Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-22T19:29:57.588Z Has data issue: false hasContentIssue false
  • English
  • Français

Social Insurance as Fiscal Policy and State-Building Tool: The Development and Politics of Payroll Contributions in Israel and Canada

Published online by Cambridge University Press:  25 April 2018

DANIEL BÉLAND  and
MICHAL KOREH
DANIEL BÉLAND
Affiliation:
Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan, 101 Diefenbaker Place, Saskatoon, Saskatchewan, CanadaS7N 5B8 email: daniel.beland@usask.ca
MICHAL KOREH
Affiliation:
School of Social Work, University of Haifa, 199 Aba Khoushy Avenue, Mount Carmel, Haifa. 3498838, Israel email: korehm@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

The scholarship on state-building has devoted a significant amount of attention to the role of taxation in building state institutions and capacities. It has also emphasised the crucial role of taxation in driving state-society relations. Scholars have argued that the linkage between taxation and state building also applies to the area of social policy. In this paper, we draw on a fiscal-centred perspective on welfare state development that highlights the fiscal policy role of social insurance as a revenue raising institution to study the fiscal relationship between social insurance and state-building in Israel and Canada – two ‘most dissimilar cases’ that nonetheless feature strikingly similar patterns with regard to this relationship. As our findings show, in both cases, social insurance programmes were introduced, designed, and utilized to advance fiscal and economic policy capacity and thereby promote state building. Using these programmes and the commitments they created, political actors could legitimize the generation of revenues, build institutional infrastructure for tax collection, and create capital reserves for investing in the economy.

