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Studies 21 August, 2014

The Welfare State in Egypt, 1995- 2005: A Comparative Approach

Ahmed Ezz Eldin

​Ahmed Ezz Eldin is a former research assistant at El Walid Bin Talal American Studies Center, and the American University in Cairo. He is a youth activist who represented Egypt in several international events, and a member of Beta Gamma Sigma International Honors Society. Currently, he works as a research assistant in TUSIAD Competitiveness Forum in Istanbul. His current research is focusing on Middle Eastern politics and Economy. 


Since the 1990s, the literature on the variations of welfare regimes has been growing. Esping-Andersen triggered the debate when he published his typology of the Western welfare states in 1990, which was followed by a series of modifications to his original typology.[1] The debate has remained largely confined to the developed world. However, the welfare regimes of some developing countries have recently been studied, including Latin American and Eastern European states as well as China and Turkey. As a continuation of these studies, this paper places the Egyptian welfare state within the existing typologies. The analysis of the Egyptian welfare state shows similarities with the Latin American, Chinese, and Turkish models, which suggests the possibility of forming an analytical category for developing countries’ experiences of welfare. However, this would require introducing some amendments to the original typology in order to make it more suited to the welfare regimes in question.

This paper surveys seven main welfare schemes and social safety nets in Egypt. The analysis focuses on the period from 1995 to 2005, a decade which witnessed the increasing privatization of the public sector alongside the growing impact of globalization. It does not overlap with major international shocks like the First Gulf War and the financial crisis, and thus represents the core of the Mubarak era stability. Another reason is that detailed data and studies on the Egyptian economy during this period are readily available. In addition, no major social policy changes with the effect of restructuring the Egyptian welfare state occurred between 2005 and the end of the Mubarak regime in 2011. However, when appropriate, the time period has occasionally been extended. The first section summarizes the relevant literature. The second section presents a history of the Egyptian welfare state and analyzes its components. The last section places Egypt’s experience within the existing typology and offers important concluding remarks about the typology and its possible future extensions.  

The Typology of Welfare Regimes

Most of the existing literature on the subject, the applied studies in particular, focuses on the welfare states in developed countries. A few attempts have been made to extend the models to incorporate the experiences of developing countries in Asia, Latin America, Eastern and Central Europe.[2] These have introduced some modifications to the original models and provided useful insights. To our knowledge, no classifications have been made of the welfare states in the MENA region or in Africa, nor in most of the Asian developing countries.  

Esping-Andersen bases his classification on two main concepts: de-commodification and social stratification. De-commodification refers to the degree to which individuals can maintain a socially acceptable standard of living independently of market participation.[3] Social stratification refers to how the welfare state creates a system of strata in its own right. Social policy may create social divisions, especially if it is restricted to the less well-off and if it is stigmatizing. It can be an explicit form of class politics and represent a consolidation of existing divisions among wage earners.[4] In addition, de-familialism, a related concept, describes the extent to which an individual’s welfare is independent of his or her household status.[5] Modern welfare regimes have thus been classified through empirical investigation of a set of developed countries using these main concepts.   

In order to assess the level of de-commodification of a welfare regime, three dimensions should be studied. The first concerns the rules that govern people’s access to benefits: eligibility rules and restrictions on entitlements. A program has a high de-commodification potential if access to it is easy and the right to an adequate standard of living is guaranteed regardless of previous employment record, performance, needs, or financial contributions. The level of income replacement constitutes a second dimension. A benefits recipient is likely to get to work sooner if the benefit level falls substantially below his normal earnings, or below the adequate standard of living in the society. Thirdly, the range of entitlements provided is of crucial importance. The highest of the entitlement schemes is a social wage paid to citizens regardless of the cause, but it also includes unemployment, sickness, disability, and old age benefits.[6] Following these criteria, three welfare state models were originally identified. The liberal model offers entitlements where there is demonstrable or abject need by focusing on needs and on the use of means- or income-tested social programs. The second type of welfare state, the conservative model, conditions the right to entitlements upon a blend of labor market participation, financial contributions and the logic of actuarialism. The third type, the social democratic model, is based on the idea of the rights of citizenship, regardless of the degree of need or work performance. Eligibility usually depends on being a citizen of the country or a longtime resident.[7] There appears to be a clear overlap between high de-commodification and strong universalism in the Scandinavian social democratic model. There is an equally clear coexistence of low de-commodification and strong individualistic self-reliance in the liberal Anglo-Saxon nations. Finally, the continental European countries adhere more to a conservative model, with a strong corporatist and statist basis, as well as modest levels of de-commodification.[8]

