Booms and Busts: How Parliamentary Governments and Economic Context Influence Welfare Policy

A crowded field of research has focused on the relationship between government ideology and welfare policy. In advancing this work, I refocus the debate on how the economic context can affect the manner in which governments shape welfare spending. In my analyses of social expenditures during times of economic booms and busts, I find that governments in recessions relax their ideological visions, while those in periods of prosperity have the room to make discretionary policy changes. By combining theories of government behavior with assumptions about preferences during diverse economic climates, these findings show how the economic environment affects governments’ abilities to implement ideological policies. More importantly, this transcends the extant literature, resulting in a more complete picture of the relationship between politics and welfare policies.