Why we need an allocative (and resourceful) welfare state

Vol. 41 No. 4 (2021)

Published November 11, 2021

How to Cite

Kerstenetzky, Celia Lessa. 2021. “Why We Need an Allocative (and Resourceful) Welfare State”. Brazilian Journal of Political Economy 41 (4):745-59. https://doi.org/10.1590/0101-31572021-3356.

Why we need an allocative (and resourceful) welfare state

Celia Lessa Kerstenetzky
Professora at Instituto de Economia da Universidade Federal do Rio de Janeiro – UFRJ, Rio de Janeiro/ RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 41 No. 4 (2021), Out-Dez/2021, Pages 745-759


In this essay, I propose an agenda for the welfare state of the 21st century that
emphasizes its role as a mechanism of resource allocation. Since social and environmental
problems are getting out of hand, the time for mere compensation is over: we need a
mechanism for directly influencing systems of production and patterns of consumption in
the direction of addressing those problems. This partially translates into a decisive sectoral
shift towards public social services led by the welfare state. Among the advantages of this
move, in addition to more socially balanced outcomes, are quality jobs and fulfillment of
social needs in an environment-friendly way. The allocative task which gives the welfare state a constitutive role in shaping the socioeconomy complements its classic function as problem
fixer. The allocative welfare state must be prepared to limit the domain of market allocation.

JEL Classification: I38, J08, P16.

Keywords: welfare state allocation public social services sustainability