The second basis for classification is the social stratification caused by each of the three regimes (liberal, conservative, and social democratic). The system of stratification in the liberal system leads to population division where there is a minority of low-income state dependents, and a majority of people able to afford private social insurance plans. Women are encouraged to participate in the labor force, especially in the service sector, due to the individualistic nature of the society. The conservative model features three important characteristics of stratification. First, the direct influence of the state is restricted to maintaining income benefits related to occupational status. Second, labor force participation of married women is discouraged to maintain the traditional family structure. Third, the state will only intervene when the family’s capacity to aid its members is exhausted, which is called the subsidiary principle. This tends to preserve status differentials. For instance, in its statist version, civil servants have special rights, while in its corporatist manifestation, social insurance schemes depend on social status. The role of churches is also highlighted in this regime.[9] Finally, the social-democratic regime focuses on social solidarity with the aim of maximizing capacities for individual independence. Women are encouraged to participate in the labor force, especially the public sector.[10]

Three main criticisms have arisen against Esping-Andersen’s concept of de-commodification and its classifications. The first concerns his classification of the southern European states of Italy, Spain, Portugal and Greece; while he ignores the last three, he classifies the first among the corporatists. However, according to other researchers, the southern European welfare states can be seen as a separate cluster.[11] The main characteristics of this group are the proclamation of the right to welfare and work, the semi-institutionalized promise of the welfare state, the fragmented system of income guarantees linked to one’s job, generous benefits without an articulated net of minimum social protections, healthcare as a right of citizenship, particularism in cash benefits and revenue, financing through contributions and cash benefits, a high percentage of social expenditure financed through contributions, and low social expenditure as a percentage of GDP. A second criticism of Esping-Andersen was his classification of the antipodes as liberal regimes due to their high dependence on means-tested social programs. However, according to Castles, they have a more particular and inclusive approach to social protection than the standard liberal welfare regimes.[12] A large part of the population receives some means-tested benefits as a result of the relatively high thresholds for recipients. Also, redistribution has been traditionally pursued through wage controls and employment security rather than social programs. Esping-Andersen reacted to this by adding a fourth category, the radical welfare state regime. The third criticism regards the gender dimension, missing in the classification. Gender analysis suggests that there are whole areas of social policy that the Esping-Andersen typology misses, including women’s exclusion or inclusion in the labor market, discrimination in social rights, and the gendered division of paid or unpaid work.[13] Orloff argues that in order to understand gender de-commodification based on state-administered social programs, two supplementary dimensions need to be addressed: access to paid work, and ability to maintain an autonomous household.[14] Also, with regard to the family, Daly and Lewis argue that different styles of social policy have incorporated key aspects of social welfare differently.[15]

The work of Esping-Andersen has thus triggered a burgeoning literature on the classification of welfare states. Leibfried, Castles and Mitchell, Siaroff, Ferrera, Korpi and Palme, and Bonoli have developed similar models based on the original classification.[16] Most of them have adopted an approach and a conceptual scheme similar to Esping-Andersen’s, though a few have attempted a different approach to classification. For instance, Bonoli rejects the de-commodification concept entirely and looks rather at two other factors: the extent of the welfare state (social spending as a proportion of GDP), and the way the welfare state is financed (the percentage of social expenditure that is financed through contributions).[17] An important reaction to this wave of defining studies is a strong criticism of the idea of classification altogether. Kasza argues that most countries “practice a disjointed set of welfare policies due to the following typical features of welfare policy making:

  1.  the cumulative nature of welfare policies,
  2.  the diverse histories of policies in different welfare states,
  3.  the involvement of different sets of policy actors,
  4.  variations in the policy making process, and
  5.  the influence of foreign models.”[18]

As a result, as a country’s policies multiply and age, the possibility of classifying them in a coherent regime becomes more unrealistic. 

In addition to these modifications and criticisms, attempts have been made to extend the model beyond the initially studied set of countries. Kwon and Jones identify an East Asian or Confucian welfare state regime which is characterized by “conservative corporatism without Western-style worker participation, subsidiarity without the church, solidarity without equality, laissez-faire without libertarianism.”[19] Simply, it’s a household economy welfare state with a traditional Confucian style. It should be noted that this model was mostly confined to the Asian Tigers which makes it still largely inapplicable to many less developed Asian countries.

