of this network were inspired by OECD recommendations on stimulating labour supply and the policy examples of tax credits in the United Kingdom and the United States (Bourguignon and Bureau, 1999: 40; Pisani-Ferry, 2000: 121; FR-A to E).
These trends inspired academic and government reports which sought to measure the extent of ‘incentive traps’ in France (Bourguignon, 1998; Bourguignon and Bureau, 1999; Laroque and Salanié, 1999; Piketty, 1998; Pisani-Ferry, 2000). In response to findings of poor work incentives at (part time) minimum wages and high tax rates for low earners, the chief economic adviser to Prime Minister Lionel Jospin argued that ‘work must be made to pay’ in France (Muet in: Pisani-Ferry, 2000: 9). This narrative gained purchase among civil servants (especially younger cohorts with economics training) as well as Lionel Jospin and finance minister Laurent Fabius (FR-A, C to F). Publicly, Jospin claimed it was necessary ‘to eliminate the mechanisms which dissuade benefit recipients from taking up paid employment’ (Mabille, 1999).
As a solution, many advisers’ preference was for a negative income tax as proposed by economist Francois Bourguignon (1998). By summer 2000, the finance ministry and the prime minister’s office were actively studying various possible IWB measures (Mabille, 2000b; Muet, 2019). However, due to pressure from the left-wing of the Socialist Party, the government instead proposed a tax rebate for low earners (Mabille, 2000a; Muet, 2019). When this fell afoul of constitutional rules on equality of taxation (Conseil Constitutionnel, 2000), Jospin turned back to the idea of a tax credit and backed the PPE. The policy was framed as ‘to encourage the return to employment’ and boost the incomes of ‘modest’ workers (Reuters, 2001a, 2001b). It thus sought to address the various aspects of problem-framing cited above – incentive traps, in-work poverty, distributive injustice – while the choice of tax administration reflected the desire to emulate the EITC (FR-D). Due to internal pressure from left-wing opponents, a decision was taken to target PPE payments on full-time rather than part-time hours (FR-B).
Regarding ideational power, as well as actively persuading decision-makers of their proposals, pro-IWB actors used their influence to marginalise figures within the government and Socialist Party who opposed their narrative and solutions (Colomb, 2012: 38, 48; Riche, 1999). Drawing on neo-classical ideas, they made appeals to ‘common sense’ and suggested it would be ‘irresponsible’ for decision-makers to question that work incentives influenced employment behaviour (Colomb, 2012: 43, 46; Pisani-Ferry, 2000: 130). Relatedly, alternative proposals (such as higher minimum wages, alternative tax cuts, or non-employment conditional benefits) were rejected as inefficient and likely to have undesirable effects on job creation or work incentives (Bourguignon, 1998: 47; Pisani-Ferry, 2000: 132; FR-C).
Politics Stream
Politically, the PPE linked to Lionel Jospin’s strategy to create a new cross-class alliance ahead of the 2002 presidential elections. Regarding policy, this meant competing with the right for the loyalties of the middle classes (Jospin, 1999; Touzet, 2019: 209). To achieve this, the government sought to offer tax cuts to middle and higher earners and pursue fiscal restraint (also to meet EU spending rules) while still retaining the support of blue-collar voters (Robertson, 2023: 184–187). Given that Jospin’s cabinet faced pressure from the left for social policy expansion, his administration found itself performing a balancing act (Elise and Romain, 2001; Willerton and Carrier, 2005). In response, ministers identified some form of fiscal measure for lower earners as an attractive option. This catered to working-class voters while increasing the political room for manoeuvre to pursue middle-class tax cuts (FR-B to D). In addition, a tax measure would not involve overt spending, contributing to the image of fiscal responsibility (Touzet, 2019: 206–207).
However, there exists little evidence that Jospin’s government was induced or pressured to introduce the PPE itself by voter or actor demand. Clear public support existed in favour of various alternative tax cuts that would benefit lower or middle-income groups (Les Echos 2000; Maurin, 2001; Reuters, 2000a, 2000b). Meanwhile, due to a lack of available opinion data, it is difficult to argue that public opinion created demand for an IWB per se (Fabra, 2000; Touzet, 2019: 254). Indeed, no interviewee involved in the reform made reference to public opinion as a motivation.
