Searching for Equity and Efficiency: Transformations in Public Policy and State Expenditures in Portugal, 1960-2011

Debates about the evolution of Portugal, while frequently stressing tremendous levels of progress since the 1960 turn towards economic openness, often ask questions about incomplete modernity or convergence with European norms. This paper addresses these debates by examining transformations in Portuguese state expenditure and public policy from the last years of the dictatorship through democratization and integration in Europe in six principal areas: welfare state transfers, education, health, immigrant incorporation and gender policy. In the first section, the paper charts these transformations over time, mapping trends and moments of greatest change and correlating them with political and economic conditions. It also evaluates Portugal’s position in frequently used typologies of variation such as worlds of welfare capitalism, varieties of capitalism, the Migrant Integration Policy Index, and indices of gender empowerment. In the second section, the focus narrows to the last 10 years, when increasing concerns about the growth of the state led to efforts at budgetary consolidation, control of state expenditure, and tax reform, often with failed or only temporary results. Since 2009, as a result of the global recession and pressures on Portugal’s sovereign debt, these efforts have become ever more urgent. We examine the dilemmas of budgetary consolidation in a country where the state has grown large, economic growth has turned anemic, but where social needs remain high.