Attitude toward Welfare Policy and Social Security (1) Rationale for Focusing on the Attitude

The way the so-called welfare regime theory is discussed varies because it is relevant to various fields. The cohering principle among them is that the theory implies a rebuttal against the viewpoint that there is a unilinear relationship between the economic development stages and welfare system development, such as that welfare systems and social security services develop as industrialization and mod-ernization advances (Uzuhashi, 1997). In other words, welfare institutions and systems can be seen to vary even among countries exhibiting similar economic development.

For example, as an indicator of the development of the welfare system, public expenditure or the proportion of social security expenditure to the economic scale (GDP) is sometimes used. I have conducted an analysis by partially following the method also of Chapter 3. While this is something seen in the aforementioned work by Wilensky as well as Fred C. Pampel, John B. Williamson, and Francis Castles, among others (Wilensky, 1975, trans. 1984; Pampel and Williamson, 1988; Castles, 1989), we need to be aware that such a viewpoint has the following pitfalls.

The Thatcher administration during the 1980s is generally regarded as the vanguard of neoliberalism. However, looking only at the facts, the overall pub-lic expenditure actually increased, especially for social security-related items, even though neoliberalism indeed seems to have had an impact on cutting gov-ernment spending on items such as housing and education (Takegawa, 1999:

67–70). When the unemployment rate increases, its cost is passed on to social

security-related expenses. Conversely, if a state of close to full employment is real-ized, the cost is reduced regardless of the welfare system. The Japanese government is not in the least bit big compared to its economic scale. However, as we can see from the demographic composition of Japan, the social security benefit cost is destined to increase. Pension and medical care account for 50% and 30% of the total social security benefit cost, respectively; and the social security benefit cost as a percentage of GDP has consequently increased four-fold in 40 years. The over-all social expenditure as a percentage of GDP, which is 23%, has also doubled in the past 30 years. This increase is significantly larger than other countries, with the percentage of social expenditure to general government spending already hav-ing reached the European level (Tanaka, 2013: 238–241). In other words, while social security expenditure could increase due to rapid population aging, it will never decrease (unless some kind of binding power comes into play). In that sense, although it might not feel that way, Japan will become more of a welfare state in terms of government expenditure.

In addition, although the scale of social security benefit tends to attract all the attention, the roles and functions of the state (or government) are not limited to resource allocation. As Shogo Takegawa points out, we also need to pay attention to the aspect of the welfare state as a regulatory state. In general, the United States is rarely considered to be a welfare state; however, that is when mainly consider-ing benefits; and this does not mean that the United States has been indifferent to the value of equality. In fact, discrimination based on race, gender, age, disabili-ties, etc., is institutionally strictly prohibited. Deregulations in the United States are mainly related to economic activities; however, when it comes to aspects such as equality of individual freedom and opportunities, the American society pays extremely close attention and deploys strict regulations (Takegawa, 2007: 42).

In short, as shown in Chapter 3, we are beginning to understand the way the welfare system differs considerably even among developed countries. The educa-tion system—also a large undertaking that the government is involved in—is not independent of the welfare system. The question is what explains the difference in these regimes (or systems).

While numerous factors can surely be hypothesized, the people’s voice (or pub-lic opinion) cannot be ignored in a democratic society. This is because the people in a democratic country are supposed to have the opportunity to realize their own will and desire through their voting behavior. While it does not have to be perfect, a policy that does not at all reflect the will of the public is unlikely to be realized.

In addition, although the explanation here sounds as if there were a causal rela-tionship whereby a policy is realized through politics because there is the will (or desire) of the people, the actual relationship is not that simple. In the case of social security policy, society begins to consider it a matter of course for beneficiaries to receive benefits once a system has been put into place, so that further expansion of the program might become necessary in some cases. In other words, it seems that there is tendency to no small extent for policy to rouse the demand.¹

In this chapter, I will continue looking at the issue from the perspective of inter-national comparison and examine to what extent people recognize education,

along with other social security and welfare policies, as the government’s role by focusing on attitude toward the public burden of education costs.

(2) Competing Interests for Public Spending on Education

The need for services provided by the government is basically increasing more and more. Meanwhile, the government must secure funds to accommodate that need.

While this is a common problem among developed countries, it is not easy to secure funds. Tax avoidance behavior is becoming conspicuous, especially among high-income earners, as economic activities become more globalized and the com-petition to reduce corporate tax continues worldwide in order to attract companies that ultimately bring employment. Under such circumstances, the only option that can ultimately surface in an attempt to somehow secure funds is to persuade the people, or the taxpayers, on an increase in tax.

