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Globalisation and Social Spending

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Author Info
Paul De Grauwe ()
Magdalena Polan ()
Abstract

We provide evidence indicating that countries with well-developed social security systems do not necessarily face a trade-off between social spending and competitiveness. On average, countries that spend a lot on social needs score well in the competitiveness league. We investigate the importance of a reverse causality from competitiveness to social spending, and find that this is weak. We also present some possible explanations for our empirical finding. Finally, we interpret our findings in the framework of a theoretical model in which risk affects the size of the social sector and in which social spending affects the production function of the private sector.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 885.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_885

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Related research
Keywords: economic integration; globalisation; terms-of-trade variability; international trade;

Find related papers by JEL classification:
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
F10 - International Economics - - Trade - - - General
F15 - International Economics - - Trade - - - Economic Integration

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Federico Bonaglia & Jorge Braga de Macedo & Maurizio Bussolo, 2001. "How Globalisation Improves Governance," OECD Development Centre Working Papers 181, OECD, Development Centre. [Downloadable!]
    Other versions:
  2. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hassan Molana & Catia Montagna, 2005. "Aggregate Scale Economies, Market Integration and Optimal Welfare State Policy," International Trade 0509006, EconWPA. [Downloadable!]
    Other versions:
  2. Dumont M., 2006. "The Social Consequences of Economic Globalization," Working Papers 2006025, University of Antwerp, Faculty of Applied Economics. [Downloadable!]
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