Varieties of Regulatory Welfare Regimes in Middle-Income Countries: A Comparative Analysis of Brazil, Mexico, and Turkey

• DOI: 10.1177/0002716220965884
• Author: Salvador Parrado,Işik D. Özel
• Published date: 01 September 2020
• Date: 01 September 2020

965884ANN
THE ANNALS OF THE AMERICAN ACADEMYVarieties of Regulatory Welfare Regimes
research-article2020
The expansion of social welfare regimes in middle-income
countries (MICs) has become a global trend that has
involved the adaption of robust social assistance pro-
grams aiming to alleviate poverty and diminish inequali-
ties. We analyze conditional cash transfers in Brazil,
Mexico, and Turkey, identifying the types of regulatory
regimes that exist in each, namely “loose decentralism”
in Brazil, “strict centralism” in Mexico, and “subcon-
tracted dirigisme” in Turkey. We argue that regulatory
Varieties of
design is key to understanding how the newly flourishing
welfare regimes can control political manipulation, and
Regulatory
that where manipulation occurs, social assistance pro-
grams can deviate from their initial objectives and
endanger the welfare of the poor and hazard trust in the
Welfare
government and political institutions. However, when
social welfare regimes work in line with their objectives
Regimes in
and eschew political discretion, regulatory welfare states
can enhance trust in and legitimacy of political institu-
tions. Our analysis indicates that a centrally regulated
Middle-Income social assistance governance nurtured by local knowl-
edge is key to avoiding political manipulation and to
Countries: A alleviating poverty, major issues in MICs.
Comparative Keywords: social assistance; conditional cash transfers;
regulatory welfare state; Brazil; Mexico;
Turkey
Analysis of
Brazil, Mexico, Since the late 1990s, the expansion of social
and Turkey
welfare in the Global South has become a preva-
lent phenomenon in the face of globalization,
Is¸ık D. Özel is a visiting professor at Universidad
Carlos III de Madrid and a member of the Carlos III-
Juan March Institute. Broadly situated in comparative
political economy, her research examines the politics of
By
institutional change and its diverse outcomes in middle-
IS¸IK D. ÖZEL
income countries, with a focus on social policy, educa-
tion, and market regulation.
and
SALVADOR PARRADO
Salvador Parrado teaches public administration at the
Spanish Distance Learning University (Madrid). He
has carried out comparative research on executive poli-
tics, public management, public values, public-private
partnerships, civil service, and reform policies. He is
the director of Governance International and associate
editor of Public Administration.
Correspondence: iozel@clio.uc3m.es
DOI: 10.1177/0002716220965884
ANNALS, AAPSS, 691, September 2020 223

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THE ANNALS OF THE AMERICAN ACADEMY
which, in contrast, exhorted welfare retrenchment in advanced countries
(Haggard and Kauffman 2008; Holland and Schneider 2017; Mares and Carnes
2009). Aiming to fight against poverty and alleviate inequalities, while garnering
support from the poor, social assistance programs have become major constitu-
ents of these flourishing welfare regimes. These programs have been adopted by
divergent regimes and governments in all corners of the ideological spectrum,
defying views of democratic-authoritarian and Left-Right divides in welfare
expansion (Garay 2016). An increasingly popular component of the social assis-
tance programs is the noncontributory and nondiscretionary means-tested condi-
tional cash-transfers (CCTs) to the poor—adopted widely, from Brazil to Burkina
Faso and Mexico to Indonesia—as a cost-effective redistribution tool for which
governments can claim credit.
Tied to strict eligibility criteria and conditionalities like the recipients keeping
their children at school and attending medical check ups, CCTs—delivered
mostly to women as representatives of the household—aimed to break the cycle
of intergenerational poverty by advancing human capital (World Bank 2009).
Based on their means-tested provision linked to strict conditions and rather par-
simonious benefits, the CCTs resemble the poverty relief instruments of the
“liberal welfare states” à la Esping-Andersen (1990). Tied to concrete eligibility
criteria and co-responsibility of the beneficiaries, they are often considered pana-
cea against political discretion and, hence, a major break with the past (IDB
2015; Sugiyama and Hunter 2013).
We argue, however, that the ways in which governments regulate these pro-
grams might hinder or facilitate political discretion, which is a common practice
in many developing countries. Based on their implementation at multiple levels
and substantial reach—more than 20 percent of the population in Mexico and
Brazil (Cecchini and Atuesta 2017)—CCTs may provide ample ground for politi-
cal discretion. The regulatory design is key to understanding how the newly
flourishing welfare regimes in these countries can eschew clientelism,1 which
deteriorates the welfare of the poor (Díaz-Cayeros and Magaloni 2009), muddles
their political preferences, and, hence, hampers political competition, an essen-
tial constituent of democracies (de la O 2015).
Focusing on the selection and recertification of CCT beneficiaries—the pro-
cesses where regulatory instruments come into play—we examine the varieties of
regulatory regimes in the CCT programs in Brazil, Mexico, and Turkey. Adopting
Mill’s method of difference, we select these cases with similar levels of per capita
income 2 and parallel legacies of highly stratified Bismarckian conservative welfare
states and treat them as the “most similar cases” (Eckstein 1975). All three coun-
tries are trapped in the upper-middle-income group3 and are members of the
G20. They simultaneously went through similar drastic transformations, shifting
from state-led import-substituting industrialization strategy (1930s–1980s) to a
market-oriented model with varying nuances (Özel 2011, 2014; Schneider 2013).
Unlike most advanced countries, they adopted neoliberal policies in the 1980s
in the absence of well-established welfare states and the presence of large infor-
mal markets (Holland and Schneider 2017). Their welfare regimes expanded
starting in the 1990s at the critical juncture of accelerating integration of their