However, generally speaking, higher taxes tend to be considered as an increased burden. Therefore, the idea is unlikely to gain support, while politicians are unlikely to advocate such policy for which it is difficult to gain support because they could face tax revolt and be defeated in the next election if they did.

Japan is currently in the midst of such difficult circumstances. Ideologically, the appropriate information is supposed to be provided in a democratic society for individuals to refer to in order to make a decision to vote for a political party or candidate he/she considers suitable. However, it is difficult to judge the appropri-ateness of the information to begin with. There are also various positions regarding tax increases, and the reality is that each party is communicating the information that they consider to serve their own purpose. Unless one has the expertise, it is difficult to judge the appropriateness of the information. Systems related to social security and welfare are particularly complex and require a considerable amount of knowledge. Even experts sometimes state their opinion from completely opposite positions. At the end of the day, it is unreasonable to assume that everyone has the same detailed knowledge on these systems. In addition, an extremely biased image and understanding could become popular, and people might in some cases vote based on such misconception.

According to the analysis by Taylor-Gooby and others, although relatively accu-rate information is prevalent in the United Kingdom regarding services such as the National Health Service (NHS) that everyone can receive, there is a tendency to overestimate the cost for income redistribution policies targeting specific seg-ments (such as the unemployed and single-parent households, in particular).

Furthermore, the highly educated as well as relatively affluent segments such as the middle class are more likely to have this knowledge. In terms of type of policy, those such as the redistribution policy that are beneficial to the low-income ment are more likely to be judged harshly. Not only that, but it is said that the seg-ments that would benefit the most from the redistribution policy are more likely to vote on the basis of an inaccurate understanding (Taylor-Gooby et al., 2003).

To state it very simply, taxpayers consider an expenditure justifiable if they can see it benefit for themselves somehow but do not tend to support an expenditure for which they do not see any direct benefit. Everyone undoubtedly has experience

of receiving education and should have enjoyed some of benefit at the personal level; however, the period in which people go to school is generally limited. In addition, those who pay some kind of personal cost for education are limited to families with children who go to school. Assuming that whether or not to have children is a personal choice, it is possible that some people consider the educa-tion cost incurred for children to be something that should be paid for by the individual because it is a consequence of their own choice at the micro level (i.e., the act of bearing and raising children itself). As for expenditures in areas related to social security, however, anyone may be at risk of falling into the position of having to rely on the benefits of medical care and the elderly pension, for example (and the possibility could be high or certain when considered over the long term).

Therefore, these types of social security expenditures are issues for everyone. It can be said that policies in favor of welfare and social security in general can more eas-ily get support because no one can avoid aging eventually. In that sense, education might be an area that people cannot fully appreciate. For this reason, we can also say that those in urgent need are limited.

As pointed out by Samuel H. Preston, the difference between the expenditure on measures for the elderly and the money spent for children and youth, such as education, is that while the implication of the former is more on consumption, the latter is not merely consumption but social investment (Preston, 1984). However, Kenneth S. Y. Chew states that policies to be supported from a long-term perspec-tive—particularly public investments related to children—will have a hard time receiving support due to an increasingly individualistic orientation in addition to demographic factors such as the declining birth rate, high divorce rate, and aging population. In general, highly educated people tend to agree with direct public funds for education; however, this tendency weakens as people get older.

This might reflect the fact that it is the elderly who have strong traditional values that parents should raise their own children (Chew, 1990).² It has been observed in the United States that people who are paying for education as parents are more likely to support public spending on education (Chew, 1992).³

In many cases, the demand for spending on elderly welfare and health ulti-mately increases while the demand for spending on the youth segment decreases in developed countries as their birth rates continue to decline and the popula-tion further ages. And as the service sector economy flourishes and women begin advancing in society, the instability of family increases and single-parent fami-lies, unstable employment, and unemployment manifest as new risks. Meanwhile, however, underfunding is also a common issue. The emergence of the problem of how to allocate limited financial resources reflects the beginning of the era of the post-industrialized society. In southern European countries and societies where the arrival of post-industrialized society has been late, expenditure on pensions tends to become disproportionately large, while education and family policies are overlooked (Tepe and Vanhuysse, 2010).

(3) The Low Level of Trust in the Government among the Japanese

The reason why the problems faced by Japan are extremely difficult to solve lies in

the complicated attitude of the public. In a democratic country, the policy direc-tion is basically selected according to the interest of the majority. As for Japanese people, there is still an extremely strong sense of avoidance of increased tax and burdens, although the tendency appears to have somewhat weakened recently as they have become more acutely aware of the country’s financial crisis. In fact, the call to cut down the amount of wastefulness has been receiving a certain level of support. It would be easy to understand the situation if such voices were coming from a so-called “small government orientation.” Aside from whether or not one personally agrees, if the people persist in insisting on cutting the amount of waste-fulness and not increasing tax because they strongly prefer a small government, and if that is the choice of the majority of the people, such policy must be imple-mented under a democratic system.