Similarly, the notion of a tax credit (associated with US neoliberalism) was rejected by much of the traditional left, including some senior Socialist Party figures and the more ‘radical’ trade union confederations (La Tribune, 2001; Les Echos, 2001; Perucca, 2001). As a result, according to one of Jospin’s advisers, the prime minister ‘accepted it [the PPE] hesitantly because politically he felt that there wasn’t great support for the proposition’ (FR-B). Following the policy’s formal announcement, the government’s coalition partners (such as the Communist Party and Greens) and some left-wing Socialist Party figures remained openly critical. Conversely, the political right celebrated the PPE as a ‘capitulation’ to their agenda (Mabille, 2001; Perucca, 2001). Elsewhere, supportive trade unions and employer organisations provided belated consent to a course of action already set by ministers (La Tribune, 2001; FR-B).
Major Policy Readjustment
UK: Universal Credit
UK in-work benefits underwent another overhaul in the 2010s via the creation of Universal Credit (UC). Introduced by a Conservative-Liberal Democrat coalition (‘the Coalition’) which governed Britain 2010-2015, UC combined six means-tested benefits, including tax credits, into one monthly social security payment. The benefit was conceived by a policy network linked to the Centre for Social Justice (CSJ) think tank co-founded by former Conservative leader Iain Duncan Smith. The initial blueprint for UC was set out in a CSJ report entitled Dynamic Benefits (CSJ, 2009). A final version became policy after Duncan Smith was appointed to lead the Department for Work and Pensions (DWP) in 2010. UC’s legislation was passed in 2012, although took over a decade to fully implement.
Policy Stream
The idea for UC was developed in the context of the political right’s narrative of a ‘broken Britain’ afflicted by ‘social breakdown and dysfunctionality’ (CSJ, 2009: 4; SJPG, 2006: 13). The social security system was cast as a cause of this situation. Reflecting attitudinal problem-framing, UC’s architects claimed that ‘benefit dependency’ and a ‘culture of inactivity’ were drivers of poverty and unemployment (Brien: CSJ, 2009, 34; Duncan Smith, 2011; Freud: quoted in Sainsbury, 2014, 38). Incentive-based thinking was also an influence. The CSJ argued that despite previous reforms benefit claimants were still being ‘trapped’ by financial barriers to seek work or increase earnings (CSJ, 2009: 75–77, 83; SJPG, 2006: 25–26). In particular, UC’s proponents critiqued the purported inflexibilities of the weekly working hours thresholds required to receive tax credits and the bureaucracy of switching between in- and out-of-work benefits (UK-M). In doing so, the CSJ linked to the wider problematisation of ‘benefit complexity’ which had become a dominant theme of UK welfare debates (Timmins, 2016: 18–21).
The design of UC closely mirrored these problem-framing lenses. An overarching goal was simplification, as Neil Couling, a senior DWP official, explained: ‘the idea was: bring it together – one set of rules, one agency, clear incentives’ (UK-M). Second, by removing the minimum hours thresholds contained in tax credits, proponents aimed to ensure work ‘always pays’ and that claimants could engage flexibly with the labour market according to their and employers’ needs (Brien and Duncan Smith: Work and Pensions Committee 2011: EV 8, 31). Meanwhile, the attitudinal paradigm can be seen in the stricter benefit conditionality rules introduced alongside UC’s legislation and various design elements meant to encourage greater personal responsibility (Millar and Bennett, 2017: 175). Also notable (and somewhat contradictory with the promotion of flexible incentives) was the introduction of ‘in-work conditionality’ to compel in-work UC recipients to increase their hours (DWP, 2010: 31). Finally, policymakers eschewed expanding net IWB generosity, although the policy required initial fiscal expansion, including £2 billion for policy implementation (DWP, 2010: 51). Proponents hoped that the reform would cause more people to enter work and so reduce long-run costs (DWP, 2010; Work and Pensions Committee 2011: Ev 2).
