Rudra, N, and S Haggard. 2005. Globalization, democracy, and effective welfare spending in the developing world. Comparative Political Studies 38, no. 9: 1015.
"The results show that social spending in 'hard' authoritarian regimes is more sensitive to the pressures of globalization than in democratic or intermediate regimes" (1015; from abstract).
"Our findings cast substantial doubt on the hypothesis that globalization necessarily has an adverse effect on welfare spending in developing countries. We find that political institutions and the rules governing political competition matter. In the face of increasing trade openness, in particular, authoritarian regimes are less generous than democracies with respect to social spending and do worse with respect to several key social performance indicators. Also of significance, we find that under conditions of globalization, 'intermediate' authoritarian regimes show different social spending patterns than 'hard' authoritarian regimes and in some cases, behave more similar to democracies" (1017).
Rudra, N. 2008. Welfare states in developing countries: unique or universal? The Journal of Politics 69, no. 02: 378-396.
Rudra further promotes a distinction between three types of welfare states in LDCs: productive welfare (promote market development), protective welfare (protect select interest groups) and combinations of the above.
Showing posts with label Welfare. Show all posts
Showing posts with label Welfare. Show all posts
Monday, March 23, 2009
Wibbels: Dependency Revisited
Wibbels, E. 2006. Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World. International Organization 60, no. 02: 433-468.
"While increased exposure to the global economy is associated with increased welfare effort in the OECD, the opposite holds in the developing world. These differences are typically explained with reference to domestic politics. Tradables, unions, and the like in the developing world are assumed to have less power or interests divergent to those in the OECD-interests that militate against social spending. I argue that such arguments can be complemented with a recognition that developed and developing nations have distinct patterns of integration into global markets. While income shocks associated with international markets are quite modest in OECD, they are profound in developing nations. In the OECD, governments can respond to those shocks by borrowing on capital markets and spending counter-cyclically on social programs. No such opportunity exists for most governments in the developing world...Thus, while internationally-inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption (and particularly consumption by the poor) across the business cycle" (1; from abstract).
"More specifically, I argue that exposure to international markets affects social spending in developing nations through two steps: first, by increasing the volatility of domestic economies and exposing them to severe business cycles; second, by inspiring pro-cyclical fiscal responses to downturns that imply cuts in social spending" (3).
"While increased exposure to the global economy is associated with increased welfare effort in the OECD, the opposite holds in the developing world. These differences are typically explained with reference to domestic politics. Tradables, unions, and the like in the developing world are assumed to have less power or interests divergent to those in the OECD-interests that militate against social spending. I argue that such arguments can be complemented with a recognition that developed and developing nations have distinct patterns of integration into global markets. While income shocks associated with international markets are quite modest in OECD, they are profound in developing nations. In the OECD, governments can respond to those shocks by borrowing on capital markets and spending counter-cyclically on social programs. No such opportunity exists for most governments in the developing world...Thus, while internationally-inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption (and particularly consumption by the poor) across the business cycle" (1; from abstract).
"More specifically, I argue that exposure to international markets affects social spending in developing nations through two steps: first, by increasing the volatility of domestic economies and exposing them to severe business cycles; second, by inspiring pro-cyclical fiscal responses to downturns that imply cuts in social spending" (3).
Iversen and Cusack: The Causes of Welfare State Expansion
Iversen, Torben, and Thomas Cusack. 2000. The Causes of Welfare State Expansion: Deindustrialization or Globalization? World Politics 52: 313-349.
"It is commonplace to argue that the increasing openness of national economies has meant growing economic insecurity. This insecurity once supposedly fueled demand for larger welfare spending as a form of insurance. The rising tide of globalization, however, is now widely seen as a hindrance to a government's ability to meet these demands and even as a cause of government cutbacks. An alternative view combines this 'second image reversed' with a concern for the political power of labor and the left. This revisionist perspective suggests that the challenges promoted by globalization when met by strong left-labor power within the domestic political system combine to produce a compensation strategy that entails a large and vibrant welfare state. This paper challenges both these views. Our argument, in short, is that most of the risks being generated in modern industrialized societies are the product of technologically induced structural transformations inside national labor markets. Increasing productivity, changing consumption patterns, and saturated demand for products from the traditional sectors of the economy are the main forces of change. It is these structural sources of risk that fuel demands for state compensation and risk sharing" (313).
