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The Institutional Approach to Social Policy

The Institutional Approach to Social Policy

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https://economistsview.typepad.com/economistsview/2006/10/blaming_the_poo.html
https://www.prb.org/americanattitudesaboutpovertyandthepoor/
https://www.vox.com/first-person/2018/8/1/17637028/bernie-sanders-alexandria-ocasio-cortez-c
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The Handbook of Social Policy
The Institutional Approach to Social Policy
Contributors: James Midgley
Edited by: James Midgley & Michelle Livermore
Book Title: The Handbook of Social Policy
Chapter Title: “The Institutional Approach to Social Policy”
Pub. Date: 2009
Access Date: September 9, 2019
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781412950770
Online ISBN: 9781452204024
DOI: http://dx.doi.org/10.4135/9781452204024.n12
Print pages: 181-194
© 2009 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online
version will vary from the pagination of the print book.
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© 2009 by SAGE Publications, Inc.
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The Institutional Approach to Social Policy
JamesMidgley
Like other normative approaches to social policy, the institutional approach reflects a number of values and
beliefs about how peoples’ welfare can best be enhanced. The most fundamental of these is that social wellbeing is best promoted through collective action and the pooling of resources. Institutionalists point out that, throughout history, people have not only relied on their own efforts and the support of their families but have
formed local, community-based associations and organizations that augment individual and family resources to promote the well-being of the community as a whole. Cooperatives of many kinds have also emerged to pool resources and encourage collective action to attain economic, cultural, and social goals. During the period of rapid industrialization in the 19th century, workers formed trade unions and other associations to protect their interests and promote their well-being. In the 20th century, as working people and their representatives were able to exercise significant political influence, the agency of government was increasingly used to promote welfare goals. Progressive social legislation that regulated employment and working conditions and created new social service and income maintenance and support programs became the new collective means for achieving social well-being. As a result of these developments, supporters of the institutional approach
believe that social welfare can best be enhanced through the agency of government. Inspired by progressive liberalism and social democratic ideology, they contend that social needs should be addressed through a range of statutory interventions, including fiscal measures, legal regulations, and the provision of a comprehensive system of social services. They claim that these interventions institutionalize social programs, embedding them in the very fabric of society.
Institutional ideas were widely applied in social policy making during the 20th century, and they legitimated and even shaped the expansion of government intervention in social welfare. Institutional social policies and programs are characterized by their statutory authority, public funding, bureaucratic direction, and universality
of coverage. One of the most frequently cited examples of an institutional social program is the British national health service, which provides a range of tax-funded medical and health services to all citizens, irrespective of their ability to pay. Tax-funded child benefits and universal social insurance programs are also typical of
institutional social welfare.
Although most Western nations have programs of this kind, those in Western Europe, and particularly in Scandinavia, are usually extolled for exemplifying institutional ideals. Because these countries introduced extensive social service programs that cater to the population as a whole, they are often described as welfare
states. It is claimed that these welfare states successfully modified the economic market to combine the wealth-generating power of capitalism with social goals and that they found a viable middle way between unfettered capitalism and authoritarian communism.
This chapter describes the institutional approach. It traces it historical origins in the progressive reforms of social democratic and liberal governments that sought to expand statutory social welfare at the end of the 19th century and during the 20th century. The writings of academic thinkers who advocated institutional ideas
are also discussed. After summarizing the salient features of the institutional approach, the chapter concludes with a brief appraisal of its contribution, as well as an assessment of its potential role in shaping social policy making in the future.
History of the Institutional Approach
The evolution of the institutional approach was propelled both by ideas and by developments in the world of
politics and policy making. Academic scholars played a critical role in formulating institutional principles, drawing on religious teachings, progressive social thought, utopianism and socialism. Their writings melded with the activism of working people, the campaigns of social reformers, and the political programs of progressive
governments committed to harnessing the resources and power of the state to promote social welfare goals.
