Globalization, Welfare Reform and the Social Economy: Developing an Alternative Approach to Analyzing Social Welfare Systems in the Post-Industrial Era

By Gonzales, Vanna | Journal of Sociology & Social Welfare, June 2007 | Go to article overview

Globalization, Welfare Reform and the Social Economy: Developing an Alternative Approach to Analyzing Social Welfare Systems in the Post-Industrial Era


Gonzales, Vanna, Journal of Sociology & Social Welfare


Our understanding of the relationship between globalization and contemporary social welfare systems is heavily influenced by three conventional approaches to studying welfare reform: the political economy, moral economy, and mixed economy approaches. In addition to analyzing the strengths and weaknesses of each of these approaches, a central aim of this article is to introduce the social economy approach as an emergent alternative. Drawing from a growing body of work on institutional innovation within the European third sector, I argue that the social economy approach makes a valuable contribution to understanding the role of welfare networks in reconfiguring globalizations' impact on the character and quality of social provision so as to better reconcile social efficacy with social justice.

Keywords: Globalization, Welfare Reform, Welfare Networks, the Third Sector, Social Enterprises, Social Inclusion, Social Justice

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Increasing market integration, changing demographics, and shrinking public budgets have fueled a pervasive redefinition of the state's role in providing for the social welfare of citizens. In addition to challenging public administration's dominance over the production and distribution of social services, policy makers and politicians from across the political spectrum have called into question the once pervasive belief that the state is exclusively entitled to guarantee the collective well being of its citizenry. Together, these developments have produced a climate favorable to the expanding role of the third sector, not only in the delivery of social services, but in the formulation and stipulation of social welfare policy as well. (1)

Despite third sector organizations' increasing centrality in the development of contemporary social welfare systems, the two dominant approaches to studying welfare reform have downplayed, if not ignored, their importance as an interface between globalization and social wellbeing. Locked into a dichotomous state-society framework, the political economy and moral economy approaches have had a polarizing effect on the way we understand globalization and its consequences for welfare. Whereas the former adopts the 'welfare state' as its central analytic unit and focuses on the degree to which globalization is undermining states' capacity to protect their citizens social rights, the latter concentrates on the societal dynamics of the 'welfare society', underscoring the key role of societal actors in responding to societal need and the extent to which the state has become the chief impediment to achieving social justice. As a result of this dualism, the salience of the third sector for transforming the structural and cultural foundation of social welfare systems, and thus its capacity to mediate the effects of globalization, has not been fully appreciated.

The so-called mixed economy approach emerged more recently to underscore the inherent pluralism of social welfare systems and the role of the third sector as a vital intermediary between state, society and economy (Anheier and Seibel, 1990; Gidron, Kramer, Salamon, 1992; Salamon & Anheier, 1996; Salamon, 2002). Stemming primarily from professionals and practioners involved in the implementation and delivery of social and human services, this approach illuminates the black box that separates policy formation from societal outcomes by underscoring the productivist underpinnings of the social welfare systems. Although it has made significant advances in connecting the micro-level institutional dynamics involved in service provision to broader economic and socio-political processes underlying contemporary welfare reform, in focusing somewhat narrowly on the organization and management of welfare production, it fails to explore the broader structural implications of welfare reform and does not take sufficient account of the social consequences that emerging welfare mixes have on both users and citizens more broadly defined. …

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