To achieve their preferred reform, UC’s architects employed ideational power both ‘through’ and ‘over’ ideas. First, they successfully persuaded key political decision-makers. Following public pitches and closed-door meetings, both Prime Minister David Cameron (Conservative) and Deputy Prime Minister Nick Clegg (Liberal Democrat) – who shared the problem narrative underpinning UC – became convinced it could deliver on its objectives (Timmins, 2016: 24, 30; Clegg in: Walters and Carlin, 2010; UK-L; Freud, 2021). This was crucial to overcoming opposition from the Conservative chancellor, George Osborne, who felt UC was unfeasible and potentially costly (Freud, 2021: 119). Meanwhile, supporters of UC actively ignored or dismissed problem narratives which cut against UC’s rationale, such as the role of post-financial crisis labour market trends and low benefit generosity as causes of unemployment and poverty (CSJ, 2009: 31, 47–49; Duncan Smith, Hansard, 2011, col. 919; Duncan Smith in: Kirkup, 2011; Slater, 2012; Wiggan, 2012: 393).
Politics Stream
Political motives also facilitated UC’s adoption. The policy’s original conception aligned with the Conservative party’s objective in the late 2000s to ‘detoxify’ its image by showing that it took social issues seriously (Haddon, 2012b; SJPG, 2006: 18). After 2010, UC offered the Coalition credit-claiming opportunities as it otherwise implemented fiscal austerity following the 2008 financial crisis. Duncan Smith harnessed UC to portray the Conservatives as standing for taxpayers and ‘hard-working families’ in opposition to those who ‘give up and fall back on the state’ (Duncan Smith, 2010). For welfare reform minister, David Freud, UC helped to seize ownership of the poverty issue from Labour (UK-K). Meanwhile, according to the Liberal Democrats’ then-pensions minister, UC’s announcement was ‘the one good news story when we were squeezing other benefits’ (UK-L).
However, while UC’s narrative about ‘rewarding work’ aligned with welfare-sceptic public sentiment at the time (Curtice, 2009), there is little to suggest that electoral competition or political demand were primary drivers. Neither scrapping tax credits nor introducing UC were featured in the 2010 manifestos of either party which formed the Coalition, and the policy’s proponents were actively discouraged by future chancellor George Osborne from mentioning the idea ahead of the election (Freud, 2021: 84; c.f. Timmins, 2016: 25). Similarly, there is no evidence that lobbying from organised actors motivated UC’s protagonists or the Coalition. The blueprint for the policy was developed by the CSJ, and once Duncan Smith entered government, the DWP moved at breakneck speed to turn this blueprint into legislation. In response, some policy actors, such as CPAG, complained about a lack of consultation (Work and Pensions Committee 2011, EV 213). This is not to say that the policy did not enjoy external support. A consensus existed among the main parties and collective actors about the desirability of benefit simplification and clear incentives (c.f. Millar and Bennett, 2017: 169–170). However, beyond this, organised interests held varied positions on policy design or alternative preferences, suggesting that their positions were mainly reactive to a course of action already set by government (Robertson, 2023, 134–137).
France: Active Solidarity Income
In France, a first phase of major IWB policy adjustment took place in 2008 under the centre-right president, Nicolas Sarkozy (Union for a Popular Movement, UMP). The Active Solidarity Income (Revenu de Solidarité Active, RSA) was first proposed by a child poverty commission presided by Martin Hirsch, head of the anti-poverty charity Emmaüs (Commission, 2005). Ahead of the 2007 presidential election the RSA was adopted by both Sarkozy and the Socialist Party’s candidate. After the election, Hirsch was invited to join the government and implement the policy. The RSA comprised a social assistance benefit (RSA socle) and a new in-work benefit (RSA activité).
