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

  • Rudra, Nita
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    Why have trends in government welfare spending in developing countries diverged from those in developed countries? I address this question by investigating the effects of capital and trade flows on government welfare spending in fifty-three developing countries. Using an original measure of labor power in developing countries, I test the links between international markets, labor's political strength, and the welfare state. I argue that labor's collective-action problems, caused by large populations of low-skilled and surplus workers, offset labor's potential political gains from globalization. I show that when the proportion of low-skilled workers in a nation is high, globalization will lead to a decline in welfare spending. Most significantly, the results suggest that in nations where labor-market institutions are not yet well developed, government social-welfare spending is constrained by international market, forces.

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    File URL: http://journals.cambridge.org/abstract_S0020818302441756
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    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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