Continental Thrift

Kennedy School's Pierson looks at welfare reform in Europe

By Alvin Powell

Contributing Writer

The welfare state is experiencing some turmoil these days.

After decades of publicly funded programs providing health and pension benefits, economics and demographics are combining to force political leaders to take a hard look at which of these programs are affordable -- now and in the future.

Watching it all is Professor of Government Paul Pierson, a specialist in the comparative study of American and European public policy. Pierson is examining the pressures forcing change in Western European democracies and how political leaders are reacting to those pressures.

"You have the irresistible force of social change and the immovable object of these social programs," Pierson said. "The challenge is to modernize without slashing programs, to throw out the bathwater without throwing out the baby."

Pierson's work on the welfare state is not just important in academic circles, but also among those struggling to craft public policy, said Professor Roderick MacFarquhar, chairman of the Department of Government and the Leroy B. Williams Professor of History and Political Science.

"He's an enormously talented person working on issues that are very important, not just for scholarship, but for policy," MacFarquhar said.

Runs in the Family

One might say Europe runs in Pierson's blood.

During Pierson's childhood, his father, Stanley, taught European history at the University of Oregon. Pierson's familiarity with the continent turned to fascination during his years at Oberlin College.

He traveled in Europe during those years and became interested in how European countries' paths to democracy differed from that taken by the United States.

"I got interested in the fact that other affluent democratic societies are very different from the U.S. That drove me to thinking about politics," Pierson said.

For his senior thesis, Pierson studied theories of the modern state and the extent to which business groups are able to exert influence in different political systems.

"One of the things I learned in that course is that states operate in very different ways," Pierson said.

From Oberlin, Pierson went to Yale University, where he received an M.A. and M. Phil. in political science in 1986 and a Ph.D. in political science in 1989.

Pierson came to Harvard as an assistant professor of government in 1989. In 1993, he was promoted to associate professor of government. In 1996, he became professor of government.

His first book, Dismantling the Welfare State? Reagan, Thatcher and the Politics of Retrenchment, appeared in 1994. He served as co-editor of European Social Policy: Between Fragmentation and Integration, in 1995.

Social Change under a Microscope

Pierson is currently exploring the contrasting responses of Europe and the United States to the task of adapting the welfare state to a new environment.

Pierson noted that in recent years, huge upheavals have occurred in health care systems, pension benefits, and other aspects of the social safety nets in Europe and the United States.

Though it is easy to suggest that the problems in these countries are being caused by changes in the global economy, Pierson said each country is unique and its problems are shaped by changes within the countries themselves, such as the expectations of the public and the specifics of the country's social safety net.

"There is a tendency to look for a simple explanation," Pierson said. "All the countries are facing pressures. From a distance they look the same. When you look closer, you see they're different."

Common factors are present in the changes, however. An economic slowdown in Europe over the past 25 years has had its effect, as has the shift from a manufacturing economy to a service economy. Furthermore, today's policymakers inherit commitments made under more favorable circumstances.

"Countries have piled social promise on social promise. That makes it harder for them to be flexible," Pierson said.

In Europe, moves to cut the welfare state have produced large outcries, Pierson said. The reaction is because social programs are deeply embedded in these societies, affecting the daily lives of most citizens.

"Welfare reform was popular here because recipients were marginalized," Pierson said. "Universally in Europe, efforts to dismantle these systems have produced an enormous outcry. The same has been true in the United States for programs like Social Security and Medicare."

The situation puts politicians in the uncomfortable position of negotiating economic pressures and public demands. How they sort it out -- or try to -- will be interesting to see, Pierson said.

Though the clock is ticking on the needed reforms, Pierson added, relatively modest changes now can make a large difference in the future. The task of European politicians, he said, is to build consensus that change is needed. Once politicians from the major parties agree something must be done, and are backed by the public -- such as happened in the U.S. balanced budget debate -- a solution is possible, Pierson said.

Another of Pierson's projects, supported by a Guggenheim fellowship, is a book on how the disciplines of social science and history can be mingled to give a longer-term view of problems and their solutions.

When looking at public pension systems, for example, countries like the United States have a pay-as-you-go system, in which Social Security benefits are paid from current budgets rather than from dollars invested after they are deducted from paychecks.

Someone trying to figure out how to improve the system might suggest switching to a system where deductions are invested for each working person, perhaps even earmarked for that person. A historical view of the U.S. system, however, would show that this suggestion is likely to be impractical, since the generation working during the switch would pay not only for their own retirements, under the new system, but those of their parents, under the old pay-as-you-go system.

"You can't just cut into the story in 1998 and suggest changes," Pierson said. "We have a tendency to look at snapshots when what we need are moving pictures."

Pierson said he loves teaching at Harvard and that he often bounces ideas off his graduate students, saying they're his best critics. He particularly enjoys advising students on their senior theses, he said.

"The students here, at both the graduate and undergraduate level, are incredibly challenging," Pierson said.