Policy Stream
The RSA’s architects were a group of social security specialists and civil servants linked to Martin Hirsh. They developed a critique of poverty and social security which focused on incentive traps and benefit complexity as core problems. In doing so, they followed contemporaneous UK welfare debates and were inspired by New Labour, viewed as a modern and technically-sophisticated centre-left (Damon, 2005: 3: FR-J; FR-L).
Crucially, Hirsch’s anti-poverty commission suggested that the main driver of child poverty was in-work poverty and a lack of sufficient earnings (Commission, 2005: 23; FR-I and J). These issues were attributed to ‘poverty traps’ generated by benefit withdrawal rates (FR-J, L and M). The commission presented microsimulations which showed low or negative incentives when moving to quarter or half-time hours at the minimum wage, and argued that ‘[the] social minima have become impassable maxima’ (Commission, 2005: 23–26). In addition, the commission argued that benefit complexity was muddying incentives (Commission, 2005: 26, 28). These concerns echoed an expert consensus on the need to reform or replace the PPE, which was criticised as ineffective incentive tool due to its annual payments and targeting on full-time hours (Clerc, 2005: 26; Cahuc et al., 2008: 77–78; FR-G, K and M).
As a policy solution, the RSA’s design reflected these problem frameworks. The reform’s goals included poverty reduction, work incentivisation, and benefit simplification (Assemblée Nationale, 2008; Commission, 2005: 24). To reduce poverty, the RSA expanded income support worth €1.5bn to eligible low-income workers, but gave no increase in generosity for those out of work (Assemblée Nationale, 2008). Meanwhile, unlike the PPE, work incentives were targeted on part-time hours (Damon, 2016: 3). Finally, the benefit rather than tax system was chosen for administration, partly because it was felt regular payments and case reviews led to more effective incentives and poverty alleviation (Hirsch, 2008b: 42; FR-J and H). Yet despite initial plans to integrate the PPE with the RSA, the two were kept separate following widespread opposition to the PPE’s elimination (as this would penalise lower-middle earners) including from within Sarkozy’s party (Auguste, 2008; De Longueville, 2008).
To achieve policy adoption, the RSA’s architects also employed ideational power tactics to persuade decision-makers and ward off competing ideas. Regarding alternatives, proponents argued that higher out-of-work benefits would worsen work incentives, while an increased minimum wage would be an inefficient anti-poverty tool likely to harm low-skill employment (Cahuc et al., 2008: 12; Hirsch, 2008a; FR-I and G). Meanwhile, Hirsch actively sold his reform as a measure to boost employment, encourage responsibility, and increase the economic efficiency of social assistance (FR-L and J). This proved effective, as the promise of a policy which could reward work and reduce poverty without encouraging ‘benefit dependency’ fit with Sarkozy’s own views (Cornudet, 2005; Hirsch, 2010: 26).
Politics Stream
Nicolas Sarkozy likely embraced the RSA for political as well as ideational motives. The policy buttressed his campaign messages about ‘rehabilitating work’ and ‘effort’, which appealed to target voter groups (Sarkozy, 2007: 7; Strudel, 2007: 467). IWB expansion likewise provided the UMP leader with a means to curry support among lower-income groups, filling a ‘hole’ in his campaign promise ‘work more to earn more’ (FR-I and J). However, it is less clear that concrete voter demand induced policy adoption. On the one hand, the public sentiment that social assistance risked discouraging work was increasing in the 2000s (Damon, 2009: 3), potentially created political incentives for the RSA (Vlandas, 2013). On the other hand, these trends may only have encouraged Sarkozy to move in a direction he ideologically supported, given that he had attacked ‘benefit dependency’ himself for many years (Gratien, 1999; Les Echos 1998).
Indeed, the Sarkozy government’s choices also ignored public preferences which cut against its ideational rationales. For example, in 2007 almost two-thirds of people favoured increasing social assistance while an overwhelming 82% backed large increases to the minimum wage (Associated Press, 2006; DREES, 2008: 5, 2022). Conversely, public opinion appeared merely accepting, rather than actively supportive, of IWBs. In a survey where people were asked to rank five options to ‘encourage minimum income beneficiaries to find work’, the second least popular was the notion of a permanent wage supplement (Croutte & Hatchuel, 2009, p. 25, Table 4). After the RSA had been publicly proposed, another poll found that only 27% of people viewed it as a ‘priority’, compared with 54% who felt the policy was ‘important but not a priority’ (AFP, 2008).
