Feedback Effects and the ‘Hidden’ Liberal Welfare State

Dr. Adam Hannah

The concept of ‘policy feedback’ has been of ongoing concern for scholars of the welfare state. Initially presented as a mechanism underpinning a generalised, and unexpected, resilience of welfare policy, debate over the extent and causes of change and resilience has been ongoing. The existing literature has largely focused on the mobilisation of particular groups to protect arrangements that benefit them. However, several recent cases have demonstrated that, even where there are widespread declarations of ‘crisis’, proposals for change may elicit opposition well beyond current or soon-to-be beneficiaries.

This paper seeks to examine broader modes of policy feedback through an analysis of health care policy in the United States and housing policy in Australia. It argues that the more fragmented and ‘hidden’ welfare arrangements that characterise these welfare states have two key consequences. First, they create ‘thin’ structures that mitigate social risk, but place ultimate responsibility with the individual rather than the state. So, while in the United States tax arrangements encourage the provision of private health insurance by employers, little is done to guarantee the continuation of coverage when employment is lost. Second, they create linkages between social risks across policy areas, with precarity in one area potentially translating to others. For example, in Australia, home ownership and property investment have been closely linked with retirement security. The analysis suggests that proposals for change are left vulnerable to the perception of disruption of the path to security, even among those who may in fact benefit from reform.