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As was noted earlier, the institutionalist agenda is motivated by the belief that peoples’ welfare can best be
enhanced through the agency of government. Historically, the governments of the Western countries played
a very limited role in social welfare, and social well-being was regarded as the product of individual effort,
supported by families and kin, and, in the case of those who could not meet their own needs, as the benevolent work of the church and the charities. It was during the reign of Elizabeth I that the state first began to assume a significant role in social welfare. The Elizabethan Poor Law of 1601 is regarded as a milestone in
the evolution of public welfare, laying the foundation for the expansion of state involvement both in Britain and
the United States.
The idea that governments should alleviate social distress and enhance the welfare of their citizens gained momentum during the late 19th century. Reform-minded politicians, intellectuals, trade union members, religious leaders, and middle-class activists believed that governments could ameliorate social wrongs and improve social conditions, and they urged political leaders to take action to address these ills. They drew extensively on the findings of social surveys and statistical studies to expose social injustice and social neglect, and they campaigned for the regulation of working conditions, the prohibition of child labor, the end of economic
exploitation, and the introduction of social services. Because of these activities, the end of the 19th century is known as the Progressive Era. As was shown in Chapter 8, the efforts of progressive reformers resulted in the creation of new social programs such as mothers’ pensions and workmen’s compensation. However,
efforts to introduce health or unemployment insurance and comprehensive contributory retirement pensions
were not successful at the time.
Another important development was the introduction of social insurance. Social insurance originated in Germany in the 1880s and was soon adopted in other European countries. In the United States, the campaign to introduce social insurance resulted in the enactment of the Social Security Act in 1935. The Social Security
Act is regarded by many social policy writers as the crowning achievement of the New Deal and the nation’s single most important social welfare program. Social Security is also one of a few social programs in the United States to be based on institutional ideas.
Many scholars believe that the New Deal institutionalized the principle of government responsibility for social welfare (Dolgoff & Feldstein, 1980). However, others do not think that the American people have ever fully accepted the principle of government welfare responsibility, and they contend that the United States remains
a “reluctant welfare state” (Jansson, 2005). Nevertheless, the New Deal did lay the foundations for the subsequent expansion of social policy during the 1960s when President Johnson’s War on Poverty and Great
Society programs were established. Together with the Progressive Era, periods of social policy expansion
such as the New Deal and the War on Poverty were significant not only because government involvement
in social welfare increased but also because they popularized the idea that social welfare is the legitimate
responsibility of the state.
Theoretical Ideas
By the 1950s, academic writers began to formulate theories about the role of the state in social welfare. Scholars such as Harold Wilensky and Charles Lebeaux (1958) were among the first to provide an explanation of
the growth of government involvement in social welfare in the 20th century. They expounded the thesis that
the expansion of government responsibility is an inevitable by-product of industrialization. Because industrialization undermined traditional welfare institutions (such as the extended family) and created new social problems that demanded concerted action, governments were compelled to intervene. Marxist writers (Ginsberg,
1979; Gough, 1979; Offe, 1984) rejected this interpretation, arguing instead that the state became involved
in social welfare to prevent social unrest and preserve the interests of capitalism. Social democratic scholars
(Korpi, 1983; Stephens, 1979) took a different position, claiming that the expansion of government involvement in social welfare was the result of the struggle of working-class movements and their allies to use the
state for progressive social purposes. These theoretical explanations were augmented by normative accounts
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that were less concerned with the causes of the expansion of government involvement in social welfare than
with its legitimation. Although Wilensky and Lebeaux sought to explain the expansion of government social
programs, they formulated an important typology of two major social policy approaches that subsequently
had a powerful influence on normative thinking about social welfare. They argued that social policies and programs could be classified as either residual or institutional. The residual approach, they suggested, advocated
a very limited role for government while the institutional approach favored extensive government intervention
and urged the provision of comprehensive social services and income maintenance and support programs.
Their use of the term institutional social policy was soon adopted by other scholars who favored government
social welfare provision.