The evidence regarding organised interest demand is also ambiguous. Certainly, widespread actor support facilitated the policy’s adoption and passage. Interested figures within civil society, local government and public administration were instrumental in developing the RSA and building a political consensus for it (Hirsch, 2010: 95–96; FR-J and L). Over the key period of the RSA’s public debate a diverse support coalition coalesced comprising most of the partisan right and centre-left, the largest employers’ federation, the two ‘reformist’ union confederations, and most national anti-poverty organisations (Vlandas, 2013). On the other side, for different reasons, opposing actors included the Communist Party, some left-wing Socialist Party and right-wing UMP deputies, and the two more ‘radical’ union confederations. Yet among supportive interests, employers appeared disinterested or non-committal, while many anti-poverty groups and unions held alternative first preferences – such as wage and benefit increases – which were ignored (Robertson, 2023: 217–218; FR-I, K, R; ε, θ and κ.; Vlandas, 2013: 130–131).
France: Activity Bonus
In 2016 the French IWB system reached its contemporary form when the Socialist Party administration of President François Hollande merged the RSA activité and the PPE to create the Activity Bonus (Prime d’Activité, PA). This is a means-tested social benefit which is institutionally separate from out-of-work social assistance, the RSA socle (hereafter ‘RSA’).
Policy Stream
The impulse for further IWB reform emerged from two debates: expert dissatisfaction with existing IWBs and renewed political focus on poverty. Regarding the first, by the end of Sarkozy’s presidency in 2012 a broad institutional consensus viewed both the PPE and RSA activité as inadequate (Bourguignon, 2011; Cour des Comptes 2011; Gomel et al., 2013; FR-M to R). As mentioned, the PPE was considered problematic because payments were insufficiently targeted and too infrequent to act as an effective work incentive. On the other hand, the RSA activité was viewed as a failure because of its low take-up rate of 32% (Bourguignon, 2011: 51). In response, momentum built for a fusion which could combine the PPE’s high coverage and work-related image with the RSA activité’s targeting on marginal incentives and low incomes (FR-P and O). The catalyst for change then came from the Hollande administration’s new anti-poverty strategy. When this was published in 2013 it included a pledge to examine IWB reform (Fragonard, 2012: 63–35; Premier Ministre, 2013: 24). Subsequently, Socialist MP Cristophe Sirugue was appointed to lead a taskforce to design options. The government asked that any proposals involve no additional expense or create any losers (FR-O; Sirugue, 2013: 63).
Ideationally, those involved in the anti-poverty plan and Sirigue’s taskforce drew more strongly on an entitlement-based cognitive paradigm than had occurred towards previous IWB reforms in France or the United Kingdom. For both the taskforce and key ministers, benefit receipt and (in-work) poverty were driven by labour market precarity, not incentive traps or low individual motivation (c.f. social affairs minister Marisol Touraine: Leplongeon, 2012; prime minister Jean Marc Ayrault: Le Point 2014; Sirugue, 2013: 8–9, 37, 40). In response, reformers sought to reduce in-work poverty via improved IWB targeting, take-up and generosity (Assemblée Nationale, 2015: 176; Cusset et al., 2019: 4; Gomel et al., 2016: 3). This orientation was also reflected in the government’s decision to increase social assistance by 10% above inflation rather than only prioritise those in employment (Premier Ministre 2013). Nonetheless, incentive-based thinking remained influential: senior figures in the government’s anti-poverty plan and the Sirugue taskforce both expressed the need for any reform to include a ‘real work incentive’ (FR-N and Q).