The economic structure of employment has shifted dramatically. There is no longer such a strong focus on agriculture or industry, two sectors that previously were quite important. This paper contends that governments have responded to this change in three ways: 1| governments have promoted the movement towards jobs in service sectors and have compensated those who take this risk; 2| promote employment in public services; 3| have not promoted public or private opportunities and have promoted things like early retirement.
"The argument that globalization leads to welfare state expansion rests on two causal mechanisms. First, trade and capital market integration is said to expose domestic economies to greater real economic volatility, which implies higher income and employment risks for workers. Second, greater labor- market risks are hypothesized to generate political demands for expansionary spending policies that will cushion and compensate people for such risks" (317). This is strange, as international labor market risk may be a substantive reality, but the most important question is whether this international labor market risk is greater than the domestic labor market risk. The authors do not find increased labor market volatility in the countries explored during this period, thus brining previous analyses into question.
"Our results strongly suggest that deindustrialization, not trade or capital market openness, is the driving force behind the expansion of government spending on both transfers and services. Nevertheless, it could be objected that deindustrialization may itself be a consequence of trade and financial openness or that it was caused by, not causing, government spending" (339).
"It is commonplace to argue that the increasing openness of national economies has meant growing economic insecurity. This insecurity once supposedly fueled demand for larger welfare spending as a form of insurance. The rising tide of globalization, however, is now widely seen as a hindrance to a government's ability to meet these demands and even as a cause of government cutbacks. An alternative view combines this 'second image reversed' with a concern for the political power of labor and the left. This revisionist perspective suggests that the challenges promoted by globalization when met by strong left-labor power within the domestic political system combine to produce a compensation strategy that entails a large and vibrant welfare state. This paper challenges both these views. Our argument, in short, is that most of the risks being generated in modern industrialized societies are the product of technologically induced structural transformations inside national labor markets. Increasing productivity, changing consumption patterns, and saturated demand for products from the traditional sectors of the economy are the main forces of change. It is these structural sources of risk that fuel demands for state compensation and risk sharing" (313).
The economic structure of employment has shifted dramatically. There is no longer such a strong focus on agriculture or industry, two sectors that previously were quite important. This paper contends that governments have responded to this change in three ways: 1| governments have promoted the movement towards jobs in service sectors and have compensated those who take this risk; 2| promote employment in public services; 3| have not promoted public or private opportunities and have promoted things like early retirement.
"The argument that globalization leads to welfare state expansion rests on two causal mechanisms. First, trade and capital market integration is said to expose domestic economies to greater real economic volatility, which implies higher income and employment risks for workers. Second, greater labor- market risks are hypothesized to generate political demands for expansionary spending policies that will cushion and compensate people for such risks" (317). This is strange, as international labor market risk may be a substantive reality, but the most important question is whether this international labor market risk is greater than the domestic labor market risk. The authors do not find increased labor market volatility in the countries explored during this period, thus brining previous analyses into question.
"Our results strongly suggest that deindustrialization, not trade or capital market openness, is the driving force behind the expansion of government spending on both transfers and services. Nevertheless, it could be objected that deindustrialization may itself be a consequence of trade and financial openness or that it was caused by, not causing, government spending" (339).
Avelino, Brown and Hunter: The Effects of Capital Mobility, Trade Openness, adn Democracy on Social Spending in Latin America
Avelino, G, DS Brown, and W Hunter. 2005. The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980-1999. American Journal of Political Science 49, no. 3: 625-641.
"Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation" (625; abstract).
"Several empirical patterns emerge from our analysis. First, different measures of trade openness produce radically different results: previous empirical results based on exchange rate conversions are reversed when using a trade measure based on purchasing power parities (PPPs). Second, democracy has a strong and positive correlation with social spending. Third, financial openness does not constrain government spending on social programs. Finally, trade openness has a strong positive impact on the resources devoted to educational and social security while democracy's impact on spending results from increased expenditures for education" (625-6).
