Economic globalization, the macro economy, and reversals of welfare: Expansion in affluent democracies, 1978-94

Alexander Hicks, Christopher Jon Zorn

Research output: Contribution to journalReview article

42 Citations (Scopus)

Abstract

A key question in debates over globalization is its effect on the welfare states in particular on welfare "retrenchments": programmatic retractions of the scope and coverage of social programs. We conceptualize such retrenchments as discrete policy events; and we offer a comprehensive model of their occurrence that integrates domestic economic, political, and institutional factors as well as those related to the global economy. Our analysis of all such retrenchments in Organization for Economic Cooperation and Development (OECD) nations between 1978 and 1994 indicates that the effects of globalization are complex, with trade openness and financial liberalization clearly operating against such retrenchments but outward foreign direct investment perhaps pressuring for them. In addition, we uncover support for a dynamic of "self-limiting immoderation": economic and demographic pressures for costly welfare expenditures provoke actions to roll back eligibility and benefit rates that link increasing numbers of unemployed and retired persons to increased social spending. In short, the same demographic pressures that gave often been noted to substantially drive welfare spending may trigger welfare cutbacks.

Original languageEnglish (US)
Pages (from-to)631-662
Number of pages32
JournalInternational Organization
Volume59
Issue number3
DOIs
StatePublished - Jun 1 2005

Fingerprint

welfare
globalization
democracy
economy
economics
institutional factors
political factors
direct investment
economic factors
foreign investment
OECD
welfare state
liberalization
expenditures
coverage
human being
Reversal
Democracy
Economic globalization
Macroeconomy

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Political Science and International Relations
  • Organizational Behavior and Human Resource Management
  • Law

Cite this

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abstract = "A key question in debates over globalization is its effect on the welfare states in particular on welfare {"}retrenchments{"}: programmatic retractions of the scope and coverage of social programs. We conceptualize such retrenchments as discrete policy events; and we offer a comprehensive model of their occurrence that integrates domestic economic, political, and institutional factors as well as those related to the global economy. Our analysis of all such retrenchments in Organization for Economic Cooperation and Development (OECD) nations between 1978 and 1994 indicates that the effects of globalization are complex, with trade openness and financial liberalization clearly operating against such retrenchments but outward foreign direct investment perhaps pressuring for them. In addition, we uncover support for a dynamic of {"}self-limiting immoderation{"}: economic and demographic pressures for costly welfare expenditures provoke actions to roll back eligibility and benefit rates that link increasing numbers of unemployed and retired persons to increased social spending. In short, the same demographic pressures that gave often been noted to substantially drive welfare spending may trigger welfare cutbacks.",
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Economic globalization, the macro economy, and reversals of welfare : Expansion in affluent democracies, 1978-94. / Hicks, Alexander; Zorn, Christopher Jon.

In: International Organization, Vol. 59, No. 3, 01.06.2005, p. 631-662.

Research output: Contribution to journalReview article

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