Reforms of Social Insurance Governance in a Quasi-Bismarckian Welfare State: How Estonia Moved from Tripartism to Direct State Management

Abstract

Continental welfare regimes in Western Europe have in last decades gone through a set of paradigmatic reforms that significantly altered the initial Bismarckian principles of social insurance and welfare governance. Existing research overwhelmingly concludes that social partners have rendered up their power to the governments that inter alia facilitated expansion of non-contributory social security instruments. This article asks to what extent this reform trajectory can be found in quasi-Bismarkian welfare states, which already initially lacked solid social dialogue and favoured market-oriented approach to the social security. Tracing the process of main social policy governance reforms in Estonia 2009-2019 we test the assumption that fiscal prudence is in quasi-Bismarkian regimes important similarly to the typical Bismarckian countries, yet – it is achieved by using different means. The main empirical finding is that the governments in Estonia acted much more autocratically and used social insurance funds to execute various priorities of government programs. Differently from full Bismarckian regimes, insurance contributions were neither lowered nor complemented by tax instruments. We discuss these findings in the light of the institutional theory and welfare state change in times of increasing EU pressure.