The DV they use is a combination of the % of population over 65, unemployment, the level of development, growth, urbanization, democracy, financial openness, trade openness, inflation all over gdp.
Key findings: "(1) democratic regimes spend more on social programs than do their authoritarian counterparts; (2) trade, as measured by purchasing power parities, tends to enhance rather than diminish social spending; and (3) financial openness has little systematic bearing on social spending"
"Trade openness (using PPPs) has a positive (though not always statically significant) impact on aggregate spending, and a strong positive and significant association with spending on social security and education" (637).
"Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation" (625; abstract).
"Several empirical patterns emerge from our analysis. First, different measures of trade openness produce radically different results: previous empirical results based on exchange rate conversions are reversed when using a trade measure based on purchasing power parities (PPPs). Second, democracy has a strong and positive correlation with social spending. Third, financial openness does not constrain government spending on social programs. Finally, trade openness has a strong positive impact on the resources devoted to educational and social security while democracy's impact on spending results from increased expenditures for education" (625-6).
The DV they use is a combination of the % of population over 65, unemployment, the level of development, growth, urbanization, democracy, financial openness, trade openness, inflation all over gdp.
Key findings: "(1) democratic regimes spend more on social programs than do their authoritarian counterparts; (2) trade, as measured by purchasing power parities, tends to enhance rather than diminish social spending; and (3) financial openness has little systematic bearing on social spending"
"Trade openness (using PPPs) has a positive (though not always statically significant) impact on aggregate spending, and a strong positive and significant association with spending on social security and education" (637).
Friday, December 19, 2008
Wibbels: Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World
Wibbels, E. 2006. Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World. International Organization 60, no. 02: 433-468.
"While increased exposure to the global economy is associated with increased welfare effort in the OECD, the opposite holds in the developing world" (1). The author presents a case that this can be partially explained by the different patterns of engagement with the global economy that are taken by either developed or less developed countries. "Thus, while internationally-inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption...across the business cycle" (1).
"In this paper, I complement the emphasis on domestic factors by placing them in international context. In discussing the incentives of governments and actors in tradable sectors, I emphasize the importance of fiscal constraints rooted in distinctly patterns of integration into global markets. While national income shocks associated with international markets are quite modest in the global north, they are profound in developing nations. In the global north, governments can respond to those shocks by borrowing on capital markets and spending counter-cyclically on social programs. No such opportunity exists for most governments in the developing world that have limited access to capital markets in tough times, more significant incentives to balance budgets, tradable sectors that are sensitive to currency fluctuations, and as a result cut social spending at exactly the times it is most needed. Thus, while internationally-inspired income shocks in no way threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption...across the business cycle" (3).
LDCs are in a tight bind because they are encouraged to cut spending when external financial shocks enter their borders. Also, these shocks are more pronounced as they have made themselves more vulnerable to business cycles and market dynamics through a deregulated capital market.
"I argue that he findings on the relationship between trade dependence and welfare effort result, in part, from a dependent position in the global economy and the ways in which that position shapes the interests of key domestic actors. More specifically, exposure to volatile international markets inspires sever internationally-inspired business cycles prevents governments from engaging in counter-cyclical spending to smooth consumption during recessions" (7).
"While increased exposure to the global economy is associated with increased welfare effort in the OECD, the opposite holds in the developing world" (1). The author presents a case that this can be partially explained by the different patterns of engagement with the global economy that are taken by either developed or less developed countries. "Thus, while internationally-inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption...across the business cycle" (1).
"In this paper, I complement the emphasis on domestic factors by placing them in international context. In discussing the incentives of governments and actors in tradable sectors, I emphasize the importance of fiscal constraints rooted in distinctly patterns of integration into global markets. While national income shocks associated with international markets are quite modest in the global north, they are profound in developing nations. In the global north, governments can respond to those shocks by borrowing on capital markets and spending counter-cyclically on social programs. No such opportunity exists for most governments in the developing world that have limited access to capital markets in tough times, more significant incentives to balance budgets, tradable sectors that are sensitive to currency fluctuations, and as a result cut social spending at exactly the times it is most needed. Thus, while internationally-inspired income shocks in no way threaten the underpinnings of the welfare state in rich nations, it undercuts the capacity of governments in the developing world to smooth consumption...across the business cycle" (3).
