Politics, economics and welfare : a comparative study of social expenditure in Australia and Canada

Abstract

This study presents an analysis of the determinants of social expenditure in Australia and Canada within a comparative perspective. Its objectives are two-fold: first, to review and examine the key economic, social and political factors influencing outlays of public expenditure; second, to carry out an empirical evaluation of competing explanations of the link between party and policy. The core research problem of the study is a test of two models portraying the role and function of political parties and policy. One model termed the ’structural’, highlights the importance of socio-economic constituencies of parties in moulding party objectives; and the other, the ’strategic actor' model stresses the importance of strategic incentives in shaping policy objectives. The analysis of the association between political party structures and policy outputs is undertaken with reference to social expenditure, and permits an evaluation of these competing models in accounting for policy outcomes. Differences in party structure and organisation in Australia and Canada provide the basis for an empirical test of these two models within a ’similar systems' design. Methodologically a distinctive feature of the study is the use of a subset of quasi-experimental designs, the multiple-interrupted time-series design, to examine the differential impact of key political variables such as type of ’administration’ on policy outcomes. Initially, the economic determinants of expenditure are identified, paying heed to the effects of the international economic environment on policy. The latter are especially relevant in the economies of both countries as they are heavily dependent on the export of primary commodities. The political influences on expenditure outlays studied pertain to political administration and political competition. Both sets of influences are also subject to empirical examination. The major empirical findings of the study are threefold. First, it shows that international economic movements as reflected in expenditure changes are more apparent for Canada than Australia. This is largely because of key economic institutions such as the Arbitration system in Australia which served to insulate domestic income from the adverse effects of external forces. Expenditure was not needed to the same degree as in Canada to stabilise fluctuations in income. Secondly, the influence of ’administration’ on policy outcomes is evident in both countries. An explanation of this is offered in terms of a ’turnover model' of party functioning where the strategic incentives for parties in government are seen as the principal determinants of policy priorities. Finally, there is strong evidence that the factor of political competition, or more specifically inter-party competition, present in both countries is a significant factor in explaining expenditure and policy outcomes. In terms of the core research problem identified earlier, the findings lend strong support for the strategic actor conception of party rather than the structural perspective. This finding has important implications for the study of party and policy-making. It suggests that consideration of party strategies should be of crucial analytical interest. From a broader systematic perspective, the issues examined in this study, shows that despite obvious differences in political systems of Canada and Australia, there are marked similarities especially in the way political factors such as political competition and government administrations influence policy. Show more