Partisan agreements in unstable economic currents: revisiting the politics of the Spanish welfare state

According to most scholarship, the politics of Southern Europe have historically been characterized by a divided left, cultural polarization and conservative domination (Korpi, 2006; Manow, 2013; Watson, 2008). Tied to lack of fiscal and administrative capacity, this political scenario would explain the lack of development and conservative character of Mediterranean welfare states (Beramendi et al., 2015; Ferrera, 1996; Garritzmann et al., 2022). Nevertheless, the Spanish welfare state has undergone an unstable yet cumulative trajectory of welfare expansion and social investment recalibration. In this paper, we explain this trajectory by reviewing current conceptions on the politics of Southern Europe. We argue that the direction of welfare state change in Spain is steered by relative partisan consensus, while its pace its conditioned by an unstable fiscal capacity. We bolster this argument with a two-step empirical approach. We firstly review the overall welfare trajectory across different partisan governments. Secondly, we delve into political processes of pension, minimum income and family leave reform. In short, long-term inter-party agreements have supported key welfare state reforms such as pensions, work life balance, lifelong learning and active labor market policies. While partisan discrepancies around labor market regulation persist, social-democratic and left-wing parties have successfully garnered broad parliamentary consensus to approve and sustain improvements in these fields. The conservative party has not only favored these reforms from opposition, but it has also implemented active labor market and work-life balance policies, especially during favorable economic periods. Meanwhile, harsh austerity retrenchment has taken place under governments of different colors under the overwatch of the European union in a crisis context. We explain this relative partisan agreement by reviewing the nature of political cleavages in Spain and its institutional context. Firstly, although strong polarization exists in cultural or territorial issues, it does not seem to permeate the field of the welfare state to the same extent (León et al., 2022). Secondly, although it is true that there have never been grand coalitions, the country operates under a parliamentary system where minority governments frequently necessitate inter-party cooperation within legislative institutions (Field, 2009). This fosters cross-party agreements for welfare state recalibration. However, relative partisan agreement contrasts with the effect of economic cycles on the direction of welfare reform. In this respect, although most scholars point out the excessive weight of pension expenditure, old age and survivor pension expenditure have also remained lower than the European average. Hence, we argue that fiscal capacity in Spain is not simply low but cyclical, due to characteristics of its political economy. Very pronounced domestic economic cycles combine decreased state revenues with abrupt escalations in unemployment expenditure, while the EU has periodically bounced back to request budget adjustments. As a result, the trajectory of the Spanish welfare state seems to be more conditioned on the economic situation than on government partisanship.