The Market Failure Paradox: Political Contention in the U.S. Welfare State

Emily Parker, Cornell University

Policies targeting the poor have historically attracted intense partisan conflict in the United States. But this political backlash is not inevitable, and insufficient theoretical attention has focused on why some social policies encounter more controversy than others. This study exploits an unusual case in which two policies that shared the same purpose, period, and national context diverged in political outcomes. Specifically, I leverage the presence of political contention within Medicaid—the federal-state health insurance program for the poor—to understand its absence in the Community Health Center (CHC) program—an expansive federally funded network of clinics targeting underserved communities. Drawing upon primary documents collected from seven presidential archives (1965-2001) as well as other historical sources, I find that initial policy designs led to the divergence of both discursive opportunity structures and the acquisition of elite support. Specifically, policymakers’ articulation of frames aligning with both morals and markets allowed the CHC program to resonate across ideological divides, whereas Medicaid’s lack of market alignment and pervasive framing as inequitable inhibited its political support. Developing a concept of the market failure paradox, I contend that framing antipoverty policies as correcting for market failures subverts contestations over morality, deservingness, and race that are often at the epicenter of political conflict in the U.S. welfare state.

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 Presented in Session 198. The politics of markets