Type
Article
Information
Journal of Social Policy , Volume 48 , Issue 1 , January 2019 , pp. 1 - 20
Copyright
Copyright © Cambridge University Press 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alesina, A. and Reich, B. (2013), Nation Building. National Bureau of Economic Research Working Paper 18839, Cambridge, MA: National Bureau of Economic Research, http://www.nber.org/papers/w18839.pdf [accessed 11.20. 2017].Google Scholar
Anderson, B. (1991), Imagined Communities: Reflections on the Origin and Spread of Nationalism (revised edition), London: Verso.Google Scholar
Audit Union for Provident Funds and Pensions (1948), The Provident Funds and Pensions in the Land of Israel, Tel Aviv: Audit Union for Provident Funds and Pensions.Google Scholar
Babich, K. and Béland, D. (2009), ‘Policy change and the politics of ideas: the emergence of the Canada/Quebec Pension Plans’, Canadian Review of Sociology, 46, 3, 253–71Google Scholar
Banting, K. G. (1995), ‘The Welfare State as Statecraft: Territorial Politics and Canadian Social Policy’ in Leibfried, S. and Pierson, P. (eds.), European Social Policy: Between Fragmentation and Integration, Washington, DC: The Brookings Institution, 269–300.Google Scholar
Banting, K. G. (2005), ‘Canada: nation-building in a federal welfare state’, in Obinger, H., Leibfried, S., and Castles, F. G. (eds.), Federalism and the Welfare State: New World and European Experiences, Cambridge: Cambridge University Press, 89–137Google Scholar
Bashevkin, S. (2000), ‘Rethinking retrenchment: social policy during the early Clinton and Chrétien years’, Canadian Journal of Political Science, 33, 1, 7–36Google Scholar
Bédard-Pagé, G., Demers, A., Tuer, E. and Tremblay, M. (2016), ‘Large Canadian Public Pension Funds: A Financial System Perspective’, Financial System Review, June, 33–8Google Scholar
Béland, D. and Koreh, M. (2017), ‘The fiscal side of social policy: state building, payroll contributions, and pension reform in 1960s Canada’, Journal of Policy History, 29, 4, 594–613Google Scholar
Béland, D. and Lecours, A. (2008), Nationalism and Social Policy: The Politics of Territorial Solidarity, Oxford: Oxford University Press.Google Scholar
Béland, D. and Myles, J. (2012), ‘Varieties of Federalism, Institutional Legacies, and Social Policy: Comparing Old-Age and Unemployment Insurance Reform in Canada’, International Journal of Social Welfare, 21 (S1), S75–S87.Google Scholar
Béland, D. and Weaver, R. K. (2017), ‘Fork in the road for Canada and Quebec pension plans’, Policy Options, August 18. http://policyoptions.irpp.org/magazines/august-2017/fork-road-canada-quebec-pension-plans/ [accessed 12.21.2017].Google Scholar
Benish, A., Haber, A. and Eliahou, R. (2017), ‘The regulatory welfare state in pension markets: mitigating high charges for low-income savers in the United Kingdom and Israel’, Journal of Social Policy, 46, 2, 313–30Google Scholar
Bennett, A. and Checkel, J. T. (eds.) (2014), Process Tracing: From Metaphor to Analytic Tool Series: Strategies for Social Inquiry, New York: Oxford University Press.Google Scholar
Bräutigam, D. A. (2008), ‘Introduction: taxation and state-building in developing countries’, in Brautigam, D. A., Fjeldstad, O.-H. and Moore, M. (eds.), Taxation and State-Building in Developing Countries: Capacity and Consent, Cambridge: Cambridge University Press, 1–33Google Scholar
Brooks, S. and Tanguay, A. B. (1985), ‘Quebec's Caisse de Depot et Placement: tool of nationalism? Canadian Public Administration, 28, 99–119Google Scholar
Bryden, K. (1974), Old Age Pensions and Policy-Making in Canada, Toronto: University of Toronto Press.Google Scholar
Bryden, P. E. (1998), Planners and Politicians: Liberal Politics and Social Policy, 1957–1968, Montréal and Kingston: McGill-Queen's University Press.Google Scholar
Campeau, G. (2005), From UI to EI: Waging War on the Welfare State, Vancouver: UBC Press.Google Scholar
Christensen, B. (2016), ‘The struggle for security: Ontario pension policy, risk and individualization’, PhD diss., York University.Google Scholar
Cichon, M., Scholz, W., Van De Meerendonk, A., Hagemejer, K. and Bertranou, P. (2004), Financing Social Protection. International Labour Organization.Google Scholar
Courchene, T. J. (1984), Equalization Payments: Past, Present and Future, Toronto: Ontario Economic Council.Google Scholar
Courchene, T. J. and Allan, J. R. (2009), ‘A short history of EI, and a look at the road ahead’, Policy Options, September, 19–28Google Scholar
CPP Investment Board (2016), ‘Actuarial Report: 27th on the Canada Pension Plan as of 31 December 2015’, Ottawa: Office of the Chief Actuary, http://www.osfi-bsif.gc.ca/Eng/Docs/cpp27.pdf. [accessed 11.20. 2017]Google Scholar
Crepaz, K. (2016), The Impact of Europeanization on Minority Communities. Wiesbaden: Springer VS.Google Scholar
Department of Finance (1994), Government Revenues in Canada, Ottawa: Government of Canada. http://publications.gc.ca/collections/collection_2016/fin/F2-248-1994-eng.pdf.Google Scholar
Doron, A. (1975), The Struggle over National Insurance in Israel 1948–1953 (2nd ed.), Jerusalem: National Insurance Institute.Google Scholar
Estevez-Abe, M. (2001), ‘The forgotten link: the financial regulation of Japanese pension funds in comparative perspective’, in Ebbinghaus, B. and Manow, P. (eds.), Comparing Welfare Capitalism: Social Policy and Political Economy in Europe, Japan and the USA, London: Routledge, 190–216Google Scholar
Gal, J. (1996), The Middle Classes and the Welfare State in Israel During the 1970’s and 1980’s, Jerusalem: The Hebrew University.Google Scholar
Gal, J. (1997), ‘Unemployment insurance, trade unions and the strange case of the Israeli labour movement’, International Review of Social History, 42, 357–96Google Scholar