Esping-Andersen’s typology and its extensions have also been employed to study some of the welfare regimes in developing countries. In order to study Latin American countries, a distinction was made between the periods before and after the 1980s. During the first period, the Latin American welfare regime resembled the conservative European model in southern European countries.[20] Social policy focused on supporting the male breadwinner of the family through an occupationally stratified social insurance scheme and job protection. However, it differed from the European model in the sense that in Europe, social insurance and job protection did not go beyond the formal sector; therefore the Latin American model, in that era, is described as “conservative/informal.”[21] With regard to stratification, an individual’s type of employment was the primary factor since formal employment was the gate to social welfare. After the lost decade, market provision increased which introduced a shift in the system to a “liberal/informal” model.[22] Similarly, the Turkish welfare regime is characterized by Bismarckian formal social security, with a certain incorporation of informality, family aid and clientelism. It shows a strong resemblance to the southern European model, or more accurately the “conservative/informal” model of Latin America.[23] In a different context, Ringen and Ngok have studied the Chinese welfare regime and drawn attention to the state’s mismanagement, creating a gap between the policy goals of universalism and the results which may be biased toward certain groups.[24] The hybrid nature of the Latin American and Turkish regimes, their incorporation of the informal sector, and the consequences of state mismanagement observed in the Chinese welfare system are factors that could be relevant in many developing countries. 

Despite these criticisms, the standard typology can still provide relevant insights about welfare states. As Arts and Gelissen argue, such criticisms are unfair as the typology meets three important conditions.[25] The first is that the typology is a valid and reliable instrument for classifying welfare states. The second is that the typology is a means to an end, not an end in itself, since it aims, and manages, to explain cross-national variations in social behavior and attitudes. The third reason is that the construction of the theory of the welfare state is still in its infancy. Having said that, it is crucial to point out that the welfare state cannot be regarded as the sum total of social policies; it is more than a numerical accumulation of discrete programs.[26] Accordingly, this framework allows for an approximate understanding of welfare states, but a full understanding of the welfare regime of a country must go beyond the limitations of a classification scheme.

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[1] Esping-Andersen, The Three Worlds of Welfare Capitalism.

[2] Gough and Wood, Insecurity and Welfare Regimes in Asia, Africa and Latin America; Kwon, “Beyond European Welfare Regimes: Comparative Perspectives on East Asian Welfare Systems”; Barrientos, “Latin America: Towards a Liberal-Informal Welfare Regime”; Fenger, “Welfare Regimes in Central and Eastern Europe; Choi, Y.-J., “Coming to a Standstill?”; Barrientos, “Labor Markets and the Hyphenated Welfare Regime in Latin America.”

[3] Esping-Andersen, The Three Worlds of Welfare Capitalism, 37.

[4] Lelkes, “A Great Leap towards Liberalism? The Hungarian Welfare State,” 93.

[5] Esping-Andersen, Social Foundations of Post-Industrial Economies.

[6] Esping-Andersen, The Three Worlds of Welfare Capitalism, 47.

[7] Esping-Andersen, The Three Worlds of Welfare Capitalism, 48.

[8] Esping-Andersen, The Three Worlds of Welfare Capitalism, 77.

[9] Esping-Andersen, The Three Worlds of Welfare Capitalism, 27. 

[10] Esping-Andersen, The Three Worlds of Welfare Capitalism, 28.

[11] Leibfried, “Towards a European Welfare State?”; Ferrera, “The ‘Southern’ Model of Welfare in Social Europe”; Bonoli, “Classifying Welfare States”; Trifiletti, “Southern European Welfare Regimes.”

[12] Castles, Comparative Public Policy.

[13] Lewis, “Gender and the Development of Welfare Regimes”; O’Connor, “Gender, Class and Citizenship”; Or loff, “Gender and the Social Rights of Citizenship”; Sainsbury, Gender, Equality and Welfare States; O’Connor, Orloff, and Shaver, States, Markets, Families.

[14] Orloff, “Gender and the Social Rights of Citizenship.”

[15] Daly and Lewis, “The Concept of Social Care,” 289.

[16] Leibfried, “Towards a European Welfare State?”; Castles and Mitchell, “Worlds of Welfare”; Siaroff, “Work, Welfare and Gender Equality”; Ferrera, “The ‘Southern’ Model of Welfare”; Korpi and Palme, “The Paradox of Redistribution”; Bonoli, “Classifying Welfare States.”

[17] Bonoli, “Classifying Welfare States.”

[18] Kasza, “The Illusion of Welfare Regimes,” 277-280.

[19] Kwon, “Beyond European Welfare Regimes”; Jones, “The Pacific Challenge.”

[20] Barrientos, “Latin America: Towards a Liberal-Informal Welfare Regime.”

[21] Barrientos, “Latin America: Towards a Liberal-Informal Welfare Regime.”

[22] Barrientos, “Labor Markets and the Hyphenated Welfare Regime in Latin America.”

[23] Bugra and Candas, “Change and continuity”; Grutjen, “The Turkish Welfare Regime.”

[24] Ringen and Ngok, “What Kind of Welfare State is Emerging in China?”

[25] Arts and Gelissen, “Three Worlds of Welfare Capitalism or More?” 140.

[26] Esping-Andersen, “Welfare States and the Economy,” 712.