A reexamination of welfare states from an institutional perspective

Purpose - To explain a fiscal rule that functions in a different way from a constitutional ideal of a welfare state, as Japan's case, and to give a literary examination of that kind of thoughts in modern economics and theory of public finance. Design/methodology/approach - Compares neo-institutional economics and fiscal sociology about the role of a government, using recent fiscal data of developed countries. Findings - For neo-institutional economics it is difficult to explain "welfare state" that substitutes the role of a family because the approach can only explain a complementary relationship of organizations in higher levels with lower organizations. Practical implications - Points out that neo-institutional economics should be examined by a historical formation of each rule and a real legal system in each country. Originality/value - Discusses institutional economics and fiscal sociology from an aspect of possibility of applying to the field of public finance and social welfare.