T. H. Marshall and Richard Titmuss of the London School of Economics in England made a major contribution
to the development of the institutional approach, and their writings were very influential not only in Britain but
in other parts of the world as well. Their writings were well received in the United States, and both helped
popularize the institutional approach in the country’s social policy circles. Titmuss visited the United States on
many occasions and became friendly with several academic leaders in the field of social policy as well as a
number of key federal government policy makers.
Marshall (1950) argued that government social welfare provision is the culmination of the historical evolution
of citizenship rights. Historically, the rights of citizenship were not accorded to all human beings. Slaves, peasant farmers, laborers, and workers were not regarded as citizens and were not permitted to share the rights
enjoyed by the aristocracy. However, the ambit of citizenship was gradually extended as civil and then political rights were granted. Marshall contends that the development of citizenship also requires the extension of
social rights. People who live in poverty, and who are badly housed and poorly educated, cannot be regarded
as citizens in the proper sense of the term. For this reason, the state must ensure that they have rights to an
adequate income, housing, and education. The government must establish these rights in law and guarantee
that they will be fulfilled. Marshall’s ideas provided an appealing normative basis for state intervention in social welfare. Social rights are as sacred as civil and political rights and should be guaranteed and fulfilled by
the state.
Titmuss did not develop Marshall’s thesis to any significant extent but, in various publications (1958, 1968,
1971, 1974), he offered a compatible set of ideas that provided additional normative justifications for government welfare. He injected a strong ethical element into the debate, arguing that social welfare should be
the collective moral responsibility of citizens. Because the state represents its citizens, he believed that it is
the proper agency through which they discharge their collective responsibility and give expression to their
altruistic intentions. In modern industrial societies, government welfare provision is the most efficient way of
expressing altruism. He claimed that the use of the market is not only inefficient but morally repugnant. Institutionalized altruism through the state increases reciprocity and promotes social solidarity. Also, because the
social services redistribute resources, society becomes more equal and feelings of solidarity increase. Altruism, solidarity, and equality all promote the ideals of the Good Society.
Diverse influences permeate Titmuss’s writings. He was an active member of the British Fabian society and
committed to its brand of democratic socialism. He was also a great admirer of Richard Tawney, the British
Christian socialist, and it is clear that Christian and utopian elements inform Titmuss’s work. He was also influenced by earlier institutionalist writers such as the 19th century economist Thorstein Veblen, who railed
against the excesses of affluence in American society. Veblen inspired Titmuss’s own brand of social criticism,
which was fiercely directed at the proponents of individualism and the free market.
Titmuss drew a sharp distinction between economic and social goods. The former, he believed, are appropriately bought and sold on the economic market. The latter should only be delivered through collective means
of provision. He was particularly critical of commercial social services in the United States, which he believed
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undermined the altruistic and moral imperatives of social welfare. Nevertheless, as noted earlier, his ideas
were well received in the United States and had a significant influence on the expansion of government social
programs. Many social policy scholars in the United States accepted his view that social welfare is an expression of altruism. Many also agreed with Marshall that access to the social services and income maintenance
is a social right.
As was reported in the first chapter of this book, Titmuss played in major role in promoting the academic study
of social policy at the London School of Economics where he greatly enhanced the scholarly agenda of the
Department of Social Science and Administration. The department had been founded in 1911 as a social work
training program, but after his appointment as its first full professor in 1950, Titmuss expanded its scope and
recruited an interdisciplinary faculty who soon increased its reputation and influence in government circles.
Most British universities followed the example of the London School of Economics and established similar
academic departments that promoted scholarly inquiry into social policy. These developments also helped
strengthen social policy teaching and research at schools of social work and public policy in the United States.
