In 1998, Walter Korpi and Joakim Palme published “The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality, and Poverty in the Western Countries.” The paper aimed to tackle the argument that targeting welfare programs to those with low market incomes reduces inequality and poverty more than not targeting them.

In their response, Korpi and Palme accept the basic math of the “targeting efficiency” claim but argue that it fails to consider the political effects such targeting has on support for increasing the size of the welfare budget. If (1) big, nontargeted welfare states reduce inequality and poverty more than small, targeted welfare states, and (2) targeting causes welfare states to be small, then (3) targeting is actually worse for inequality and poverty than not targeting.

This paper started a fire in the welfare-state discourse that still burns hot even today. A massive number of secondary papers have been written about the topic trying to prove or disprove its thesis with various cross-country regressions. And the basic argument has become boilerplate rhetoric for social democratic politics across the world.