Universalism ‘Crowds in', Size ‘Crowds out': The Paradoxical Relation Between the Welfare State and Social Capital

The paper investigates the relation between the welfare state and social capital by considering: the degree of decommodification in conjunction with social spending; the multi-dimensional nature of social capital; and multiple individual-level predictors that also control for the amoral familism theory. The findings, based on Structural Equation Modeling, suggest that welfare states with high degrees of decommodification, which also manage to contain social spending, seem to crowd in social capital. The degree of decommodification is also, together with income and religious affiliation, the most important predictor of social capital. In addition, an excessive concern for the immediate family does seem to crowd out social capital. From a theoretical perspective, the empirical results partially confirm the concern of neoclassical and communitarian theorists for the crowding out effect of large welfare states, and fully support the contention of the institutional theorists that universal welfare states contribute to crowding in social capital.