LDCs are in a tight bind because they are encouraged to cut spending when external financial shocks enter their borders. Also, these shocks are more pronounced as they have made themselves more vulnerable to business cycles and market dynamics through a deregulated capital market.
"I argue that he findings on the relationship between trade dependence and welfare effort result, in part, from a dependent position in the global economy and the ways in which that position shapes the interests of key domestic actors. More specifically, exposure to volatile international markets inspires sever internationally-inspired business cycles prevents governments from engaging in counter-cyclical spending to smooth consumption during recessions" (7).
Rudra: Globalization and the Decline of the Welfare State in Less-Developed Countries
Rudra, N. 2003. Globalization and the Decline of the Welfare State in Less-Developed Countries. International Organization 56, no. 02: 411-445.
This article begins by noting that there is quite a lot of literature that deals with the question of how the welfare state is being affected by increased global capital. Much of this literature focuses on more developed countries and concludes that there is not, in fact a problem. This article paints a different picture, and focuses more heavily on developing countries. Rudra attempts to show that developing and developed countries react to capital mobility differently, and that welfare states in developing countries may not be robust enough to fight off the pressures of international capital. "I show that in the face of globalization labor in LDCs has been unable to prevent the dismantling of the welfare state, quite unlike labor in the more developed countries" (411-2).
"In LDCs, low-skilled labor is highly abundant, yet persistent collective-action problems accompanying globalization undermine labor's political clout in LDCs. I assess these two opposing effects by introducing a new indicator of labor power (potential labor power, PLP). My results clearly indicate that the collective-action problems of labor in countries with large pools of low-skilled and surplus workers tend to offset labor's potential political gains from globalization" (413).
The current literature is explored.
The globalization experiences of developed and less developed countries are compared.
The theory is presented.
The data are analyzed. It is a large-n study.
"Does the conventional wisdom that globalization adversely affects welfare spending hold true in LDCs? This investigation of fifty-three LDCs from 1972 to 1995 shows that welfare spending in these countries does indeed respond to greater trade flows and capital mobility. These findings challenge others who do not show that globalization affects welfare spending in developed and developing nations differently. Growing numbers of low-skilled workers relative to skilled workers, coupled with large surplus-labor populations, exacerbate the collective-action problems of labor in LDCs and make it increasingly difficult for them to organize" (435).
UPDATE:
"...the demise of the welfare state is expected for two reasons. First, generous welfare benefits are not regarded as good market-disciplining devices on labor. Both the resulting upward pressures on labor costs and the dampening effects on work incentives are claimed to adversely affect export competitiveness. Second, globalization discourages governments from raising revenue. 'Footloose capital,' or the capacity to withdraw and shift both productive and financial capital with greater ease, has made it increasingly difficult for governments to generate revenues through taxation. This 'race to the neoliberal bottom' in tax rates is compounded by governments' lowering taxes to compete with other states for international investors and to prevent capital flight. By the same token, state borrowing, which leads to higher debt and interest rates, also deters investment...With increasing global competition, governments supposedly find it more difficult to protect citizens from market-generated risks and inequalities" (414).
UPDATE: This work is broadly supported by the following study:
Kaufman, RR, and A Segura-Ubiergo. 2001. Globalization, domestic politics, and social spending in Latin America. World Politics 53, no. 4: 553-588.
This article begins by noting that there is quite a lot of literature that deals with the question of how the welfare state is being affected by increased global capital. Much of this literature focuses on more developed countries and concludes that there is not, in fact a problem. This article paints a different picture, and focuses more heavily on developing countries. Rudra attempts to show that developing and developed countries react to capital mobility differently, and that welfare states in developing countries may not be robust enough to fight off the pressures of international capital. "I show that in the face of globalization labor in LDCs has been unable to prevent the dismantling of the welfare state, quite unlike labor in the more developed countries" (411-2).
