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Globalization and the Decline of the Welfare State in Less-Developed Countries

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  • Rudra, Nita
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    Abstract

    Is the welfare state withering away, or will it survive currentglobalization trends? Recent literature framing this academic debatehas extolled the resilience of this institution, despite the pressuresof international market integration. These studies have reverseddoomsday scenarios from the 1980s and 1990s that contemplated theultimate demise of the welfare state. Yet trends in welfare spending indeveloped and developing countries have diverged. During the pastquarter century, globalization penetrated both groups. However, whilethe more developed countries were expanding resources devoted to thisform of safety net, the average share of gross domestic product (GDP)allocated in a sample of fty-three less-developed countries (LDCs)began much lower and fell lower still (see Figure 1). My analysis goesbeyond existing studies by providing an original model of thedeterminants of welfare spending in LDCs. I focus on how globalizationcan affect rich and poor countries differently and present a model thatincludes a new measure of labor strength.

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    Bibliographic Info

    Article provided by Cambridge University Press in its journal International Organization.

    Volume (Year): 56 (2002)
    Issue (Month): 02 (March)
    Pages: 411-445

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    Handle: RePEc:cup:intorg:v:56:y:2002:i:02:p:411-445_44

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    Cited by:
    1. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.
    2. repec:cge:warwcg:82 is not listed on IDEAS
    3. Jonathan Perraton, 2004. "Joseph Stiglitz's, Globalization and its Discontents," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(6), pages 897-905.
    4. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.
    5. Thushyanthan Baskaran & Zohal Hessami, 2010. "Globalization, Redistribution, and the Composition of Public Education Expenditures," CESifo Working Paper Series 2917, CESifo Group Munich.
    6. Welander, Anna & Lyttkens, Carl Hampus & Nilsson, Therese, 2014. "Globalization and Child Health in Developing Countries: The Role of Democracy," Working Papers 2014:11, Lund University, Department of Economics.
    7. Wibbels, Erik, 2006. "Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World," International Organization, Cambridge University Press, vol. 60(02), pages 433-468, April.
    8. Benarroch, Michael & Pandey, Manish, 2012. "The relationship between trade openness and government size: Does disaggregating government expenditure matter?," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 239-252.
    9. Arjan de Haan, 2013. "The Social Policies of Emerging Economies: Growth and Welfare in China and India," Working Papers 110, International Policy Centre for Inclusive Growth.
    10. Jose Miguel Albala-Bertrand, 2006. "The Unlikeliness of an Economic Catastrophe: Localization & Globalization," Working Papers 576, Queen Mary, University of London, School of Economics and Finance.
    11. Troeger, Vera & Plumper, Thomas, 2012. "Tax Competition and Income Inequality: Why did the Welfare State Survive?," CAGE Online Working Paper Series 83, Competitive Advantage in the Global Economy (CAGE).
    12. MacLean, Lauren M., 2011. "The Paradox of State Retrenchment in Sub-Saharan Africa: The Micro-Level Experience of Public Social Service Provision," World Development, Elsevier, vol. 39(7), pages 1155-1165, July.

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