PERSISTENT POVERTY: PORTUGAL AND THE SOUTHERN EUROPEAN WELFARE REGIME

ABSTRACT

This article aims to assess the extent to which social policies address current and persistent poverty in southern European Union countries in general and Portugal in particular. The southern European welfare regime, which includes Greece, Italy, Portugal and Spain, has been seen as less developed and less generous in covering social risks. Additionally, the southern European welfare regime presents several inefficiencies that make social policies much less successful in tackling current and persistent poverty. In spite of having recently followed a common path of welfare reforms, southern European countries are far from achieving substantial results in poverty reduction in recent years. Possible explanations of enduring poverty may rest on cultural and institutional factors such as less state accountability in the context where a prominent role in welfare provision rests on families, high levels of tolerance of inequality and poverty, and, in broader terms, in attitudes toward inequality and poverty embedded in social and political practices. In this framework, the case of Portugal is further developed and contrasted with others countries in southern Europe.

Keywords:

• poverty dynamics
• social policy
• welfare regimes
• southern Europe
• Portugal

Acknowledgements

This research was partially supported by Fundação para a Ciência e a Tecnologia (Program FEDER/POCI 2010). The original paper was written during a research visit to IDPM/University of Manchester in 2005, whose hospitality I gratefully acknowledge. I also thank Luís Capucha, José Madureira Pinto, the editor and two anonymous referees for valuable comments. The usual disclaimers apply.

Notes

¹Guio (2005) estimates that there were 72 million people in relative poverty in the EU 25 in 2003.

²Particularly southeastern countries (cf. Sotiropoulos 2005).

³Sometimes described as a blurring of regime demarcations and a pervasive mixing of welfare pillars.

⁴If we take the full range of ECHP (1994–2001), the average ratio of persistent poverty to current poverty will be 57.8% for the EU 15, 63.3% for Greece, 60.5% for Italy, 67.7% for Portugal and 57.7% for Spain.

⁵However, concerning the policy goal during the 1990s of introduction of minimum income schemes, only Portugal has fully implemented a national rights-based scheme (Matsaganis et al. 2003; Ferrera 2005). This point will be given further attention in the section dedicated to Portugal.

⁶Kuchler and Goebel (2003), using a different approach (smoothed income) and a different threshold (50% of the mean income) to measure poverty in the ECHP 1994–1997, present similar results on incidence, intensity (and also in severity) FGT indices. Furthermore, TIP curves shapes reflect the worse situation of all Mediterranean countries, especially Portugal.

⁷Simple averages for each relevant time period. Efficiency of social protection expenditure excluding pensions is defined as the relative reduction of poverty risk achieved by social benefits other than pensions.

⁸Pearson correlation coefficient between persistent poverty and social expenditure effort is −0.7949 and between persistent poverty and social expenditure efficiency it is −0.8587.

⁹Ras et al. (2002: 20), using LIS data from Belgium, Denmark, Finland, Germany, The Netherlands, Sweden and the United Kingdom in the first half of the 1990s, concluded that the distributive effect of social benefits is much greater than that of income taxes and social security contributions.

¹⁰All of the studies exclude any type of in-kind transfers such as public education or health. The differences between European countries in size and distribution of such transfers would be an interesting research subject.

¹¹Here ‘long-term poverty’ stands for poverty over 3 or 4 years of the total 4 years of the data analysed.

¹²This is perhaps related to the conservative Catholic imprint on systems values, the primacy of individual and less collectivist/mutual orientation. Gallie and Paugam (2002) also found high levels of individual explanation of inequality and poverty in southern European countries.

¹³The role of religion in the cultural foundations of welfare values and social policy practices, as well as in the structuring of a regime theory, is a field where there are few research results, which certainly deserves further effort.

¹⁴These results are very robust for different research options such as equivalence scales and poverty thresholds as well as observation windows in the ECHP (see, e.g., Dennis and Guio 2004; Eurostat 2003a, 2003b; Kuchler and Goebel 2003; Whelan et al. 2003: Ferreira 2002).

¹⁵Their combined effect would lead to poverty reduction of 12%, 3.4%, 4% and 5.6%, respectively, in the different poverty subgroups.

¹⁶The analysis does not adopt the standard Eurostat definitions on equivalence scales (it uses OECD original equivalence scale) and poverty threshold (defined as 50% of the median equivalised income), but its results are consistent with the ones produce by other studies.

¹⁷However, Guio (2005) estimates poverty risk in Portugal of 19% in 2003, and the latest SILC estimates for 2004 are 20% – exactly the same figure as in 2001.

¹⁸Individual factors for the determination of the minimum value of resources for each household are also higher than scale equivalence factors used in poverty analysis (OECD modified scale).

¹⁹The adopted methodology is the same as Ferreira (2002) (see Note 12).

²⁰Ras et al. (2002) found that Portugal has the highest inertia of income distribution and income mobility is of shorter range in the EU 15 in the same period.