"In LDCs, low-skilled labor is highly abundant, yet persistent collective-action problems accompanying globalization undermine labor's political clout in LDCs. I assess these two opposing effects by introducing a new indicator of labor power (potential labor power, PLP). My results clearly indicate that the collective-action problems of labor in countries with large pools of low-skilled and surplus workers tend to offset labor's potential political gains from globalization" (413).
The current literature is explored.
The globalization experiences of developed and less developed countries are compared.
The theory is presented.
The data are analyzed. It is a large-n study.
"Does the conventional wisdom that globalization adversely affects welfare spending hold true in LDCs? This investigation of fifty-three LDCs from 1972 to 1995 shows that welfare spending in these countries does indeed respond to greater trade flows and capital mobility. These findings challenge others who do not show that globalization affects welfare spending in developed and developing nations differently. Growing numbers of low-skilled workers relative to skilled workers, coupled with large surplus-labor populations, exacerbate the collective-action problems of labor in LDCs and make it increasingly difficult for them to organize" (435).
UPDATE:
"...the demise of the welfare state is expected for two reasons. First, generous welfare benefits are not regarded as good market-disciplining devices on labor. Both the resulting upward pressures on labor costs and the dampening effects on work incentives are claimed to adversely affect export competitiveness. Second, globalization discourages governments from raising revenue. 'Footloose capital,' or the capacity to withdraw and shift both productive and financial capital with greater ease, has made it increasingly difficult for governments to generate revenues through taxation. This 'race to the neoliberal bottom' in tax rates is compounded by governments' lowering taxes to compete with other states for international investors and to prevent capital flight. By the same token, state borrowing, which leads to higher debt and interest rates, also deters investment...With increasing global competition, governments supposedly find it more difficult to protect citizens from market-generated risks and inequalities" (414).
UPDATE: This work is broadly supported by the following study:
Kaufman, RR, and A Segura-Ubiergo. 2001. Globalization, domestic politics, and social spending in Latin America. World Politics 53, no. 4: 553-588.
Navarro, Schmitt and Astudillo: Is Globalization Undermining the Welfare State?
Navarro, V, J Schmitt, and J Astudillo. 2004. Is globalisation undermining the welfare state? CPES.
"This paper analyses the evolution of the welfare states in the majority of OECD countries during the pre-globalization (1946-80) and globalization (1980-2000) periods. Our purpose is to find out whether globalization has produced a convergence towards a smaller welfare state, funded increasingly by non-mobile factors such as labor, property and consumption rather than by mobile factors such as capital. The data presented here challenge the claims about such a convergence, showing that social public expenditures and public employment have continued to expand during the globalization period in most OECD countries. We also show that the welfare states remain rooted in the political traditions that have governed them" (133).
There has been much debate as to whether or not increased capital mobility would lead to a decreased ability of wealthy countries to provide welfare for their citizens. As the argument goes, when capital mobility is increased, this will cause states to have to adopt policies that are geared towards doing more to attract capital. This means reducing constraints on capital investment and taxation and increasing taxation, etc., on less mobile factors, such as labor. This article examines these claims which it refers to as either the "convergence" claim or the "politics still matter" claim using the most recent data.
"According to the first, 'convergence' hypothesis, we should see during the period of globalization...a convergence of all welfare states towards a reduced level of welfare, funded increasingly by taxes on fixed factors such as labour rather than on mobile factors such as capital. According to the second hypothesis, that 'politics still matter', we should see no such convergence during this period, but rather a continuing divergence of welfare states, each keeping the characteristics of the pre-globalization era...rooted in the distinct political traditions governing those countries for most years in this period" (134).
The vast majority of the article analyses and presents data supporting the case being made. I skimmed this and do not wish to document it.
