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

Nita Rudra
2002 International Organization  
Is the welfare state withering away, or will it survive current globalization trends? 1 Recent literature framing this academic debate has extolled the resilience of this institution, despite the pressures of international market integration. 2 These studies have reversed doomsday scenarios from the 1980s and 1990s that contemplated the ultimate demise of the welfare state. 3 Yet trends in welfare spending in developed and developing countries have diverged. During the past quarter century,
more » ... alization penetrated both groups. However, while the more developed countries were expanding resources devoted to this form of safety net, the average share of gross domestic product (GDP) allocated in a sample of fifty-three less-developed countries (LDCs) began much lower and fell lower still (see Figure 1 ). My analysis goes beyond existing studies by providing an original model of the determinants of welfare spending in LDCs. 4 I focus on how globalization can affect rich and poor countries differently and present a model that includes a new measure of labor strength. I show that in the face of globalization labor in LDCs has been unable to For help with various aspects of this article, I am grateful to the editors and anonymous reviewers at IO. I am especially indebted to Hayward Alker and John Odell for their detailed and extremely helpful comments. I would also like to gratefully acknowledge the assistance of the Center for International Studies at the University of Southern California. 1. Economic globalization is operationalized by the level of international trade and the level of capital flows as a share of GDP.
doi:10.1162/002081802320005522 fatcat:j63cf2zerbgvlojjiv64babsrq