The electoral successes of radical right-wing political groups in the 1980s posed a serious challenge to the
proponents of the institutional approach. Budgetary retrenchment, privatization, contracting out, decentralization, and other innovations introduced by right-wing governments in different countries facilitated the emergence of a far more pluralistic social welfare system than institutionalists such as Titmuss would have approved, or even envisaged. Many commentators now believe that the institutional approach has run its course
and that economic, demographic, electoral, and attitudinal changes will further undermine state involvement
in social welfare. Apart from a small group of American writers who are known as neo-institutionalists (Evans,
Rueschemeyer, & Skocpol, 1985), there appears to be limited support for the institutional approach in social policy circles today. This is not the case in most Western European nations, but, even here, government
responsibility for social welfare has been heavily criticized (Alesina & Giavazzi, 2006; Sinn, 2007), and few
now believe that the state’s involvement in social welfare will expand further. On the other hand, a number of
social policy scholars continue to promote institutionalist ideas. G?sta Esping-Andersen’s (1990) widely cited typology of different welfare regimes advocated decommodification in social welfare. Decommodification
refers to the rights of citizens to receive social services and income maintenance benefits without having to
meet employment and other requirements. Others have campaigned for the introduction of universal income
support programs, such as a guaranteed or basic income, to be paid to all citizens irrespective of their income
and needs (Fitzpatrick, 1999; Standing, 2002; Van Parijs, 1992). They draw on institutionalist ideas, but so
far, their proposals have not been implemented on a significant scale.
Features of the Institutional Approach
As was noted earlier, the term institutional social welfare was coined by Wilensky and Lebeaux, who contrasted the narrow role government historically played in providing residual social services to the most conspicuously needy with the institutional approach that creates comprehensive social programs for all citizens. They
claimed that a gradual historic shift from residual to institutional welfare was taking place and that this shift
was resulting in the acceptance of social welfare as a normal, first-line function of society. Social welfare, they
argued, was being institutionalized.
Wilensky and Lebeaux’s account made a significant and durable contribution to the articulation of the institutional approach. However, their work did not fully encompass all of the dimensions of this approach. At the
time their book was published, Titmuss had not articulated his own theory of collective altruism, which provided a moral legitimation for state social welfare. Nor did they discuss Marshall’s ideas on social rights. Although
drawn from their definition, it is extended in the following account by examining these and other contributions.
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State Collectivism and Institutionalism
Collectivist ideology accords prime importance to collective forms of association in which people share resources and decision making. Cooperatives, trade unions, communes, and, ultimately, the state are examples
of collectives. Collectivists believe that the state is jointly owned by its citizens and that shared decision making is a function of representative democracy. They also believe that the state is the most effective agent for
meeting social needs.
Institutionalists are essentially collectivists even though they differ in the extent to which they advocate state
responsibility for social welfare. Most believe that government should not merely augment but transcend the
traditional role of the extended family, the community, and philanthropic endeavor and assume a fundamental
responsibility for social welfare. Others advocate a less extensive role for the state. While many institutionalists support a pluralistic conception that includes public support for nonprofit agencies, most reject commercial
services, accepting Titmuss’s view that the market is an inappropriate mechanism for meeting social needs.
Marxists are collectivists, but most contend that the provision of statutory social services by liberal and social
democratic governments in capitalist society does little to promote social welfare. For this reason, institutional
collectivism is usually associated with social democracy and progressive liberalism.
Although the Marxist critique of the institutional approach exerted some influence in academic circles in the
1970s, it was eclipsed by the Radical Right. As was noted earlier, right-wing movements and governments
mounted an effective attack on institutional ideas and began to dominate social policy thinking in the 1980s.
Critiques offered by Milton Friedman (1962), Martin Feldstein (1974), and other economists claimed that government social programs had weakened the economy and were responsible for the high unemployment and
inflation that characterized the 1970s. Social policy writers such as George Gilder (1981) and Charles Murray
(1984) argued that government social programs had failed miserably to eradicate poverty and instead had
created an impoverished underclass of people who became dependent on government aid. Murray was applauded by many Republican politicians for his insistence that state welfare had done more harm than good.
