The Delegated Welfare StateMedicare, Markets, and the Governance of Social Policy

Abstract

This book explores the delegation of authority over American social programs to private actors. In the development of the American welfare state, policy-makers have often avoided direct governmental provision of benefits and services, turning instead to private actors for the governance of social programs. More recent versions of delegated governance seek also to create social welfare marketplaces in which consumers can choose from an array of private providers. This book examines both the reasons behind this persistent delegation of authority and the consequences. Focusing on the case study of Medicare—and, in particular, the 2003 Medicare Modernization Act—the book argues that fundamental contradictions in American public opinion help explain the prevalence of delegated governance. Americans want both social programs and small government, leaving policy-makers in a bind. To square the circle, policy-makers have contracted out public programs to non-state actors, including voluntary organizations and for-profit entities, as a way to mask the role of the state. Such arrangements also pull in interest group allies—the providers of these programs—who can help pass policies in a political landscape that is fraught with obstacles. Although delegated governance has been politically expedient, it has frequently come at the cost of effective administration and created problems of fraud and abuse. Social welfare marketplaces also suffer from the difficulties individuals have in making choices about the benefits they need. In probing both the causes and consequences of delegated governance, this book offers a novel interpretation of both American social welfare politics and the nature of the American state.