Social policy, legitimation and diverging regional paths in Belgium

How federalism influences welfare spending: Belgium federalism reform through the perspective of the synthetic control method

“…Put differently, based on our analyses, we conclude that if Belgium had not introduced the reform, the country would have faced a further decrease in welfare spending after the reform, rather than the observed stability. Going more deeply into the case, we were further able to show that the new constellation of competencies in the field of social policy provided subnational units with opportunities to use social policy as an instrument to strengthen subnational legitimation and identity building (Dupuy & Van Ingelgom ). This strategy – mainly used in Flanders and fuelled by Flemish nationalism – has led to new subnational social policy programmes in the areas of health care, tax relief and child allowances, which, however, do not replace, but rather supplement existing policies at the central level (Beyers & Bursens ).…”

“…Hence, while the nationalist movement and particularly the Vlaams Blok played an important role in putting social policy on the agenda and in politicising the issue in the context of federalisation, we cannot conclude that the rise of this far right party as such is related to higher welfare spending after the 1993 reform. However, this short discussion shows that social policy was used by Flemish parties to strengthen nationalist arguments, which after the 1993 reform could be exploited to increase regional identity and legitimacy (Dupuy & Van Ingelgom ). This conclusion also is in accordance with Béland and Lecours’ (: 228) argument that the federalism reform stimulated nationalism as a form of politics.…”

“…In particular, the communities’ competencies with respect to social policy need to be mentioned, meaning that the Flemish‐, French‐ and German‐speaking communities now possess exclusive autonomy for health and family policy and other welfare state domains (Cantillon et al. : 1035; Deschouwer : 60ff; Dupuy & Van Ingelgom : 204ff). By contrast, the social security system remains largely at the federal level (Baudewyns & Dandoy ; Cantillon et al.…”

“…The communities finance their welfare state expenditures through centrally levied taxes, and they do not have any tax‐ or finance‐related competition. This constellation provides incentives for subnational entities to spend on social policy and to use these programmes as a source of subnational legitimation and identity‐building (Dupuy & Van Ingelgom ). Moreover, the incoherent division of power (De Rynck & Dezeure : 1028) also more generally provides negative cost‐saving incentives.…”

“…In the Belgian institutional order, the year 1993 constitutes a major break that offers ideal opportunities for investigating the causal effect of this reform on welfare state development. In the logic of a natural experiment (Dupuy & Van Ingelgom : 198), the introduction of a federal state structure is considered to be an institutional treatment that can be expected to causally influence welfare state development. Hence, and more precisely, the present study asks whether the Belgian institutional reform of 1993, which imposed a federal state structure, has influenced the subsequent welfare state spending of the country .…”