Lawrence Mead (1986, 1997) attacked Marshall’s notion of social rights claiming that it had been abused.
Rights, he contends, are not unconditional but involve reciprocal obligations. Many of those claiming social
benefits do not discharge their obligations to society and should not be provided with services or financial
aid. The writings of these and other critics of government welfare contributed significantly to the retrenchment
of public social programs and the declining influence of institutionalist thinking in social policy circles in the
1980s.
Universality and Selectivity
Institutionalists believe that government intervention should be comprehensive and universal in scope. Although governments have been involved in social welfare on an organized basis since Elizabethan times,
their involvement has historically been targeted at the most needy through means-tested programs. The institutional approach requires that government social programs cater for all citizens, irrespective of income, and
ensure that they are protected against the contingencies of modern life. Titmuss (1968) was a severe critic of
selective, means-tested social services. These services were not only meager but also stigmatized recipients
and were often punitive. Although he campaigned for their replacement with universal social services, meanstested approaches continued to dominate social provisions in most Western countries even during the most
generous years of the welfare state. In the United States, means-tested programs such as Aid for Families
with Dependent Children (AFDC), which has been replaced by the Temporary Assistance for Needy Families
(TANF) program, have long been criticized for their stigmatizing and punitive effects.
It is for this reason that institutionalists favor the adoption of universal social services such as social security,
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health insurance, and child allowances. An added dimension to their universalism is the idea that government
social services should be culturally accepted and embedded in society. Together with fiscal measures and
statutory regulation, the social services should meet social needs, subsidize incomes, redistribute resources,
and raise standards of living for all. This means that social welfare must transcend its traditional safety net
function and become an integral com ponent of modern social life.
Critics of universalism reject these arguments and claim that there is no point in spending public revenues on
those who do not need assistance. By targeting the social services, the government is better able to focus
scarce resources on the poor. Their ideas have recently been used to criticize Social Security, which is one of
the few universal social programs in the United States. Critics contend that it would be more cost effective if
Social Security were replaced with a means-tested program catering for the elderly poor and by commercially managed savings accounts that would accumulate the contributions of workers and provide an adequate
income when they retire. Those who have accumulated sufficient savings and have private pensions would
then be spared the expense of paying onerous Social Security taxes. Although President George W. Bush
attempted to introduce private savings accounts, his proposals were rejected by the Congress, and Social
Security remains intact. Nevertheless, it continues to be condemned by writers on the political right for being
wasteful, harmful to economic growth, and unnecessary (Blahous, 2000; Feldstein, 1998; Tanner, 2004).
Institutionalism and Social Rights
Reference was made earlier to Marshall’s (1950) theory of social rights, which provided an appealing normative rationale for the institutional perspective. Marshall argued that the ideal of citizenship requires that
civil and political rights be accompanied by social rights. By ensuring social rights, governments foster social
justice and meet the ideals of the welfare state. Although Marshall’s ideas were widely adopted and formed
the basis for the legal campaigns fought by welfare recipients in the 1960 and 1970s (Nadasen, 2005), they
were attacked scholars such as Lawrence Mead (1986, 1997) who, as was shown earlier, argued that the
payment of income benefits to people who refuse to work or meet their social obligations to society amounts
to a travesty of the social rights idea. Although he agrees that citizens do have social rights, Mead argues
that they are also obligated to do their best to meet their own social needs and contribute to the well-being
of society as a whole through working and being responsible citizens. It is only when they are unable to work
and contribute to society that they have a legitimate right to claim assistance.
