Globalization and the welfare state

Globalization and the welfare state
Gu¨lsu¨n Gu¨rkan Yay1
• Tolga Aksoy1
Published online: 31 March 2017
Springer Science+Business Media Dordrecht 2017
Abstract This paper analyzes the impact of globalization on the Welfare State (WS). Some
argue that globalization poses a serious threat to WS and therefore questions its sustainability.
On the other hand, some others suggest that WS has to expand more as economies
are integrating. After reviewing different hypothesis on the relationship between globalization
and WS, we empirically examine the relationship by using 32 countries covering
1980 through 2010. According to the estimation results, there is no direct linkage between
globalization and the WS. However the reaction of the WS against globalization is found to
vary dramatically depending on welfare regimes. We find evidence in favor of compensation
hypothesis in Social Democrat, Conservative and Mediterranean Welfare State
regimes, whereas efficiency effect is in place in liberal Welfare States.
Keywords Globalization Welfare state Social security expenditures
KOF index
JEL Classification F6 H5
1 Introduction
The purpose of this paper is to empirically investigate the relationship between globalization
and the Welfare State (WS). While WS is a concept to define developed capitalist
countries especially after the World War II, globalization represents a new order; transformation
of the capitalism since 1980s. The inability of liberal capitalism to eliminate
& Gu¨lsu¨n Gu¨rkan Yay
[email protected]
Tolga Aksoy
[email protected]
1 Department of Economics, Yıldız Technical University, Davutpasa Campus, Esenler,
34220 Istanbul, Turkey
Qual Quant (2018) 52:1015–1040
business cycles/financial crises and solving income inequality and social injustice problems
led capitalism to enter a different phase after the World War II. The key features of this
model which is called as Interventionist Capitalism1 are the followings:
(1) Keynesian monetary, fiscal and protective foreign trade policies to prevent
economic crises and fluctuations.
(2) Fordist industrialization policy where states take an active role.
(3) WS which takes on a task that it provides economic and social well-being for their
These three elements complement and interact with each other. The new model aimed
both mass production-mass consumption and accommodation between capital and labor so
that it achieves economic as well as social stability. In the beginning, WS was considered
to be a state model which assures a basic standard of income (job), nutrition, health,
housing and education to every citizen. WS, with this definition, includes the aspect of
universal social rights secured by the state and becomes only welfare provider (Holm
2010). The manifestation of the British Labor Party in 1945 election was a good reflection:
‘‘jobs for all’’ and ‘‘social insurance against the rainy day’’ (Korpi 2003). The scope of the
WS has expanded significantly through time. It has included extensive social security
rights, regulations in labor market and new worker rights. However, during the period of
expansion, WS has also been transformed into many different welfare states (and many
different varities of capitalism) in terms of the scope, purpose and generosity.
Various internal problems of the WS emerged from the mid-1970s. These problems
were primarily direct internal problems such as changes in demographic and social
structure, labor market rigidities, funding the WS/budget discipline and low economic
growth. Secondarily, there were indirect internal threats such as oil-related stagflation
arising from the world economic conditions and changes in business structure caused by
newly developed technologies. In addition to the internal problems, the WS has also been
exposed to increasing external threats since the 1980s, as a consequence of international
trade and competition that began to develop in the 1960–70s. The starting point of globalization
is the technological developments. Revolutionary innovations in communication
and transportation technologies led faster and cheaper way of communication and transportation.
The economic consequences of information/communication revolution brought
about more crucial changes. Concerning economic dimension, globalization means competitiveness
pressures in international goods and services markets, the multinationalization
of production regimes and the capital mobility thanks to the integration of financial
markets (Garrett 1998). In addition to these, a long-term indicator of globalization is the
expected convergence in wages and prices. Globalization has not remained static/unchanged.
In fact, economic globalization has been divided into different phases over time.
While trade and competitiveness across countries were dominant in the 1980s, in the 1990s
integration of capital, vertical specialization, slicing up the value-added chain, outsourcing
and offshoring came into prominence. These developments followed by the spread of
global competition into factories and offices (Baldwin 2006).
1 ‘‘Interventionist Capitalism’’ refers to the period of capitalism between 1950 and 1973, shaped by
changing world conditions after World War II and supported by Keynesian ideas, which Angus Maddison
(1982) describes as the ‘‘Golden Age’’. The definition amounts to the capitalism period of which WS
constituted an important lower segment. This period (described as ‘‘etatism, ‘‘embedded liberalism’’ by
some or ‘‘Affluent Society’’ by Kenneth Galbraith (Galbraith 1985) witnessed state-industrial sector solidarity
and heavy government interventions into the economy. However, the scope of the WS in this period
significantly differed across developed and developing economies (Porket 1998).
1016 G. G. Yay, T. Aksoy
However, globalization is political and socio-cultural phenomenon as well as it includes
economic and technological characteristics. Political and cultural globalizations are also
expected to take place in the long-term. According to the former, democratization and rule
of law will spread and the importance of nation-state will diminish. Regarding the latter,
lifestyles, consumption habits in different countries will resemble to each other through
time, but regional differences will still remain (Yay 2009).
Many studies argue that globalization poses a serious threat to WS by questioning its
sustainability.2 Thus, it is proposed that the transformed capitalist system will contradict
with the current structure of the WS, and eventually will alter it. Despite this claim, some
other studies find either neutral or positive effects of globalization on WS. Hence, although
there is sizeable number of studies on the globalization-WS nexus, there has not been
consensus in the literature. The contradicting results possibly arise from narrow measures
of globalization and very diverse measures of WS in addition to the different time and
country coverage. For this reason, we aim to examine globalization and the WS relationship
in a cross-country panel data context by focusing on all facets of globalization and
a better measure of the WS.
More specifically, in this paper we employ data compiled by Comparative Political Data
Set (CPDS) on social security transfers over GDP and the KOF indices of globalization.
The indices consist of overall, economic, political and social variables hence they measure
multifaceted nature of globalization. According to the estimation results, globalization is
not significantly associated with the WS. However, the baseline results mask considerable
heterogeneity related to a country’s own institutional structure. In particular, we find that
economic globalization spurs WS in Social Democrat, Conservative and Mediterranean
countries. However, it has statistically significant negative effect on the WS in Liberal
This paper is organized as follows. In Sect. 2, we discuss the hypotheses on the effects
of globalization on the WS. In Sect. 3, we describe the data and test the hypotheses
empirically. Section 4 concludes.
2 Globalization and the welfare state: related hypotheses

Get Professional Assignment Help Cheaply

Buy Custom Essay

Don't use plagiarized sources. Get Your Custom Essay on
Globalization and the welfare state
Just from $9/Page
Order Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment Help Service Works

1. Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2. Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3. Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4. Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essay GET A PERFECT SCORE!!! smile and order essay Buy Custom Essay

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!
Open chat
Need assignment help? You can contact our live agent via WhatsApp using +1 718 717 2861

Feel free to ask questions, clarifications, or discounts available when placing an order.
  +1 718 717 2861           + 44 161 818 7126           [email protected]
  +1 718 717 2861         [email protected]