By Duane Swank
This booklet argues that the dramatic post-1970 upward thrust in overseas capital mobility has no longer systematically contributed to the retrenchment of constructed welfare states as many declare. Nor has globalization without delay diminished the revenue-raising capacities of governments and undercut the political associations that aid the welfare country. fairly, institutional positive factors of the polity and the welfare nation confirm the level to which the industrial and political pressures linked to globalization produce Welfare kingdom retrenchment.
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Extra info for Global Capital, Political Institutions, and Policy Change in Developed Welfare States
As to general critiques, numerous questions about the actual extent of capital mobility and international financial integration have been raised. First, historical analyses of interest rate–based measures of market integration (Zevin, 1992) and net capital stock transfers across countries (Epstein and Gintis, 1992) illustrate that the level of international financial integration during the 1870–1914 “gold standard” era was probably greater than integration in the 1980s and 1990s (also see Thompson ; Hirst and Thompson ).
Empirically, Garrett and Mitchell (forthcoming) have presented evidence that trade openness, trade volatility, and international financial integration have not substantially reduced income maintenance in the developed democracies. Similar findings have been presented by Rodrik, both for developing countries and the advanced democracies. Unlike Garrett and Mitchell, however, Rodrik’s analysis suggests that rises in capital mobility (combined with high trade openness) collectively undercut the ability of governments to finance social compensation and otherwise maintain the joint efficiency and equity gains often associated with embedded liberalism (also see Pauly ; Ruggie ).
Political institutions also influence directly and indirectly the relative political strength (weakness) of traditional welfare state constituencies, as well the relative strength (weakness) of supporting and opposing coalitions of social groups and classes. Specifically, institutions affect the relative political capacities of pro–welfare state interests. By political capacities, I mean the size and unity of programmatic alliances, collective actors, and political coalitions; the ability of these interests to pursue coherent national strategies of establishment and maintenance of social protection; and the conventional political resources of collective actors – organization, funding, and access.
Global Capital, Political Institutions, and Policy Change in Developed Welfare States by Duane Swank