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Globalization and the Future of the Welfare State

Globalization and the Future of the Welfare State

Miguel Glatzer
Dietrich Rueschemeyer
Copyright Date: 2005
Pages: 288
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  • Book Info
    Globalization and the Future of the Welfare State
    Book Description:

    In the last quarter of the twentieth century, the global political economy has undergone a profound transformation. Democracy has swept the globe, and both rich and developing nations must compete in an increasingly integrated world economy.

    How are social welfare policies being affected by this wave of economic globalization? Leading researchers explore the complex question in this new comparative study. Shifting their focus from the more commonly studied, established welfare states of northwestern Europe, the authors ofGlobalization and the Future of the Welfare Stateexamine policy development in the middle-income countries of southern and eastern Europe, Latin America, Russia, and East Asia.

    Previous investigations into the effects of globalization on welfare states have generally come to one of two conclusions. The first is that a global economy undermines existing welfare states and obstructs new developments in social policy, as generous provisions place a burden on a nation's resources and its ability to compete in the international marketplace. In contrast, the second builds on the finding that economic openness is positively correlated with greater social spending, which suggests that globalization and welfare states can be mutually reinforcing.

    Here the authors find that globalization and the success of the welfare state are by no means as incompatible as the first view implies. The developing countries analyzed demonstrate that although there is great variability across countries and regions, domestic political processes and institutions play key roles in managing the disruptions wrought by globalization.

    eISBN: 978-0-8229-7269-3
    Subjects: Political Science

Table of Contents

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  1. List of Tables and Figures
    (pp. vii-viii)
  2. 1 An Introduction to the Problem
    (pp. 1-22)

    In the last quarter of the twentieth century, and in particular in its last decade, the global political economy has been profoundly transformed. Democratic governance has prevailed in many countries, at least in the formal sense of repeated democratic elections and accountability of the state to elected representatives. At the same time, more economies have opened themselves to international trade and capital flows, while internally they have adopted a stronger market orientation. These two developments seem closely interrelated. In fact, many see them as two sides of the same coin, as in such formulas as “democratic capitalism” or “capitalist democracy,”...

  3. 2 Globalization, Democratization, and Government Spending in Middle-Income Countries
    (pp. 23-48)

    Research on the relationship between integration into international markets and the welfare state has a long and distinguished history. There are three major findings in the literature. First, countries that are more exposed to trade tend to have larger public economies, allowing governments to compensate those who are adversely affected by international competition (and maintaining political support for openness [Ruggie 1982]). The original result was for the rich countries of the Organisation for Economic Co-operation and Development (OECD) (Cameron 1978), but more recently Rodrik (1998) has shown that the positive trade-spending nexus holds for the developing world as well. Second,...

  4. 3 Economic Internationalization and Domestic Compensation: Northwestern Europe in Comparative Perspective
    (pp. 49-74)

    In the early nineties, unemployment rose dramatically in the Nordic countries and they joined Continental Europe, which had been suffering from this malady for a decade or more. The onset of chronic unemployment in both groups of countries was followed by cutbacks, albeit modest ones, in welfare state entitlements. The dominant interpretation among academic, political, and journalistic observers is that both the rise of unemployment and retrenchment of the welfare state in the region were a direct product of “globalization,” the increasing openness of the economies of the region not only vis-à-vis one another but also toward the world economy....

  5. 4 Globalization and Social Policy Developments in Latin America
    (pp. 75-105)

    Social policy in Latin America has undergone profound changes in the 1980s and 1990s. The thrust of the changes has pointed in the direction of state retrenchment and market expansion in the financing, delivery, and administration of social services and transfer payments. To the extent that the state has retained responsibilities for social services and transfers, they have become more targeted rather than more universalistic. There is no disagreement about the need for social policy reforms, but wide divergence of opinion about the desirable direction of the reforms exists. Proponents of the market-oriented changes are arguing that they have brought...

  6. 5 Revisiting ʺEmbedded Liberalismʺ: Globalization and the Welfare State in Spain and Portugal
    (pp. 106-129)

    Globalization is often seen as severely constraining national policy options in a wide variety of policy areas. Indeed, the even stronger view—that globalization will lead inexorably to downward pressure in social and labor market policy—is still widely asserted. By focusing on the case of Spain and Portugal, where openness and welfare state development occur contemporaneously, this chapter takes issue with that “strong view” of the negative effects of globalization on social and labor market policy. The chapter will show that globalization can place downward pressure at particular moments and in particular circumstances; but overall developments in Spain and...

  7. 6 Globalization and the Future of Welfare States in the Post-Communist East-Central European Countries
    (pp. 130-152)

    How has globalization influenced welfare state development in the post-Communist states? Since 1989 the leading east-central European accession states, Poland, Hungary, and the Czech Republic, have experienced radically different welfare state developments from their neighbors in the former Soviet Union. The first part of this chapter analyzes the “Europe effect” that we find to be the source of this differentiation and argues that globalization has not had a uniform impact on post-Communist welfare states. Rather, the effect of globalization differs greatly, depending on a country’s position in the international economy and geopolitical relations. We demonstrate that countries closer to the...

  8. 7 Globalization and the Politics of Welfare State Reform in Russia
    (pp. 153-178)

    The present volume has at its core two competing theses about the impacts of globalization on social welfare. The first claims that integration of established welfare states into global economic and policy networks leads to retrenchment. According to this “efficiency thesis,” stronger political economies lose control over welfare expenditures to the competitive pressures of international trade and financial flows, weaker ones to IMF conditionalities and creditors’ dictates as well. At the same time, international financial institutions (IFIs) promote welfare state restructuring according to a liberal paradigm of minimal public provision, targeting, and privatization that increasingly influences the principles and substance...

  9. 8 Globalization and Social Policy in South Korea The Politics of Social Protection and Structural Adjustment
    (pp. 179-202)

    Until recently, Korean society was unfamiliar with the concept of the welfare state. Welfare was thought of as social benefits that the state benevolently provided to the extremely poor and disabled. For a people accustomed to making a living through their own effort, welfare was never perceived in terms of social rights. Although the state had long been a tax collector, even in social emergencies it rarely provided people with cash assistance. Social benefits given to the extremely poor were rarely enough to live on, as these consisted primarily of small amounts of grains, condiments, garments, and small amounts of...

  10. 9 Conclusion: Politics Matters
    (pp. 203-226)

    In this concluding essay, we return to the questions raised in the opening chapter. We will closely review each of the studies that form the main body of this project. But at the same time, we will try to come to broader conclusions about the impact of globalization on welfare state development and will do so by exploring the social and economic mechanisms through which economic openness may affect social welfare policy. Of particular importance is how different aspects of economic globalization are related to the domestic factors that shape welfare state development.

    The studies assembled in this volume portray...