Friedrich-Schiller-Universität Jena
Fakultät für Sozial- und Verhaltenswissenschaften
Institut für Soziologie
Magisterarbeit zur Erlangung des akademischen Grades

The Emergence of the East Asian Welfare State

by:
Marc Haufe

Juni 2005

Content Page

1. Introduction ... 3
1.1 Formulation of the Research Questions  ... 3
1.2 Content  ... 5

2. Methodological Part ... 7
2.1 Comments on Terminology and Definitions ... 7
2.2 Data Sources ... 8
2.3 The Comparative Method in General ... 8
2.4 Quantitative and Qualitative Comparisons of Welfare States ... 9
2.5 Selection of Cases  ... 10

3. Theoretical Part ...  13
3.1 Functionalist Explanation Models: The Logic of Industrialism ... 13
3.2 Conflict-Theoretical Explanation Models ... 14
3.3 The Three Worlds of Welfare Capitalism by Esping-Andersen  ... 17
3.4 Applicability of Esping-Andersen’s Approach to East Asia ... 19

4. Development of Welfare Systems in East Asia  ... 23
4.1 Overview Historical Development ... 23
4.2 Development of the South Korean Welfare System  ... 25
4.2.1 Health Insurance ... 25
4.2.2 Occupational Injury ... 26
4.2.3 The Pension Program  ... 26
4.2.4 Unemployment Insurance  ... 27
4.3 The Development of the Taiwanese Welfare System  ... 28
4.3.1 Health Care ... 28
4.3.2 Occupational Injury ... 28
4.3.3 The Pension Program  ... 29
4.3.4 Unemployment Insurance  ... 30
4.3.5 Social Assistance ... 30
4.4 The Development the Welfare System in Hong Kong ... 31
4.5 The Development of the Singaporean Welfare System  ... 32
4.6 Funding: Similarities and Differences ... 33

5. East Asian and South European Welfare Systems Compared  ... 36
5.1 The South European Countries  ... 36
5.2 Historical Comparison ... 38
5.3 Comparison in the Qualitative Perspective  ... 47
5.4 Quantitative Comparison ... 55

6. Explanations for Different Development  ... 62
6.1 Conflict-Theoretical Approach: Democratization and Welfare State Development  ... 66
6.2 Cultural Explanation: Confucian Type of Welfare State  ... 68
6.3 Developmental Approach ... 72
6.4 Discussion  ... 75

7. Conclusion ... 78

8. References  ... 81

1. Introduction

A change takes place in the exploration of social policy in non-Western regions since the 1990s. The questions of social security in societies in transition has primarily been the subject of the developing countries research, yet in the last years, sociologists and political scientists, who have done research on Western welfare states turn to these countries as well (Midgley, 1986; Jones, 1990, 1993; Esping- Andersen, 1997; Goodman et al., 1996, 1998; Wilding, 2000; Holliday, 2000; Tang, 2000, Gough 2000). This disciplinal change has a real foundation. In some transition societies, formal social security systems develop since the 80s and even more since the 90s of the twentieth century. Their ground structure is comparable with those of the Western countries. We call these states the emerging welfare states. Social security is not merely the duty of the family, local networks or subsidy anymore.

Therefore, it seems to be wise to apply concepts and methods, which have been developed for the Western welfare states to non-Western countries. The question is whether or not this is possible. It depends on one the hand to what extent emerging welfare states are comparable with Western welfare state models and on the other hand to what extent existing explanation models and approaches are able to explain certain developments, which differ from developments we know from Western countries. These basic questions lead to the problem, which this thesis is dealing with.

1.1 Formulation of the Research Questions

There are several regions and countries, which are considered to be emerging welfare states. In East Asia several countries are relatively advanced in their efforts to create a comprehensive welfare system. Therefore, countries and territories such as South Korea, Hong Kong, Taiwan, and Singapore are interesting cases to analyze the welfare state development in non-Western regions. Besides, the information on the development of welfare systems in East Asia compared to what is available in the Western welfare states is insufficient and unsatisfying (Aspalter 2002a: 1). The following questions regarding social policy and welfare state in East Asia come up: 4

• Which structures can be found there,
• how do they differ from Western patterns,
• and what are the causes for the special development?

Since the late 1990s scientists turned towards this region to get a deeper insight in the development regarding the welfare state system. Either they attempted to use existing explanation models, that is to say such, which have been developed for Western welfare states (e.g. Esping-Andersen, 1990) or they brought up new yet controversial approaches (Jones, 1993; Aspalter, 2002b; Holliday and Wilding, 2003). This thesis picks up these three main questions above. In doing so I will overcome the limited character of Western-based approaches. While drawing on the very popular and dominating classification of welfare states of Esping-Andersen, the Three worlds of welfare capitalism (1990), this thesis proposes to overcome its shortcomings by expanding these three worlds by two more: the East Asian and the South European regime type. Esping-Andersen’s Three worlds of welfare capitalism (1990) are still an obvious reverence point, not only because others have turned to it in examining East Asian social policy but also because it provides a powerful framework for comparative analysis. This case study focuses on East Asia, containing the four countries Hong Kong, South Korea, Taiwan, and Singapore.

In order to find out more about the precise nature of East Asian special position, an interregional comparison with the South European countries is carried out. In a context-oriented way I will identify the factors that make up the welfare state in East Asia. It offers the advantages of holistic, rich descriptions and full, chronological case account. I expand my comparison approach to different fields of welfare phenomena including development contexts, qualitative characteristics, quantitative expenditures, and historical development through different stages. In that respect my theoretical approach follows to some extend a classic comparative research tradition. The comparative analysis with South European countries is meant to show the similarities between both regions yet particularly the distinctiveness of the East Asian countries. Comparisons reveal the particularities of the cases, which are not single countries but regional entities.

In the final part I will discuss the causes of East Asia’s special position by slipping in the results of the comparison. They will help to assess to flaws and virtues of existing explanation models. I will focus on three different approaches,

• on a conflict-theoretical approach, which claims that democratization is the driving force behind welfare state development,
• an cultural approach, which draws on Confucian values because of its emphasis on family obligations, education, paternalism, and social harmony, to explain East Asia’s special position, and
• the development state approach, which is usually defined as a state where elite policy makers set economic growth as the fundamental goal and pursue a coherent strategy to achieve it.

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