Welfare state dystopia and the response of the law: An agenda for the 21st century A brief editorial introduction

Introduction

Recent incidents and scandals involving data-driven fraud policies have highlighted structural weaknesses in the quality of contemporary welfare states. Bureaucracies which increasingly rely on digital infrastructure turn against their citizens, who suffer repressive regulations and sanctions, unforgiving recovery practices, discriminatory forms of profiling and rigid exclusions. These practices particularly target those in marginalised situations who strongly rely on welfare provision.

In this Special Issue, the problems highlighted by the scandals are associated with a dystopian threat from the welfare state. Of course, welfare state dystopia is not a clearly defined concept. In his 2019 report, Philip Alston, then UN Special Rapporteur on extreme poverty and human rights, warned of the rise of a ‘digital welfare dystopia’ in which automated technologies deepen poverty, erode individual freedoms and undermine human rights. ¹ While digitalisation is often justified as improving efficiency, reducing costs and streamlining services, the report argued that the digital welfare state also has serious downsides, especially for vulnerable populations: exclusion, privacy concerns, algorithmic bias and discrimination, and excessive corporate influence.

In this Special Issue, the term ‘welfare state dystopia’ is discussed in connection with such digitalisation concerns. The issue also, however, considers the trend towards greater conditionality in social security, leading to a proliferation of duties for claimants, increasingly strict sanctions and recovery practices, and a general disturbance of the balance between rights and obligations in social security. This second trend can be referred to as the rise of the repressive welfare state. ²

A further characteristic of the dystopian threat is the lack of judicial protection experienced by citizens in the wake of the many social security scandals. Internal review procedures and judicial control do not come to the rescue of citizens, nor are they capable of preventing scandals. These safeguards rather operate to legitimise the malpractice, pointing to a failure of the constitutional system of checks and balances. ³

It is the combined negative implications for citizens of digitalisation, the repressive welfare state and the lack of legal protection which form the constituents of welfare state dystopia, as referred to in this Special Issue. Indeed, most of the authors examine these three dimensions when referring to the notion of dystopia.

The past scandals, and those still emerging, have led to a great deal of soul searching, with questions such as: How is it possible for these affairs to occur? Why did nobody intervene? Are the politicians the main culprits? Is the widespread dependence on digitalised systems to blame? Is there something wrong with the system of checks and balances and the rule of law in general?, etc. Such questions not only come up in the many independent public inquiries taking place in the aftermath of the scandals, but have also sparked a surge of new academic research.

The purpose of this Special Issue is to showcase some of the new research that has sprung up in the aftermath of the scandals. The overarching questions are: What root causes underlie the dystopian threat of the welfare state, and how can the law respond to it?

The volume brings together a number of contributions from senior researchers and PhD candidates from the Netherlands, Norway and Ireland. The authors discuss scandals that have occurred in these countries and in the UK (the ‘Toeslagenaffaire’ in the Netherlands, the ‘NAV scandal’ in Norway and the ‘Carer’s[)11] allowances affair’ in the UK), drawing parallels with cases in other parts of the world, such as the major Robodebt scandal in Australia. In doing so, they consider a variety of cross-cutting issues, such as the system of checks and balances in the welfare state, the standards of privacy protection and the response to discriminatory algorithmic profiling. The authors have been primarily selected for their academic work and not necessarily because of their geographic locus in North West Europe.

The first drafts of the contributions were discussed at a panel during the annual Conference of the Council for European Studies, held in Lyon in July 2024. The papers were discussed by two accomplished authorities on the rule of law in the welfare state: emeritus professor Dr Terry Carney from Australia and professor Dr Marc Hertogh from the Netherlands. We are indebted to them, as well as to the peer reviewers who read through the contributions to this Special Issue, a thankless but nonetheless crucial activity for the success of a project such as this.

Structure of the Special Issue

This Special Issue is structured in three groups of contributions.

