Welfare State: Definition, Function, Pros, and Cons (Explained)

What is Welfare State?

The welfare state is a state of a kind of governing system, during which the government acts an essential role within the security and betterment of the economic and social well-being of its people, primarily for those in financial or social need, employing grants, pensions, subsidies, and other interests.

State of welfare is a government program built up with the purpose of the welfare of its people. As its name suggests, the government’s main aim is to enhance the livelihood of its general people. Most of the modern democratic countries are welfare states.

To understand more about it, let’s go to discover it,


The distinct features of the welfare state are:

An instrument for social welfare: The welfare state is basically dedicated to the well-being (welfare) of its citizens. It seeks to provide basic amenities to all people, remove poverty, hunger, and unemployment, and bridge the gap between the rich and poor. It aims to establish social and economic equality.

A compromise between individualism and socialism: The welfare state, chooses itself to be in mid-point between the two extreme theories and practice of individualism and socialism, opts for a between them. It gives equal importance to both individual and state which means that it values both the liberty of the individual and the interests of the society. The state is considered the friend and guide of the individual and the society.

Based on democratic principle: The welfare state is a democratic state. It functions through democratic institutions and in a democratic way where people have all the rights to determine their political and socio-economic fate.

Guarantees equal rights to all: The welfare state ensures every citizen with equal rights irrespective of caste, class, religion, etc. This provision of rights enhances a step towards fulfilling duty by its citizens.

Development through planning: The welfare state seeks to provide welfare to its people through planned programs. It follows the mixed economy model of development. The state controls and regulates the economy through planning. Industrial policy, trade policy, commercial and banking policy, etc. are framed to control economic activities.

Agent of moral development of citizens: The welfare state creates a conducive environment for the moral development of individuals. When the individual can meet his basic needs of life and enjoys fundamental rights and freedoms, his self-confidence grows and his personality develops. The development of social morality makes the state strong and individuals happy.


The objectives of the welfare state include;

  • To provide Social Equality
  • To Provide Economic Security
  • To provide Political Security
  • To Achieve International Cooperation
  • To Seek Public Welfare
  • Cultural Development

Functions of Welfare State

Some of the important functions of a welfare state are compulsory functions and optional functions. Describing these functions,

Compulsory Functions:

The compulsory functions basically include the public safety and security duties of the state. In modern times, the responsibilities and functions of governments have increased beyond limits. Some of the main functions are as follows;

Maintenance of law and order: Protection from internal disturbances, disorders, civil wars, and settlement of disputes among the people. For this purpose, the state maintains policies, police, etc. maintain peace, law, and order in society by controlling crimes, anti-social elements, and malpractices.

Protection from foreign invasion: Protection from external threats, aggressions, terrorism, and war. For this purpose, the state maintains armed forces such as Army, Navy, etc.

Providing justice to the people: For this purpose, the state establishes and maintains a network of courts in all parts of the state.

Establishment of diplomatic relations with other nations: The state always is conscious about maintaining international relations and fulfilling duties as a member of the international forums.

Protects rights and freedom of the people: The state work towards protecting the rights of people by institutionalizing them. Human rights are another important part of the state function.

Governing natural resources: The state makes arrangements for the preservation, protection, and systematic exploitation of the country’s natural resources to create development.

Regulating national monetary policy: State regulates national monetary policy to balance the inflation rate in the state.

Optional Functions:

Besides the compulsory functions of the Welfare State, there are also other social and economic functions as follows;

Social Functions:

The welfare state acts as a very important agency of social transformation. For this, it carries out the following functions;

Creating social equality: The Welfare State works to create social and gender equality by granting equal rights and freedoms, equal opportunities to people. It does not discriminate between citizens based on religion, caste, color, sex, race, wealth, and place of birth.

Creating social justice: The State tries to secure a just and fair society by giving special facilities and opportunities to the poorer and backward sections of society. E.g. untouchability is considered a crime punishable under law. Special facilities have been provided to women, children, marginalized groups, and the poor through reservation benefits to provide social justice.

Social security: The state enacts laws, implements policies and programs for the old aged, physically disabled, and unemployed people. So, the state attempts to provide benefits to the weaker sections of society. The programs and policies for poverty eradication are other important functions of the state.