The Sirugue taskforce proposed the Activity Bonus as its preferred solution. While this reflected the group’s aforementioned ideational frameworks, its framing (‘power through ideas’) was also designed to appeal to decision-makers’ own narratives and constraints. The PA was cast as pursuing largely the same objectives as current IWBs but more efficiently and within the same budgetary envelope (Journal Officiel, 2015, Art. L. 841; Sirugue, 2013: 80). However, policy design was aimed at significantly improving take-up compared with the RSA activité (thus likely leading to higher costs) including via the PA’s institutional separation from social assistance (Assemblée Nationale, 2015, 186–187; Sirugue, 2015, 18, 55; FR-N and O). Unlike the PPE, using the tax system for administration was rejected because reformers felt the social benefit system could be more responsive in calculating and providing regular payments (Sirugue, 2013: 51–52; FR-O and R). Partly in compensation for the PPE’s elimination (which would create some losers), the PA also contained an individual ‘bonus’ payment to provide greater support at full-time hours (Assemblée Nationale, 2015: 176; Gomel et al., 2016: 3).
Once the policy was adopted, ministers also employed ‘power over ideas’ to reject alternatives. Amid increasing unemployment, the government’s economy and labour ministers suggested that increasing the minimum wage would harm competitiveness and job creation (AFP, 2014b; Vignaud, 2014). In this context, labour minister François Rebsamen described the PA as an alternative means to ‘support wages and make work more attractive’ (AFP, 2014b). Conversely, given the prioritisation of fiscal restraint and ‘making work pay’, more radical tax-benefit proposals at the time (e.g. Basic Income or a full negative income tax) were also excluded from mainstream consideration (c.f. Coatanlem, 2013; Duvoux et al., 2014: 23–24).
Politics Stream
Beyond policy-based reasons, the PA’s eventual adoption followed serendipitous political circumstances. In mid-2013 Hollande initially postponed accepting the idea, seemingly due to concerns about cost and prospective losers from the PPE’s elimination (Mazuir, 2013; FR-R; AFP, 2013). However, in August 2014, an alternative plan to cut social security contributions for low earners was blocked due to constitutional equality of taxation rules, leading Hollande to embrace the PA instead (AFP, 2014a).
Electoral considerations and actor lobbying also facilitated policy adoption. In 2014, the government’s popularity was sliding among its core electorate, something attributed to growing discontent with unemployment, austerity and pro-market reforms (AFP, 2014c, 2015; Stephan, 2015). In this context, Hollande’s prime minister, Manuel Valls declared the PA was ‘above all a social justice measure’ which would ‘restore purchasing power each month to workers with the lowest incomes’ (AFP, 2014d). Moreover, unlike some previous IWB reforms, anti-poverty organisations provided overt demand. Collectif Alerte (a third sector umbrella body) had been an instigator of Hollande’s anti-poverty plan and its members were involved in the Sirugue taskforce. When the proposal for the PA was put on ice, this organisation demanded it be implemented (Le Nouvel Observateur, 2014). Furthermore, once announced, the PA benefitted from broad acceptance: the political left was mostly supportive, while employers appeared disinterested and only a few figures on the political right were opposed (Robertson, 2023: 238–243).
On the other hand, it would be too strong to say that prior political demand was the primary driver of the decision to introduce the PA. While the policy was popular when announced (two-thirds of the public were supportive), a massive 86% of the public also favoured an increase in the minimum wage, a measure the government rejected (Alimi, 2015; DREES, 2022). Likewise, due to fiscal concerns, the government rejected demands by the anti-poverty lobby to extend the PA to all working students and apprentices (Gasté, 2015). Ultimately, the government appeared only willing to countenance reforms which, while being of political utility, aligned with its wider ideational assumptions and economic policy objectives.
