Starting out from seminal political economy approaches on preferences for social policy what matters for welfare demand are factors such as income inequality, skill specificity, risk aversion, uncertainty, social mobility and belongingness to either an ethnic or religious group. But what happens to the importance of these factors when the stable background of high-income democratic states dissolves? In low- and middle-income countries neither well functioning institutions nor a well-organized economy can be taken for granted. On the contrary, the size of the informal sector is considerably large so that a major part of the working population is even exempt from the welfare state while developing countries struggle at the same time with the enforcement of legal- and fiscal capacity, putting the reliability of the welfare state at stake. Which factors account for welfare preferences in such a setting? The paper argues that it is precisely these contextual factors, which influence people's welfare preferences, hypothesizing that a weak state with only a small population of contributors discourages people's expectation in the public welfare system. Using a multilevel analysis of public opinion data for more than 50 democratic countries, from high- to low-income economies, the article examines how the level of state capacity and the size of the informal sector relate to individual demand for state-led welfare provision. The empirical model employed in the article takes into account that individuals are nested in countries by explicitly modeling macro level variables. In line with the theoretical expectations, findings indicate that welfare demand is positively affected by increased state capacity, next to a range of individual level factors. The analysis strongly advocates for the application of hierarchical modeling and the explicit analysis of developing country particularities in order to understand social policy preferences in less affluent democracies.