Control of social evils: The progress and prosperity of society needs, eradication of social evils. For this purpose, the state makes laws and acts to eradicate social evils such as child marriage, dowry, child labor, bonded labor, prostitution, untouchability, etc.

To provide public utility services: To provide services to its people, the state makes arrangements for the supply of amenities such as electricity, water, roads, transport services, post, telephone services, radio, T.V., etc.

Provision of education and health facilities: Education and health are considered the most important necessities of the people. So, to make these sectors viable and accessible to all, the state provides educational institutions assistance and scholarships to poor and meritorious students. Similarly, the state establishes hospitals, dispensaries, maternity homes, child health care centers, etc., and also made medical services less costly to poor and disabled people.

Environmental protection: The state formulates and implements necessary policies, laws, and programs for environmental protection.

Moral reform: The state welfare activities help citizens in need and therefore it teaches them the humanity and feeling of kindness and helpfulness thus help them to be moral citizens.

Economic functions:

The economic functions of the welfare state include the following;

Economic security: The State acts as an important agency for raising the standard of living of its citizens. The state makes arrangements for the provision of basic needs such as food, clothing, housing, health, and education to its people. It is one of the primary functions of the state to solve problems of poverty and unemployment so as raise the living standard of its people.

Planning functions: Another important function of the state is to formulate and implement development plans. The state makes plans to utilize its resources for the benefit of the common people. In Nepal, the three Years Plan has been in practice that has prioritized economic development by focusing on different sectors such as tourism, agriculture, poverty eradication, health, and education, etc.

Make regulation regarding trade and commerce: State regulates trade (both domestic and foreign trade) and commerce to bring economic development. State formulates and implements the import-export policy for promoting foreign trade, fixes custom duties, formulates monetary policy, regulates banks, all financial institutions. The state also works for protecting the interests of the consumers and laborers.

Imposition and collection of Tax: The source of state revenues is tax collection. The imposition of tax and its collection is basically done to carry out development activities within the state.

Advantages and Disadvantages of Welfare State

Social welfare systems or policies of the state have a wide range of advantages concerning the population’s wellbeing.

Advantages of Welfare State

Equitable distribution of resources and opportunities: To ensure social and economic equity, welfare states make policies and arrangements for equitable distribution of resources to their people be it physical resources or opportunities.

Social insurance: Social insurance is the basis for the social welfare system of most countries across the globe. Under social insurance for example adequate support is provided to lower-income households.

Provision of necessities of life: Provision of services, particularly education, health, and housing, and, in some countries, a range of caring and community services are the basic components of a welfare state.

Help to the weaker section of the society: The welfare state provides caring services to the children, old aged and disabled and the subsidies and grants to the poor weaker sections of the society to help them enjoy their life and live with dignity.

Maintains peace and order: The welfare state introduces various laws and policies to maintain social order.

Welfare programs can help reduce crime: People will do whatever it takes to have their basic needs met. If there is a lack of basic human needs then, then the crime becomes an option. Well-designed welfare programs work to meet the basic needs of people making it possible to reduce crimes resulted from desperation.

It has some micro-level implications: While there are obvious macro-level benefits of welfare, it also has a few micro-level implications. E.g. people who would lose their jobs and become unemployed temporarily can take advantage of welfare and sustain their livelihood until they find their next work. Without such a program, those who are recently unemployed would be compelled to sell their homes or other assets, as there might be lesser opportunities to retain back to normal situations.

Disadvantages or Criticism of Welfare State

Risk of fraud: There are chances that the welfare scheme may not serve those who truly need it rather is exploited by the powerful ones. So, welfare schemes are always at risk of fraud.

Make people dependent: By providing money to the unemployed, it can encourage the feeling of dependence over the state that results in less motivated workers and deterioration of skills and knowledge.

Many welfare programs don’t address the root cause of poverty: It is of no permanent solution to poverty unless the root cause of it is addressed by the welfare state because the welfare programs may not continue for eternity as all welfare nations are not economically strong enough.

It might not be able to sustain long-term support: Some welfare programs do not have the capacity to help people in the long run because of the insufficient budget. In fact, there are not enough welfare programs, which exist today, that can sustain the population’s growing needs.

Costly administration: As the welfare state has to put lots of economic efforts into the well-being of the needy, the funds are surprisingly huge and therefore the welfare system is costly and poor countries with this system may be at risk.

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