Over the past two decades, many welfare states have experienced a combination of low economic growth and rising unemployment, concurrent with increasing pension and health care obligations, which has exacerbated government budget deficits. Some analysts forecast that for a number of welfare states these problems will worsen in the future. Their fiscal problems, in particular, present welfare state policy makers with the dilemma of attempting to fund redistribution schemes consistent with the ideal of a secure egalitarian society while at the same time remaining competitive in a 'new...

Over the past two decades, many welfare states have experienced a combination of low economic growth and rising unemployment, concurrent with increasing pension and health care obligations, which has exacerbated government budget deficits. Some analysts forecast that for a number of welfare states these problems will worsen in the future. Their fiscal problems, in particular, present welfare state policy makers with the dilemma of attempting to fund redistribution schemes consistent with the ideal of a secure egalitarian society while at the same time remaining competitive in a 'new...