40 Pages Posted: 3 Feb 2000
Date Written: January 2000
This paper is the first of two addressing the political economy of welfare policy and welfare reform in modern democratic societies, and especially the United States. The paper begins with the observation that ordinary voters and academic theorists often disagree about how society should reallocate economic resources. Numerous voter surveys show that the populace overwhelmingly supports policies that maintain a distinction between the deserving and undeserving poor, with "desert" turning on whether needy persons have made enough of an effort to become economically self-supporting or, even more broadly, whether their poverty is their own "fault." Academic theorists view the deserving/undeserving distinction with suspicion. Their disfavor is based on the judgment that the distinction is unfair in practice under current conditions or that it cannot be justified on first principles.
Employing ideas from evolutionary psychology and game theory, this paper seeks to understand the durable popular consensus about who "deserves" public assistance. It suggests that poor relief and other public programs of economic redistribution are best modelled as a mutual aid or insurance game along the lines described by the economist Robert Sugden, among others. In the mutual aid game, all players are expected to contribute to a common pool fund (that is, to serve as "donors") unless they fall victim to a misfortune, in which case they are entitled to become "recipients" by drawing funds out of the common pool. One equilibrium strategy for playing a reiterated version of this game is "strong reciprocity," in which players serve as donors only when others do as well, and players punish those who fail to donate by refusing to allow them to receive assistance on a subsequent round of the game. The paper argues that, by definition, this strategy rules out permitting players to choose on their own motion whether to contribute or to receive "welfare" or support from others. Individuals who fail to pay into the fund, despite being able to do so, or who seek to receive money without donating are punished by other players' refusal to cooperate with them until they resume "playing by the rules."
The mutual aid game, which seeks to maintain a viable common pool asset, is plagued by collective action problems. As with the prisoner's dilemma, it is always in a player's interest to defect or fail to cooperate by withholding his share if he lacks the means to control others' actions and punish free riders and has no assurance of mutual cooperation. In the absence of a centralized authority with the power to coerce compliance, a self-regulating mechanism is needed to coordinate an informal, voluntary, mutual aid scheme. That mechanism must facilitate the widespread adoption of a strategy of strong reciprocity, which is to the players' advantage only if virtually everyone plays by those rules. This paper argues that a strong reciprocity norm can be enforced through a repertoire of reactive attitudes that are a widespread feature of human psychology and the product of evolutionary forces. The claim is that these reactive attitudes have evolved to facilitate and stabilize the spontaneous creation of mutual insurance cooperatives that serve as a hedge against the risk of participants' misfortune.
The paper argues that similar reactive attitudes will be elicited and play a role in the political response to modern governmental policies designed to accomplish the same purpose as informal arrangements of mutual support. In shaping policies of poor relief in particular, and social insurance in general, majoritarian or democratic politics provides an avenue for expressing the attitudes of displeasure against those who are seen as "taking advantage of the system" by drawing on common assets and failing to contribute to those resources when they are able. The same resentments against those perceived as unworthy, which arise to guarantee the integrity and continuing survival of voluntary organizations that help unlucky members, are also likely to influence the structure of welfare programs shaped by a majoritarian political process. The 1996 welfare reform legislation, which incorporates a strong work requirement designed to distinguish between the "truly needy" and those capable of self-help, exemplifies this tendency.
The paper concludes with a discussion of the implications of these observations for the longstanding question of whether public assistance for the poor in a liberal democracy should be elevated to the status of a constitutional right or should be relegated to the ordinary political process. In arguing in favor of ordinary politics, the paper first suggests that, to the extent constitutionalization is directed at ruling out policies that incorporate any deserving/undeserving distinction, it would almost certainly have little effect. The institutional characteristics of the judiciary, majoritarian influences on constitutional construction, and conventions that dictate broad and vague constitutional drafting, would likely render unconditional protections for the welfare interests of the poor ultimately powerless against the currents of popular politics.
The paper also suggests that conservative arguments condemning all government involvement in welfare programs misunderstand the built-in safeguards that militate in the long run against extreme leniency and the disregard of personal responsibility in the design of such programs. Conservative critics fail to recognize that the same attitudes that facilitate voluntary collective insurance or mutual-aid arrangements shape politically sanctioned welfare programs and guarantee that they will not remain overly permissive for too long. These attitudes supply a built-in hedge against extreme generosity as well as extreme harshness in welfare programs, and leave open avenues of adjustment and fine tuning in response to circumstance that would be foreclosed by a broad and uncompromising constitutional guarantee.
Suggested Citation: Suggested Citation
Wax, Amy L., Rethinking Welfare Rights: Reciprocity Norms, Reactive Attitudes, and the Political Economy of Welfare Reform (January 2000). University of Virginia School of Law, Legal Studies Working Paper No. 00-7. Available at SSRN: https://ssrn.com/abstract=198928 or http://dx.doi.org/10.2139/ssrn.198928