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VARIETIES OF REGULATORY WELFARE REGIMES
225
national markets to the global and regional ones. They evolved from “truncated”
welfare states—that offered restricted social insurance tied to employment; pro-
vided flat or regressive transfers; and kept barriers to access, resembling
Bismarckian conservative typology (Esping-Andersen 1990), yet in a highly lim-
ited fashion due to the sole coverage of urban formal labor—to more universal-
istic ones (Díaz-Cayeros Estévez, and Magaloni 2016; Holland 2018).
Echoing the “hybridization” that Leisering (2011, 2012) conceptualized, we
show the ways in which hybrid forms have been incorporated into the regulation
of fiscal transfers, bringing complex sets of actors together in these three coun-
tries. The adoption of regulatory instruments makes social assistance a policy
field where fiscal transfers intersect with the regulatory state, exemplifying the
regulatory welfare state (RWS). Adding up to Levi-Faur’s (2014, 599) emphasis
that “the regulatory state may strengthen the welfare state,” we suggest that an
appropriately regulated welfare state situated at the intersection of social policy
and regulation might also strengthen democratic institutions through limiting
politically driven redistribution.
Given that redistribution is germane to political manipulation, regulatory
instruments would (ideally) function to eliminate such manipulation by means of
setting, enforcing, and monitoring varying rules in fiscal transfers at distinct
stages of selection (targeting, identification, and registering) and recertification
of beneficiaries. Analyzing the roles of multifarious actors (public and private
alike) in implementation, as well as regulatory instruments and processes set in
the selection and recertification processes, this article poses the following ques-
tions: How do the regulatory processes adopted in distinct polities mold discre-
tionary spaces? What accounts for varieties of regulatory welfare states in
different countries? The article explores the room for political discretion embed-
ded in respective regulatory regimes—either created intentionally or emerging
as unintended outcomes.
To understand the ways in which regulatory instruments are adopted in these
three upper-middle income countries, we carried out extensive archival research
on official documents and policy papers of public authorities related to condi-
tional cash transfers; reports and assessments of international organizations and
evaluating agencies; along with press releases and media sources on the subject
matter. Additionally, we conducted eighteen semi-structured in-depth interviews
with the officials in charge of selection and recertification processes of the CCT
programs as well as experts of social policy in the respective countries (five in
Brazil, six in Mexico, and seven in Turkey, face-to-face, and via email and phone).
Bringing together and cross-checking the findings of the interviews with archival
data, we analyze the variation across these three cases regarding the formation of
distinct types of regulatory welfare states.
Drawing on these three cases with well-established CCT programs run by
central governments, we find noteworthy differences in the regulatory design of
selection and recertification and the roles of...