Discussion and Conclusion: Weighing Ideational and Demand-Based Drivers of IWBs
The preceding analysis examined the ideational and demand-based political logics which have influenced the conception and adoption of IWB policies in France and the United Kingdom. The findings strongly suggest that policymakers’ cognitive frameworks, combined with the use of forms of ideational power, played a determining role in decision-makers’ preferences and actions. In both countries, dominant networks of policy experts and makers appeared convinced that ‘incentive traps’ risked exacerbating unemployment and poverty and that improving incentives was a necessary solution to these phenomena. The underlying influence of an incentive-based policy paradigm therefore appears to have been a necessary condition for IWB implementation and institutionalisation. Moreover, in each reform studied, these shared interpretive frameworks were layered with context-specific issues and ideas which provided the idiosyncratic rationales shaping each IWB proposal. International policy transfer was also important, especially in the late 1990s and 2000s. Building on earlier research (Clegg, 2014), the experience of IWB reforms in France and the United Kingdom demonstrates how shared elite ideas can drive common policy paths in otherwise institutionally-distinct welfare states.
Crucially, proponents of IWB reforms did not only ‘puzzle’ but harnessed ideas strategically to achieve their policy objectives (Carstensen and Schmidt, 2016). IWB proposals were framed in ways designed to persuade key decision-makers (power through ideas) and active efforts were made to ‘filter out’ competing ideas (power over ideas). In these processes, pro-IWB actors likely also benefitted from a deeper and more difficult-to-detect form of ideational power: power in ideas (Carstensen and Schmidt, 2016). Here, reformers’ discourses tended to align with background ‘public philosophies’ (Carstensen and Schmidt, 2016: 329; Schmidt, 2008) of the economy and human nature which variably emphasised neo-classical and behavioural understandings of poverty as the common-sense terrain of specialist policy debate.
In contrast, demand-based political factors do not offer a convincing primary explanation of IWB policy choices. Certainly, the perceived electoral advantages of wage supplements across the centre-left and -right, and their ability to draw together ‘ambiguous agreements’, enhanced their attractiveness and facilitated their adoption. We can also detect an association between centre-left government and policy generosity, although centre-right parties were also willing to contemplate selective expansion. Ministers’ (often self-imposed) wider strategic or fiscal constraints contributed to narrowing the alternative options considered feasible. Yet governments always faced some degree of choice between possible interventions to support low-income workers. When decanting in favour of IWBs, mechanisms of socio-electoral demand played a subsidiary role. In few instances were voter or collective actor preferences for IWBs detected in advance of decisions to adopt specific policies. Process tracing reveals a pattern whereby IWB proposals were developed by elite policy networks and then adopted by political decision-makers, only after which organised interests adopted their positions and public reaction was registered by opinion polls. Lobbying by organised actors did sometimes then impact on final policy design. However, patterns of demand do not account for the intrinsic motivations of ministers to seek these reforms, their determination to achieve their policy objectives during instances of counter-lobbying, or their discounting of potentially-popular alternatives like minimum wage increases. In this regard, the selection of IWBs – and most of the design choices made – more clearly respond to the ideo-technical preferences of policymakers themselves. IWB policy changes reflected shifting currents in elite debates, rather than shifting actor and voter positions or other factors like macro-economic conditions.
These findings offer several contributions. Beginning with the politics of IWBs, as noted earlier, previous studies found that ‘puzzling’ processes are important (e.g. problem-framing and social learning). However, this research shows that ideationally-motivated policymakers also weaponise ideas via ideational power to achieve their policy preferences; and through close attention to temporal sequence and voter/actor preferences, may seek these policies irrespective of explicit political demand. It affirms that the existence of a pro-IWB elite consensus is a necessary, and sometimes sufficient, condition of reform, with the final shape of policies depending on context-specific technical issues and political negotiations. This builds on, and offers a step beyond, previous IWB research which identifies an important role for ideas without fully testing socio-political demand as a counterfactual (Grover, 2016; Sloman, 2019) or explains IWBs through combinations of ideational and political incentives without fully determining which were key (Clasen, 2020; Clegg, 2015; Vlandas, 2013).