"The data presented in this paper show that, for the most part, the welfare states of most developed capitalist countries have not converged during the globalization period towards a reduced welfare state. On the contrary, over the globalization period, whether measured as a share of GDP or by public employment, welfare states have grown across the large majority of the worlds' richest economies...The data presented here also challenge another assumption of the 'convergence' theory, which assumes that the globalization process has forced a shift of welfare state funding towards a greater reliance on taxes on fixed factors of production such as labour or consumption and lesser reliance on taxes on mobile factors such as capital. In fact, taxes on capital have increased an taxes on labour, property and consumption have declined in the majority of OECD countries" (151).
"This paper analyses the evolution of the welfare states in the majority of OECD countries during the pre-globalization (1946-80) and globalization (1980-2000) periods. Our purpose is to find out whether globalization has produced a convergence towards a smaller welfare state, funded increasingly by non-mobile factors such as labor, property and consumption rather than by mobile factors such as capital. The data presented here challenge the claims about such a convergence, showing that social public expenditures and public employment have continued to expand during the globalization period in most OECD countries. We also show that the welfare states remain rooted in the political traditions that have governed them" (133).
There has been much debate as to whether or not increased capital mobility would lead to a decreased ability of wealthy countries to provide welfare for their citizens. As the argument goes, when capital mobility is increased, this will cause states to have to adopt policies that are geared towards doing more to attract capital. This means reducing constraints on capital investment and taxation and increasing taxation, etc., on less mobile factors, such as labor. This article examines these claims which it refers to as either the "convergence" claim or the "politics still matter" claim using the most recent data.
"According to the first, 'convergence' hypothesis, we should see during the period of globalization...a convergence of all welfare states towards a reduced level of welfare, funded increasingly by taxes on fixed factors such as labour rather than on mobile factors such as capital. According to the second hypothesis, that 'politics still matter', we should see no such convergence during this period, but rather a continuing divergence of welfare states, each keeping the characteristics of the pre-globalization era...rooted in the distinct political traditions governing those countries for most years in this period" (134).
The vast majority of the article analyses and presents data supporting the case being made. I skimmed this and do not wish to document it.
"The data presented in this paper show that, for the most part, the welfare states of most developed capitalist countries have not converged during the globalization period towards a reduced welfare state. On the contrary, over the globalization period, whether measured as a share of GDP or by public employment, welfare states have grown across the large majority of the worlds' richest economies...The data presented here also challenge another assumption of the 'convergence' theory, which assumes that the globalization process has forced a shift of welfare state funding towards a greater reliance on taxes on fixed factors of production such as labour or consumption and lesser reliance on taxes on mobile factors such as capital. In fact, taxes on capital have increased an taxes on labour, property and consumption have declined in the majority of OECD countries" (151).
Hirst and Thompson: Globalization in Question
Hirst, PQ, and G Thompson. Globalization in question. Polity Press.
Ch. 6: Can the Welfare State Survive Globalization?
"In no area is increased openness to international capital movements and trade seen in more apocalyptic terms than in the case of social welfare" (161).
Many talked about the race to the bottom as being the defining feature of an era of increased capital mobility, with welfare states stripping away rights and privileges that were previously afforded to the downtrodden in their own societies in order to reduce tax burdens and attract capital from foreign investors. This story is too blunt and misses much nuance. The welfare state has not gone asunder, and has arguably been strengthened in many parts of the world by the boon of income provided by increased international trade. The welfare state can act as a mitigating force against the booms and busts of a liberalized global economy. It can also act as a tool for macroeconomic stimulus when needed.
However, while globalization has not marked the end of the welfare state, it has changed the way that it works, and this has happened differently in distinct countries.
Sweden and Denmark are compared in the early 1990s. Sweden has been used as a case for the demise of the welfare state: Swedish welfarism was seen as being a driving force in the country's stagnation throughout the early 90s. However, Denmark represents an opposite case: its country has grown while government expenditures have remained monstrous.
The Netherlands are explored. It is argued that welfare states, once institutionalized, become very difficult to change and become an embedded feature of society.
Italy is explored.
The European Monetary Union is also explored as being a potential damper on the standard European welfare state structure.
Ch. 6: Can the Welfare State Survive Globalization?
