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ID: 102570

Conditional contraction: globalisation and capitalist systems / Jensen, Carsten

Jensen, Carsten	Journal Article
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Publication

2011.

Summary/Abstract

The effect of globalisation on social spending is one of the most intensely studied issues in the political economy literature. Until recently, conventional wisdom held that globalisation leads governments to expand social spending to compensate workers for increasing risk exposure. The latest research shows, however, that globalisation has become strongly associated with spending cutbacks since the late 1980s. This article adds to this research by arguing that the negative impact of globalisation is conditioned on the capitalist system in different countries. In coordinated market economies (CMEs), employers are dependent on the willingness of the workforce to invest in specific skills and therefore become supportive of extensive social spending. Not so in liberal market economies (LMEs), where employers are much less dependent on social spending because the workforce in general invests less in specific skills. Employers in LMEs are therefore likely to use increasing globalisation as a means to push through retrenchment, whereas employers in CMEs are not. This argument is tested in a time-series cross-section regression analysis, which clearly supports it.

Key Words

Globalisation ; Liberal Market Economies ; Conditional Contraction ; Capitalist Systems

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ID: 094978

Issue compensation and right - wing government social spending / Jensen, Carsten

Jensen, Carsten	Journal Article
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Publication

2010.

Summary/Abstract

It is well-established that prolonged left-wing incumbency has a positive long-term effect on welfare effort in terms of high levels of social spending and reduced levels of economic inequality and poverty. Prolonged left-wing incumbency also influences the institutional set-up of welfare states, in particular generating strong support for existing arrangements in countries with large welfare states. The issue ownership literature furthermore shows that the public comes to distrust right-wing parties as defenders of the welfare state. In countries that have a tradition of left-wing incumbency it is particularly important for right-wing governments to compensate for the distrust of the public because of the popularity of the welfare state and strong vested interests. While right-wing governments on average are negatively associated with social spending, there is a strong positive association between right-wing government and social spending in traditionally left-wing countries. It is even the case that right-wing governments in these countries spend more on social welfare than left-wing governments. This indicates that right-wing governments are forced to compensate for the lack of public trust by being even more generous than the left.

Key Words

Social Spending ; Right Wing

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