Global Capital, Political Institutions, and Policy Change in Developed Welfare States

By Duane Swank | Go to book overview

3
Global Capital, Political Institutions, and
Contemporary Welfare State Development:
Quantitative Analysis

In this chapter, I present a quantitative analysis of the central questions of this study. I initially provide a brief overview of the structure and recent development of the contemporary welfare state in advanced capitalist democracies. This exercise, significantly augmented in the country studies of subsequent chapters, brings into concrete relief the changing fortunes of the welfare state across the latter years of welfare expansion and the contemporary era of retrenchment initiatives and restructuring. Subsequently, I discuss my methodological approach to the quantitative analysis of internationalization and social policy change, addressing measurement issues, econometric model development, and statistical estimation techniques. In the main body of the chapter, I present assessments of the direct welfare state effects of international capital mobility, the impacts of internationalization on the dynamics of welfare state convergence and divergence, and the contingent and conjunctural policy effects of capital mobility (following the supplementary hypotheses outlined in the preceding chapter).

I also provide a series of analyses of the ways in which national institutions shape the domestic policy consequences of internationalization. I evaluate my arguments about the foundational role of democratic institutions by examining how capital mobility affects total social welfare effort in different institutional contexts across the entire sample of years and countries (i.e., 1965–93 in 15 developed democracies). To deepen the analysis, I then analyze the direct welfare state impacts of international capital mobility on three key dimensions of social welfare protection – income maintenance, the social wage, and government provision of health care – for the entire sample and within three clusters of welfare states defined by programmatic attributes (and, indirectly, by political

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