Second, the research reveals causal dynamics of IWBs as a form of new social policy which are partially distinct from ALMPs or minimum income reforms. Regarding the latter, IWB policy-making does not appear to fit with the supply and demand models used to explain the political dynamics of out-of-work social assistance (Jessoula et al., 2014; Natili, 2019). Rather than being driven by ‘bottom-up’ patterns of political demand (especially from the left) IWB reforms have been driven by ‘top-down’ expert policy networks primarily concerned with labour supply expansion as a route to growth and poverty-reduction. At the same time, in contrast to ALMPs and other ‘active’ social policies (Bonoli, 2012, 2013; Palier, 2005; Weishaupt, 2011), political factors such as collective actor positions, ‘ambiguous agreements’ and electoral credit-claiming appear weaker determinants of reform.
Third, the findings contribute to scholarship about the role of elites and ideas in public policy (e.g. Bonoli 2013; Lindvall 2009; Béland and Cox, 2010; Blyth, 2003; Carstensen et al., 2022; Genieys and Smyrl, 2008; Schmidt, 2008). Extrapolating from the results, we can posit reasons which may increase the role of ideational motivations as determinants of policy change. In the IWB space, potential beneficiaries tend to lack socio-electoral power and often do not form organised constituencies which credibly demand specific policy interventions. In addition, as novel instruments operating between pre-existing benefit and tax systems, policymakers appear to enjoy a high degree of autonomy for institutional innovation and experimentation. Finally, in part due to the technical nature of some of the issues and policy options, voters and organised groups may not show knowledge, interest or coalesce around a concrete set of alternative demands. These conditions give ministers greater space to shape and implement reforms which fit with their own rationales. Based on this, we may tentatively hypothesise that in policy fields where decision-makers have a high level of discretion over the instruments used (perhaps due to their institutional novelty), there are politically-weak policy-takers, or organised interests are not crystallised around a clear set of alternative demands, that decision-makers will have greater scope to pursue their own ideas in setting policy action. At the same time, the absence of these conditions is unlikely to fully close down the role of ideas as determinants. This article found that even where alternative demands were expressed – like support for minimum wage increases – decision-makers still made policy choices in line with their own cognitive preferences. Research into additional cases and policy fields could therefore test the importance of these conditions for enhancing or constraining policymakers’ ideas and ideational power as determinants of policy change.
Finally, this study demonstrates how the relatively novel conceptual apparatus of ideational power can increase our insight into how ideationally-motivated actors achieve identifiable policy impacts. This moves beyond simply establishing that ‘ideas matter’ to further delineating the conditions and means through which ideas shape policy. Such observations call for further attention on the causal effects of ideational processes on policy stability and change, including as drivers of institutional path-departures in other policy spheres of the welfare state.
Supplemental Material
sj-docx-1-psx-10.1177_00323217251340856 – Supplemental material for Ideational Power or Political Demand? Tracing the Logics of In-Work Benefit Reforms in France and the United Kingdom
Supplemental material, sj-docx-1-psx-10.1177_00323217251340856 for Ideational Power or Political Demand? Tracing the Logics of In-Work Benefit Reforms in France and the United Kingdom by Ewan Robertson in Political Studies
Footnotes
Acknowledgements
I thank the anonymous reviewer and Professors Daniel Clegg and Jochen Clasen for feedback on earlier versions of this article. I also wish to thank discussants and attendees of the following sessions which discussed versions of the research and working paper: the early career social policy network and the Work, Economy and Welfare research group at the University of Edinburgh; the ESPAnet Virtual Workshop series; the IGOP workshop on Comparative Social and Public Policy at the Autonomous University of Barcelona (26 April 2024); and the Social Policy Association Conference (6 July 2023).
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship and/or publication of this article: This research was supported by an Economic and Social Research Council + 3 PhD studentship award. Fieldwork was also supported by an Erasmus + Traineeship Grant.
Supplemental Material
Additional Supplementary Information may be found with the online version of this article.
Interview List Online Appendix: Expenditure, Coverage and Caseload Data of UK and French In-Work Benefits UK Households Receiving IWB Awards 1971-2018/19 (by policy type) UK Expenditure on In-Work Benefits No. of IWB Recipients in France, 1998–2019 Expenditure on In-Work Benefits in France 2001–2019
Notes
Author Biography
References
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