However, the problem is that it does not seem that many Japanese are thinking that way. It is somewhat questionable to what extent people commonly under-stand the fact that the Japanese government is considered one of the smallest among the developed countries in terms of national burden and number of gov-ernment employees, and that we have already reached the limit at which there are no more wasteful departments to cut. In addition, many Japanese probably want a stable pension and healthcare system and are uncomfortable with the idea of entrusting everything to the private sector. In other words, it could be that a con-siderable number of Japanese remain convinced that “since there is still enormous wastefulness in Japan, increasing the tax is unthinkable until it is cut.”

Therefore, we have a contradicting attitude structure whereby people do not wish to increase the burden even though they wish for a stable and extensive wel-fare society (and even though the national finances are in a deficit and the govern-ment is considered small enough in terms of the number of governgovern-ment employees and the rate of national burden). The situation has become difficult because there is no logic to views such as “we don’t want to increase the burden because we want a small government” or “we will accept some increase in the burden because we want extensive welfare” (Miyamoto, 2008: iii–iv). I will touch on this later in this book as well . Economic crises in the Southern European countries such as Greece have often been talked about in recent years. It is said that people in these coun-tries do not have much trust in others and their so-called public morality is low because of the fraudulent government and large underground economy. Since the trust in the government is compromised when public morality is low, it ultimately become difficult to support welfare state policies.

As for Japan, while there is a moderate amount of welfare and level of trust in others, the level of trust in the government is extremely low. It is not that all countries with extensive welfare (i.e., countries with a big government) have fallen into financial crisis. In the case of Japan, the level of trust in the government is extremely low relative to the range of roles that the government thinks it should play, and people have fallen into the reasoning that they do not want to take on any more burden.⁴

Figure 4-1, which was prepared based on Chapter 1 of the 2013 edition Government at a Glance by the OECD, shows the relationship between the level of

trust in the government and the outstanding debt. This problem has been attract-ing so much attention that even the OECD has dealt with the trust between the government and the people in the reference work that they published. This only shows a simple correlation and does not indicate that there is some kind of specific causal relationship. That said, we can see the relationship that the larger the gov-ernment’s debt, the lower the trust in the government. Whether the government is not trusted because the debt is large or the debt has become excessive because people distrust the government and are not cooperative is unclear. Nevertheless, Japan stands out for the size of its excessive debt and for making a considerable contribution to support the relationship between these two variables.

This type of research that focuses on the sense of trust in the government has been actively conducted in recent years by several economists in France. According to Philippe Aghion and others, people tend to put more pressure on regulating the government when their general sense of trust is low (Aghion et al., 2010).⁵ Furthermore, Yann Algan and Pierre Cahuc have pointed out that those who immigrated to the United States still have the level of trust they used to have in their home country, and that there is a correlation between the sense of trust among immigrants by ethnicity and the sense of trust in their home country. They also showed that this sense of trust contributes to economic growth (i.e., the higher the sense of trust in a given society, the more their economy has grown). Solely on this

basis, it might seem that sense of trust is determined by the ethnicity-specific cul-ture; however, such a correlation actually weakens and almost disappears among the second generation of immigrants (Algan and Cahuc, 2010). In other words, it shows that the sense of trust created through relationships with others in their home country could change as they live out their lives in the place to which they have emigrated as part of American society.

Toshio Yamagishi compared the sense of trust in Japan to that in the United States and noted that Japanese people tend to trust others as long as they are acquainted but become suspicious if they are not acquainted, so that the sense of trust toward complete strangers is lower compared to Americans. Yamagishi also notes that highly educated individuals are more likely to have a stronger sense of trust toward unacquainted third parties (Yamagishi, 1999). Furthermore, Algan, Cahuc, and Shleifer point out the importance of education in fostering a sense of trust. Attending many one-way lectures in which one only copies from the blackboard means that one will not have many opportunities to learn skills for interactive discussion and communication and cannot easily build cooperative relationships with others. In contrast, attending many lectures that emphasize dis-cussion and group work allows students to actually develop skills for communica-tion and negotiacommunica-tion, contributing to building social capital (Algan et al., 2013).

In other words, these studies indicate that the level of trust is not necessarily invari-ant and fixed; it could sufficiently be changed depending on the social conditions.