From Welfare State to Enabling Society?

The following summary is reprinted with permission of the author and the (Canadian) Institute for Research on Public Policy. The essay, “The Enabling Society” written by social policy expert Peter Hicks, can be accessed by the link at the end of the summary. 

Summary:The Enabling Society

Amid growing concerns over the potential impact of population aging, ongoing globalization and rising income inequality, Canadian thinkers and policy leaders are once again actively debating the future of social policy. In the latest IRPP Policy Horizons Essay, social policy expert Peter Hicks argues that the conventional wisdom on how these forces will play out over the coming decade, and the solutions they require, is to a large extent misguided.

While it is well understood that the welfare state is under stress, there is little recognition that changing demographics, technology and public expectations are combining to push us in a completely new direction. Having spent his entire career as a practitioner in the field, Hicks makes the case that we are now entering a period of transformation that will touch all dimensions of social policy, from the design of programs and services to the way they are delivered and managed. As a result, a new model for social policy will be taking shape over the coming decade: the “enabling society.”

Indeed, after five decades of continuity and incrementalism, the welfare state finds itself increasingly at odds with reality. In today’s environment, social policy is confronted with needs and expectations that were not present when the welfare state was created:

demands for customized programs and services that are better aligned with individual citizens’ needs;
greater need for flexibility and alternative options to help people transition between work, education, care and family responsibilities over their life course; and
shifting public attitudes toward the instruments of social policy, with more support for tools that build individual capabilities (such as education) than for passive income support.
According to Hicks, the welfare state’s approach of addressing the broadly defined needs of broadly defined groups of beneficiaries in a broadly uniform manner at a single point in time is simply no longer adequate.

Over the next decade, he believes, policy-makers will be driven by necessity as well as by opportunity toward a new model: the enabling society. As the term suggests, the enabling society aims to make social policy more effective at helping individuals pursue their goals and achieve their full potential in life.

The objectives of the enabling society are not, as Hicks makes clear, at odds with the welfare state’s emphasis on collective aspirations, social insurance and poverty reduction. Rather it is a new way of thinking about the future of social policy and about how the welfare state can be modernized in order to provide programs and services that are more effective and better attuned to the needs and aspirations of the people they serve.

As envisioned by Hicks, the enabling society framework is contingent on a system of “big statistics” that will deliver detailed information to policy-makers, service providers and citizens themselves about the kind of interventions that have been shown to work best based on a given individual’s profile, needs and preferences. This evidence base would be integrated, in real time, into all aspects of the design, delivery and governance of social policy.

If what Hicks describes sounds like a radical departure from our current statistical system, it is. Just as recent advances in technology and data analytics have helped transform traditional operating models in the realms of sports, electoral politics and retail trade, he sees the overhaul of the statistical system as the first and necessary condition for more effective social policy.

The evidence base generated by the system of big statistics will complement other shifts that the enabling society will bring about, including the individualization of programs and services, the adoption of a life-course perspective, and the ongoing use of evidence-based information in designing and adapting policy. With a more robust capacity to measure and report outcomes, social policy will finally be able to implement a citizen-centred approach that also takes into account individual life paths. Moreover, with citizens having direct access to the same information, they will be better equipped and able to make their own choices or decisions on courses of action.

A major restructuring of Canada’s income security system will likely be required in order to follow through on these principles. Here, Hicks recommends reconfiguring the system around three pillars: guaranteed annual income, social insurance and lifetime accounts.

The first pillar would ensure that every Canadian has access to a relatively modest minimum income so that no one falls through the cracks. As Hicks notes, governments are not far away from achieving this objective thanks to programs such as the National Child Benefit Supplement/Canada Child Tax Benefit, the Working Income Tax Benefit and the Guaranteed Income Supplement/Old Age Security. Working in conjunction with provincial social assistance, these programs could be integrated or expanded to provide a simple yet meaningful income guarantee. Such an approach would help remove the current age bias between income support programs for seniors (GIS/OAS) and those directed at nonseniors, and would reduce the disincentive to work in older age.

The second and third pillars would delineate more clearly the two distinct roles that governments play in pooling risk to cushion citizens against major shocks and in helping them accumulate the resources needed to transition through the various stages of life. In recent years these two objectives have become intermingled as programs such as employment insurance (EI) have taken on new roles and responsibilities (parental, sickness and care leave, for example). This has created unintended disparities within the labour market between those who qualify for assistance and those who do not, making it difficult for many people to manage key transitions in life.

Hicks proposes refocusing EI and other social insurance programs on the core mandate of providing income replacement during periods of either unemployment or disability under the second pillar. The third pillar would then consist of a series of integrated lifetime accounts. These lifetime accounts would operate in a similar way to retirement and other tax-preferred savings accounts (RRSPs, TFSAs, RESPs), which allow accumulation of capital through direct contributions over time and follow individuals through life. The pillar would incorporate lifetime accounts that already exist (such as public pension and education saving programs), while extending the model to a number of other areas including the many special benefits programs currently administered within EI, as well as various tax credit and loan programs for individuals. There are a range of options for how such accounts could be used, financed and managed.

The combination of these changes across the income security system would yield a structure that Hicks argues is more coherent, provides better and more targeted support to those in need, and offers greater flexibility and freedom for individual Canadians in navigating through life’s transitions.

With better information, increased flexibility in life-course pathways, and greater customization of available programs and services, individuals would have greater choice and capacity to pursue their goals and aspirations.

The model that Hicks describes is not abstract. As he notes, important forces are beginning to reshape social policy at many levels. Though the transition to the enabling society will require concerted political leadership and important changes within government, he is both practical about how this can be done and hopeful that it can happen.

To be sure, not everyone will see the future unfolding as Hicks does. However it actually plays out, his essay makes clear the need for a critical re-examination of some of the basic thinking behind social policy in Canada and the future direction we wish to take.

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