Working Papers

The Nation-State, Social Policy, and Economic Performance

Among the basic questions about the impact of “globalization” on public policy three are of great interest to both scholars and policymakers:

  1. Is the nation-state eroding as a unit of social science analysis and as the center of political action?
  2. Do capital and labor flows across national boundaries threaten the social policies of the rich democracies – – especially job protection and good earnings and welfare-state benefits?

Because these questions assume that globalization gives countries with low labor costs and lean social policies a competitive advantage over their rivals, we must give an estimate regarding a third question:

  1. Leaving aside the net contribution of the welfare state to such values as dignity, security, equality, family well-being, social integration, and political legitimacy, what are the net effects of social policies and the welfare-state on productivity and economic performance?

In my exploration of these issues I shall use data and arguments from my study of the political economy and performance of 19 rich democracies (the universe of advanced industrial democracies with a population of at least one “k million).