Assessing the Structure of Small Welfare States

The country case studies and thematic papers in this series examine social policy issues facing small states and the implications for economic development. They show how, despite their inherent vulnerability, some small states have been successful in improving their social indicators because of the complementary social and economic policies they have implemented.

Historically, the welfare state evolved as the most efficient policy response to caring for a large, homogeneous population. This traditional model, however, loses importance as population size falls below 3-4 million, especially for states where a significant number of the population migrate and send remittances home, and where the country is the recipient of overseas aid. Facilitating the international mobility of people therefore becomes central to social policy and insofar as the welfare state occurs, it tends to be focused on the labour market. This paper examines how the characteristics of small states influence their pursuit of a welfare state. Many of the small states discussed have not previously featured in mainstream thinking about the relationship between country size and the extent of the welfare state.