Mead’s writing inspired the Republican Party’s approach to welfare reform, which resulted in the enactment
of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996. This legislation rejects the
argument that income benefits should be paid to needy people on the basis that they have a right to an adequate income. Instead, workfare and many other requirements now accompany the payment of these benefits. These requirements are believed by the proponents of the legislation to have a desirable impact on the
lifestyles of the poor. Others are less sanguine about the future well-being of those who have been adversely
affected by this legislation. They point out that relatively few welfare leavers, as they are known, have found
employment in regular, well-paid jobs that meet their social needs (Acs & Loprest, 2004; Besharov, 2003;
Goldberg & Collins, 2001). Some even believe that this legislation was never intended to help needy people
find employment and become self-sufficient but that it, in fact, functions to control the poor and particularly
poor women of color with children, who have historically been the victims of negative stereotypes and discriminatory practices (Bell, 2006; Mink, 1998).
Institutionalism, Pragmatism, and the Middle Way
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Although the institutional approach is inspired by progressive liberalism and social democratic ideas, it lacks
the ideological fervor that has characterized much of the social policy literature of the Radical Right and Marxist Left. It is not that institutionalists have no ideological commitment but rather that their ideological proclivities are tempered by a historical preference for empiricism and pragmatism.
The historical development of the institutional approach was significantly influenced by the use of empirical
research for social reform purposes. Studies of poverty, child labor, and other social ills were effectively used
by social reformers to expose social problems and promote social change. Institutionalism has also been influenced by the philosophical methodology of pragmatism. Pragmatism stresses the need to test the veracity
of knowledge through experience. It rejects a priori theories, requiring that intellectual claims be verified before being accepted. Pragmatism contributed to a distrust in institutional circles of grand theories, such as
Marxism, that offered appealing but abstract explanations and prescriptions.
This preference for pragmatic thinking has prompted the criticism that institutionalism is both atheoretical
and ideologically limited. Robert Pinker (1971) lamented the lack of theoretical sophistication in institutionalist
thinking, while Karl Popper (1961) characterized institutionalists as engaging in “piecemeal social engineering.” However, as Ramesh Mishra (1977) observed, pragmatism is consistent with the institutionalists’ reform
agenda. Unlike Marxism and other grand theories that are committed to the radical transformation of society,
the reformism espoused by institutional-ists is much more likely to be concerned with practical matters and
incremental social reform.
Although the reformism of the institutionalist approach has been ridiculed by radicals on both the political
right and left, institutionalists claim that their middle-way position between unfettered capitalism and authoritarian communism has fostered significant social improvements and high standards of living in those nations
that have implemented institutional ideas. The Western European welfare states have made significant social
gains by combining social welfare with economic growth. The wealth-generating vigor of capitalism has been
successfully harmonized with social welfare. In addition, this blending has been achieved without coercion
or intrusive authoritarian statism. However, it is interesting that, with the collapse of Soviet communism in
the 1990s, the middle way adopted by institutionalists should have been challenged by the claim that institutionalism is itself an extreme position and that a new “Third Way” between free-market capitalism and social
democratic institutionalism needs to be found (Giddens, 1998, 2000).
In this regard, several scholars have speculated on whether the European welfare state is a manifestation of
socialism or capitalism. Some writers believe that the welfare state gives expression to democratic socialist
ideas, while others contend that it is essentially capitalist in nature (Ginsberg, 1979; Gough, 1979; Marshall,
1971; Offe, 1984). On the other hand, Pinker (1979) argued that the welfare state should not be regarded as
a variant of either capitalism or socialism but as a new and distinctive social formation with its own unique
features.
As was noted earlier, the institutionalists’ claim that the welfare state represents the best form of social organization has been challenged by both the political left and right. Marxists argue that the welfare state legitimizes
capitalism and fails to address fundamental social needs and injustices. Those on the political right argue
that it has sapped the vitality of enterprise, impeded economic growth, created a dependent and unproductive underclass, and undermined cherished moral values. These latter ideas have gained significant electoral
support and have seriously undermined the institutionalist position.
Altruism and the Moral Imperatives of Social Policy
Reference was previously made to the work of Richard Titmuss, who formulated a conception of social policy
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that emphasized the moral aspects of institutionalizing social welfare. His analysis went beyond an account
of the advantages of engaging the state in social policy. It is not only that the state has the authority and resources to address soci

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