"In no area is increased openness to international capital movements and trade seen in more apocalyptic terms than in the case of social welfare" (161).
Many talked about the race to the bottom as being the defining feature of an era of increased capital mobility, with welfare states stripping away rights and privileges that were previously afforded to the downtrodden in their own societies in order to reduce tax burdens and attract capital from foreign investors. This story is too blunt and misses much nuance. The welfare state has not gone asunder, and has arguably been strengthened in many parts of the world by the boon of income provided by increased international trade. The welfare state can act as a mitigating force against the booms and busts of a liberalized global economy. It can also act as a tool for macroeconomic stimulus when needed.
However, while globalization has not marked the end of the welfare state, it has changed the way that it works, and this has happened differently in distinct countries.
Sweden and Denmark are compared in the early 1990s. Sweden has been used as a case for the demise of the welfare state: Swedish welfarism was seen as being a driving force in the country's stagnation throughout the early 90s. However, Denmark represents an opposite case: its country has grown while government expenditures have remained monstrous.
The Netherlands are explored. It is argued that welfare states, once institutionalized, become very difficult to change and become an embedded feature of society.
Italy is explored.
The European Monetary Union is also explored as being a potential damper on the standard European welfare state structure.
Thursday, May 1, 2008
Waltzer: Welfare, Membership and Need
Waltzer, Michael. (1984). "Welfare, Membership and Need". In Michael J. Sandel (Ed.), Liberalism and its critics: Readings in social and political theory (pp. vi, 272 p.). New York: New York University Press.
For Waltzer, the structures of societies are, at least in part, naturally determined. “Men and women come together because they literally cannot live apart” (201). This premises life on social interaction and the proximity of individual humans. This also brings about the fulfillment of a social contract, or a tacitly held agreement by different members of a community that they are part of a unified group.
Once membership is identified, it is possible for a community to begin to identify that the members of a community owe something to one another. “Membership is important because of what the members of a political community owe to one another and to no one else, or to no one else in the same degree” (200). This membership entitles people to receive the benefits determined by the society.
What a person is entitled to receive from society are called “socially recognized needs”. Socially recognized needs, in Waltzer’s construction, are needs that a society begins to understand as being fundamental for living the good life. “The social contract is an agreement to reach decisions together about what goods are necessary to our common life, and then to provide those goods for one another” (200).
However, this agreement is not necessarily straightforward or simple to explain.
Waltzer examines the nature of needs, finds that they are elusive, that people are not clear about what exactly the need, that needs are expansive and not static and that needs can be identified as either particular or general (201-3). This varied, nuanced account of what constitutes a need requires a complex metric for determining how a society arrives at the definition of a socially recognized need.
In evaluating the nature of welfare distribution and need reorganization, Waltzer identifies different features of need satisfaction. Firstly, he claims that coercion is clearly an aspect of need satisfaction in a large group, because, “…some minority of actual people don’t understand, or don’t consistently understand, their real interests” (206). Additionally, our author points out that any need satisfaction is necessarily, “…redistributive in character” (207).
This brings Waltzer back to one of the initial concepts that he used to construct his argument. He expands on his earlier definition by saying that the social contract is, “…an agreement to redistribute the resources of the members in accordance with some shared understanding of their needs, subject to ongoing political determination in detail” (208). Therefore, we have an argument about the nature of the welfare state that depends on the satiation of needs determined by a community that can be amended at any time through the political process.
Waltzer then applies this approach to the US medical system. He highlights that the US does not do an excellent job of fulfilling the recognition of the basic needs of the society. The reasons, for Waltzer, are the following: “…the community of citizens is loosely organized; various ethnic and religious groups run welfare programmes of their own; the ideology of self-reliance and entrepreneurial opportunity is widely accepted; and the movements of the left, particularly the labour movement, are relatively weak” (210). These structural weakness of the US demographics, history and culture has led to their inability to fulfill the basic needs of their citizens.
The argument is the made that medical rights are, in fact, a socially recognized need for Americans. Originally, medical treatment was basically for the wealthy, but this changed over time. Progressively, as the influence of the church abated and the influence of secular organizations increased in prominence, citizens believed that they increasingly had a right to good medical care. “People will not endure what they no longer believe the have to endure” (213).