It opens with two general contributions on the theme. These are the first chapter by Gijsbert Vonk on welfare state dystopia as a challenge for the fundamental right to social security, and Maarten Bouwmeester's contribution on the system of checks and balances in the welfare state. The first contribution seeks to expose a normative shortage, a human rights void, in which the many social security malpractices are allowed to arise and proliferate; the second contribution seeks to trace the causes of malpractice –, exemplified by the Robodebt case in Australia and the childcare benefits scandal in the Netherlands – in the undermining of the rule of law by digitalisation and repressive policies.

Second are two contributions which describe and analyse national scandals concerning the welfare state. Thus, Elizabeth Kiely and Catharina Swirak focus on the UK Carer's allowance overpayments debacle. This case, which left many carers in financial difficulty and mental distress, has not yet been covered extensively in academic literature. Ingunn Ikdahl and Christoffer Conrad Eriksen analyse a Norwegian scandal. The Nav scandal led to widespread miscarriages of justice, resulting in prison sentences, fines and benefit recoveries for European migrants on invalidity benefits who had not declared their absence from Norway. The case sent a shock wave through Norway but has been less covered in English-language publications.

Thirdly, the other three contributions deal with specific questions relevant to the response of the law to welfare state dystopia. Thus, Wessel Damen analyses the role played by data protection law in setting the scene for some of these dystopias. This article investigates whether the EU data protection law framework, specifically the way it plays out in the field of social security, can be considered a factor in the rise of data-driven bureaucratic injustice. Anne Spijkstra is interested in strengthening procedural guarantees for social security claimants and investigates the possibilities for extending the safeguards of Article 6 ECHR to benefit sanctions, even though such sanctions are formally not considered to be based on a criminal charge within the meaning of this article. Finally, Lucas Haitsma examines the risk of discrimination flowing from the use of algorithmic systems. Through an analysis of the practices in two social security agencies in the Netherlands, he offers insights and recommendations on how to enhance mitigation strategies and prevent unjust outcomes in the digital welfare state.

Main findings

In analysing the root causes of welfare state dystopia, a common thread runs through all the contributions: how digitalisation and the repressive welfare state reinforce each other’s negative impact on citizens and on the constitutional system of checks of balances. As extensively analysed by Bouwmeester in this Special Issue, the convergence of these two trends undermines the efficacy of control mechanisms throughout the ‘lifecycle’ of the rule-of-law system.

This effect can be seen in the analysis of both the Norwegian Nav scandal and the British Carer's allowance affair. At first glance, the Nav scandal seems to be entirely related to the introduction into invalidity benefit legislation of strict conditions not taking into account the law applicable to the European Economic Area (EEA), which Norway is bound to respect. Yet Ikdahl and Eriksen stress that digitalisation also had a role to play. The authors observe that from the late 1990s, a set of specific topics received increased political attention in Norway: the sustainability of the welfare state, the risk of welfare fraud, and the export of welfare benefits. This was not all, as in parallel, technological digital development leading to increased access to data provided new tools for hyper-effective governance and monitoring of citizens. Thus, conditionality and digitalisation colluded together to harm the individuals concerned.

Similarly, while Kiely and Swirak hypothesise that the causes of the UK Carer's allowance scandal are rooted in the phenomenon of structural violence in the British welfare state towards poor citizens who are deemed undeserving, they too find that digitalisation and the repressive welfare state are mutually exacerbating factors. Or, as they put it: ‘Using surveillance to detect rule violations and to impose punitive sanctions results in a range of significant social harms caused to people, who do not have the capacity to abide by the rules, may find the rules difficult to understand or impossible to comply with, while surviving on the margins.’

In conclusion: the repressive welfare state and increasing digitalisation are separate flows, which, once they come together, form a swirling maelstrom that drags everything along with it, including the protection which the legal system is supposed to provide to individual citizens.

