John Barrdear : I tend to think of models with multiple equilibria in this situation. For the sufficiently wealthy and healthy, their current state is enough, on average, to ensure that they stay healthy and save for a rainy day (the current recession's demonstration of sub-rationality aside). For the sufficiently poor and sick, their current state renders them unable to improve their position.

The immediate implication is one of temporary government involvement to lift the poor and the sick up to the higher state. The secondary implication is to contemplate the political economy of such a scenario and how to convince the government to reduce itself once it has got (nearly) everybody up to the higher state.

cam : I suspect there is a visibility aspect to it as well. It is like the "what have the Romans ever done for us, other than ..." style of Monty Python joke. Then again the Roman system for the voting citizen was highly social democratic, grain was given out without cost, Egypt was important for that reason alone and a reason why the emperor Augustine kept it as his private pro-consulship. The Aedile position was also one of public works, building aqueducts, etc. The Greeks had a word for public works too, can't recall what it was now, but basically the wealthy classes had to give money over to works in order to keep social stability.

I recall the Islamic group that installed itself in Somalia taking a similar tack to Hamas and Hezbollah by establishing their governing legitimacy with social services. They got run out of town by violence, but Islam and its internal organization makes it a quick candidate to bring order and services to chaotic regions that suffer from poor or a lack of governance.