Additionally, Waltzer makes the case that these needs can not be satisfied by the market alone. “Needed goods are not commodities” (215). The goods that are provided by market forces are different from the goods that are provided by the state. Needed goods are not goods that can be bought and sold, as they are basic for the substance of human life.
The piece ends with Waltzer making the case that the fulfillment of basic medical needs in the US needs to happen because they are a socially recognized right. He then presents an adapted Marxist formulation to highlight the argument made: “From each according to his ability…to each according to his socially recognized need” (217). However, the identification of those needs, members of a community or the proper path to mitigate those needs is not necessarily straight forward: the devil is in the details.
For Waltzer, the structures of societies are, at least in part, naturally determined. “Men and women come together because they literally cannot live apart” (201). This premises life on social interaction and the proximity of individual humans. This also brings about the fulfillment of a social contract, or a tacitly held agreement by different members of a community that they are part of a unified group.
Once membership is identified, it is possible for a community to begin to identify that the members of a community owe something to one another. “Membership is important because of what the members of a political community owe to one another and to no one else, or to no one else in the same degree” (200). This membership entitles people to receive the benefits determined by the society.
What a person is entitled to receive from society are called “socially recognized needs”. Socially recognized needs, in Waltzer’s construction, are needs that a society begins to understand as being fundamental for living the good life. “The social contract is an agreement to reach decisions together about what goods are necessary to our common life, and then to provide those goods for one another” (200).
However, this agreement is not necessarily straightforward or simple to explain.
Waltzer examines the nature of needs, finds that they are elusive, that people are not clear about what exactly the need, that needs are expansive and not static and that needs can be identified as either particular or general (201-3). This varied, nuanced account of what constitutes a need requires a complex metric for determining how a society arrives at the definition of a socially recognized need.
In evaluating the nature of welfare distribution and need reorganization, Waltzer identifies different features of need satisfaction. Firstly, he claims that coercion is clearly an aspect of need satisfaction in a large group, because, “…some minority of actual people don’t understand, or don’t consistently understand, their real interests” (206). Additionally, our author points out that any need satisfaction is necessarily, “…redistributive in character” (207).
This brings Waltzer back to one of the initial concepts that he used to construct his argument. He expands on his earlier definition by saying that the social contract is, “…an agreement to redistribute the resources of the members in accordance with some shared understanding of their needs, subject to ongoing political determination in detail” (208). Therefore, we have an argument about the nature of the welfare state that depends on the satiation of needs determined by a community that can be amended at any time through the political process.
Waltzer then applies this approach to the US medical system. He highlights that the US does not do an excellent job of fulfilling the recognition of the basic needs of the society. The reasons, for Waltzer, are the following: “…the community of citizens is loosely organized; various ethnic and religious groups run welfare programmes of their own; the ideology of self-reliance and entrepreneurial opportunity is widely accepted; and the movements of the left, particularly the labour movement, are relatively weak” (210). These structural weakness of the US demographics, history and culture has led to their inability to fulfill the basic needs of their citizens.
The argument is the made that medical rights are, in fact, a socially recognized need for Americans. Originally, medical treatment was basically for the wealthy, but this changed over time. Progressively, as the influence of the church abated and the influence of secular organizations increased in prominence, citizens believed that they increasingly had a right to good medical care. “People will not endure what they no longer believe the have to endure” (213).
Additionally, Waltzer makes the case that these needs can not be satisfied by the market alone. “Needed goods are not commodities” (215). The goods that are provided by market forces are different from the goods that are provided by the state. Needed goods are not goods that can be bought and sold, as they are basic for the substance of human life.
The piece ends with Waltzer making the case that the fulfillment of basic medical needs in the US needs to happen because they are a socially recognized right. He then presents an adapted Marxist formulation to highlight the argument made: “From each according to his ability…to each according to his socially recognized need” (217). However, the identification of those needs, members of a community or the proper path to mitigate those needs is not necessarily straight forward: the devil is in the details.
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