An agenda for the 21st century

The foregoing confronts us with the question of whether failures in judicial protection and the constitutional system of checks and balances are unavoidable characteristics of welfare state dystopia? Or are improvements to the law and the legal system an effective solution? Kiely and Swierak seem to be rather pessimistic in this respect. They consider that the fight against welfare state dystopia is a mammoth task which commands the attention and action of a broad coalition of actors: non-governmental organisations, advocates and activists, journalists, politicians and auditors. Law has no separate role to play.

Likewise, Ikdahl and Eriksen do not look to legal remedies, such as new rights or principles, to resolve the issue. In short, their lesson is that the public administration faces particular challenges in contexts where specific topics receive increased attention as problems that the political system seeks to resolve, at the same time as new technological development enables the administration to employ new and hyper-effective digital tools. In such a context, it is essential that the administration be aware of increased risks of loss of neutrality and loyalty to formal rules and regulations, when seeking to implement political will with hyper-effective digital tools. If these risks are not taken seriously, the administration may end up facilitating a system in which the rule of law is ignored, and individuals are sacrificed on the altar of efficiency.

This lack of ‘legal leverage’ to combat welfare state dystopia may not necessarily be disputed, but this does not negate the law’s responsibility to look for improvements. Thus, in his contribution, Vonk proposes a number of qualitative guarantees for broadening the interpretation of the right to social security to include contemporary challenges: compensation, elevation and participation.

The remaining authors’ proposals for improvement should be read in this light. Valuable suggestions have been made as to how the legal system could respond more effectively to the threat of welfare state dystopia.

Damen criticises the lack of hard legal guarantees offered by the GDPR. In his view, data-driven injustices in the domain of social security are the result of the most vulnerable and least vocal members of society being submitted to experimental digitalised and automated bureaucracy, without proper guarantees for the protection of their rights. His contribution formulates four concrete proposals to clarify, substantiate and improve the legal safeguards that European data protection law can offer against data-driven social security dystopias. The first of these proposals focuses on the GDPR criterion of ‘suitable measures’ when disapplying the right, in Article 22(2) GDPR, not to be subject to automated decision making. The remaining proposals have explored the option of stricter interpretations of three proportionality clauses already existing in the GDPR: Article 6(3) GDPR concerning the lawfulness of the processing; Article 6(4) GDPR on the limits of the principle of purpose limitation; and Article 23 GDPR, which states that the essence of fundamental rights must remain intact when disapplying data subject rights.

Spijkstra argues for better procedural guarantees for citizens who are confronted with benefit sanctions. Currently, benefit recipients sanctioned in the welfare system are in a precarious situation, caught between securing procedural fairness and slipping into a dystopian reality. They have little control over which of these paths unfolds, as this largely depends on whether they are sanctioned for fraud or misuse, determining whether punitive or benefit sanctions are imposed. If benefit sanctions are imposed, certain additional protections offered by the criminal limb of Article 6 of the European Convention of Human Rights, such as the presumption of innocence, the right to an interpreter, and a full judicial review, could ensure a fairer process. These safeguards address the culpability of the citizen, procedural fairness and the proportionality of the sanction, while limiting administrative discretion regarding procedural protection.

Haitsma seeks improvements to the governance regime designed to combat discriminatory algorithmic practices. Thus, in his view, it would be beneficial for the legislator to require reporting on risk governance related to both rule-based and complex algorithmic profiling systems. This could include reporting on relevant policies, protocols and process descriptions, assessment methodologies, and reflection mechanisms such as periodic evaluations of compliance, policies and assessment systems. Such reporting obligations could promote transparent and mature risk governance, by ensuring risk governance for both types of systems, facilitating cross-agency learning and providing external parties – such as citizens, supervisory authorities and courts – with greater insight into the responsible use of algorithmic profiling systems.

In their own way, each of these proposals has made a small contribution to keeping the house of the law in order. May this Special Issue provide inspiration for further introspection into improvement of the law.