Abstract: Business and the Welfare State: Bringing Power Back In—A Literature Review

Thomas Paster


For many years, comparative and historical research on the welfare state relied on the assumption that business interests oppose public social policy. In recent years, a novel strand of research developed that stresses the positive contributions of business interests toward the adoption and expansion of public social policy. Yet, the extent and the sources of business support for public social policy remain disputed. This paper provides an overview of major theoretical perspectives dealing with business and the welfare state and evaluates their validity based on studies of historical as well as current welfare state politics. The paper shows that the factors expected to shape business attitudes toward social policy are diverse and often contingent on specific political and economic conditions. The paper suggests that an analysis of preferences needs to be complemented by an analysis of variation in business influence to understand the impact of business on welfare politics.