Gal, J. and Bargal, D. (2002), ‘Critical junctures, labor movements and the development of occupational welfare in Israel’, Social Problems, 49, 3, 432–54Google Scholar
Government of Quebec (2011), Un système renforcé de revenu de retraite: Pour répondre aux attentes des québécois de toutes les générations, Quebec City: Bibliothèque et Archives nationales du Québec, http://www.budget.finances.gouv.qc.ca/Budget/2011-2012/fr/documents/Retraite.pdf. [accessed 11.20. 2017]Google Scholar
Grinberg, L. L. (1991), Split Corporatism in Israel, Albany, NY: State University of New York Press.Google Scholar
Gross, N. T. and Metzer, J. (1977), Public Finance in the Jewish Economy in Interwar Palestine, Jerusalem: Maurice Falk Institute for Economic Research in Israel.Google Scholar
Hale, G. E. (1998), ‘Reforming Employment Insurance: transcending the politics of the status quo’, Canadian Public Policy, 24, 4, 429–51Google Scholar
Jacobs, A. M. (2011), Governing for the Long Term: Democracy and the Politics of Investment, Cambridge: Cambridge University Press.Google Scholar
Kanevski, I. (1942), Social Insurance in Israel: Achievements and Challenges, Tel Aviv: The Workers Health.Google Scholar
Koreh, M. (2017), ‘The fiscal politics of welfare state expansion: the case of social insurance in Israel’, Journal of European Social Policy, 27, 2. 158–72Google Scholar
Koreh, M. and Béland, D. (2017a), ‘Reconsidering the fiscal-social policy nexus: the case of social insurance’, Policy & Politics, 45, 2, 271–86Google Scholar
Koreh, M. and Béland, D. (2017b), ‘The fiscal path to the State of Israel: social policy and state building in the Yishuv during the Mandate’, Israel Studies, 22, 2, 145–68Google Scholar
Levi, M. (1989), Of Rule and Revenue, Berkeley: University of California Press.Google Scholar
Lewis, T. (2003), In the Long Run We're All Dead: The Canadian Turn to Fiscal Restraint, Vancouver: UBC Press.Google Scholar
Lin, Z. (1998), ‘Employment Insurance in Canada: policy changes’, Perspectives on Labour and Income, Summer, 42–7, http://www.statcan.gc.ca/pub/75-001-x/1998002/3828-eng.pdf. [accessed 11.20. 2017]Google Scholar
Little, B. (2008), Fixing the Future: How Canada's Usually Fractious Governments Worked Together to Rescue the Canada Pension Plan, Toronto: University of Toronto Press.Google Scholar
Martin, I. W., Mehrotra, A. K. and Prasad, M. (eds.) (2009), The New Fiscal Sociology: Taxation in Comparative and Historical Perspective, New York: Cambridge University Press.Google Scholar
McGregor, J. (2015), ‘$2.7B employment insurance surplus balanced Joe Oliver's books: new 7-year break-even system doesn't start until 2017’, CBC News, May 5, http://www.cbc.ca/news/politics/2-7b-employment-insurance-surplus-balanced-joe-oliver-s-books-1.3057261. [accessed 11.20. 2017]Google Scholar
Morag, A. (1967), Public Finance in Israel: Problems and Development. Jerusalem: Magnes Press.Google Scholar
Musgrave, R. A. and Musgrave, P. B. (1973), Public Finance in Theory and Practice, New York: McGraw-Hill.Google Scholar
Nathan, R. R., Gass, O. and Creamer, D. B. (1946), Palestine: Problem and Promise, Washington, DC: Public Affairs Press.Google Scholar
National Insurance Institute (1970), The Changes to the National Insurance Law: Amendment No 3, Jerusalem: National Insurance Institute.Google Scholar
North, D. C. and Weingast, B. R. (1989), ‘Constitutions and commitment: the evolution of institutions governing public choice in seventeenth-century England’, The Journal of Economic History, 49, 04, 803–32Google Scholar
Pal, L. A. (1988), State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public Policy, Kingston and Montréal: McGill-Queen's University Press.Google Scholar
Park, G. (2011), Spending Without Taxation: FILP and the Politics of Public Finance in Japan, Stanford California: Stanford University Press.Google Scholar
Pierson, P. (1994), Dismantling the Welfare State? Reagan, Thatcher and the Politics of Retrenchment, Cambridge: Cambridge University Press.Google Scholar
Rosenhek, Z. (2003), ‘Social policy and nationbuilding: the dynamics of the Israeli welfare state’, Journal of Societal and Social Policy, 1, 1, 19–38Google Scholar
Rouzier, R. (2008), La Caisse de Dépôt et Placement du Québec, Portrait d'une institution d'intérêt général, 1965–2000, Paris: L'Harmattan.Google Scholar
Shalev, M. (1992), Labour and the Political Economy in Israel, Oxford: Oxford University Press.Google Scholar
Shvarts, S. (2002), The Workers’ Health Fund in Eretz Israel: Kupat Holim, 1911–1937, Rochester, NY: University of Rochester Press.Google Scholar
Simeon, R. (2006) [1972], Federal-Provincial Diplomacy: The Making of Recent Policy in Canada: The Making of Recent Policy in Canada, Toronto: University of Toronto Press.Google Scholar
Tamagno, E. (2008), A Tale of Two Pension Plans: The Differing Fortunes of the Canada and Quebec Pension Plans, Ottawa: Caledon Institute of Social Policy, http://www.caledoninst.org/Publications/PDF/667ENG.pdf. [accessed 11.20. 2017]Google Scholar
Thompson, D. C. (1984), Jean Lesage and the Quiet Revolution, Toronto: Macmillan of Canada.Google Scholar
Tilly, C. (1985), ‘War making and state making as organized crime’, in Skocpol, T., P. Evans, B. and Rueschemeyer, D. (eds.), Bringing the State Back In, New York: Cambridge University Press, 169–91Google Scholar
Timmons, J. F. (2005), ‘The fiscal contract: states, taxes, and public services’, World Politics, 57, 04, 530–67Google Scholar
Timmons, J. F. (2010), ‘Taxation and credible commitment: left, right, and partisan turnover’, Comparative Politics, 42, 2, 207–27Google Scholar
Weaver, R. K. (2003), Whose Money Is It Anyhow? Governance and Social Investment in Collective Investment Funds, Working Paper #2003-07, Boston: Center for Retirement Research at Boston College.Google Scholar