We examine the roles of democratic politics and political institutions in shaping social welfare spending in 18 contemporary capitalist democracies. We explore the social spending consequences of government partisanship, electoral competition and turnout, and the self-interested behaviors of politicians and bureaucrats, as well as such relatively durable facets of political institutions as neocorporatism, state centralization, and traditionalist policy legacies. Pooled time series analyses of welfare effort in 18 nations during the 1960–82 period show that electoral turnout, as well as left and center governments increase welfare effort; that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional (and junior coalitional) parties; and that relatively neocorporatist, centralized, and traditionalistic polities are high on welfare effort. Overall, our findings suggest that contrary to many claims, both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort.

This book argues that the post-1970 rise in international capital mobility has not contributed to the retrenchment of developed welfare states. Nor has globalization reduced the revenue-raising capacities of governments and undercut the political institutions that support the welfare state. Rather, institutional features of the polity and the welfare state determine the extent to which the economic and political pressures associated with globalization produce welfare state retrenchment. In systems characterized by electoral institutions, social corporatist interest representation and policy-making, centralized political authority, and social insurance-based program structures, pro-welfare state interests are favored. In nations characterized by majoritarian electoral institutions, pluralist interest representation and policy-making, decentralization of policy-making authority, and liberal program structure, the economic and political pressures attendant on globalization are translated into rollbacks of social protection. Globalization has had least impact on large welfare states of Northern Europe and most effect on small welfare states of Anglo nations.

We outline and test the argument that globalization contributes to the electoral success of the new far right in Western Europe. We also draw on the theory of embedded liberalism to advance and test the hypothesis that a comprehensive, generous and employment-orientated system of social protection lessens the economic insecurities attendant to internationalization and, in turn, weakens support for far-right parties. In empirical analysis of national elections in 16 European polities from 1981 to 1998, we find that the universal welfare state directly depresses the vote for radical right-wing populist parties and conditions the linkages between capital mobility, trade openness and foreign immigration on the one hand and electoral support for the new far right on the other. In conclusion, we consider our findings' implications for understanding the domestic political effects of globalization and sources of right-wing populism as well as for policy reforms that promote political economic stability in an era of international integration.

We articulate and test an explanation for the remarkable change and continuity in contemporary tax policy in capitalist democracies. We argue that internationalization, domestic eco- T he globalization theory of taxation suggests that the ability of mo bile asset holders to exit national jurisdictions forces policy makers to compete for investment (Tanzi 1995). In the strongest versions of the theory, taxes on capital and other mobile asset holders such as professionals are progressively reduced to the "lowest common denominator." Tax burdens on relatively immobile factors and activities (i.e., most labor and consumption) are increased (Christiansen, Hagen, and Sandmo 1994). Yet, the empirical record of tax policy change does not fit the globalization thesis; although statutory tax rates, brackets, and investment incentives have been reduced almost everywhere, we find a remarkable stability in the levels and distribution of tax burdens.Here, we argue that the tax impacts of internationalization are important, but in more complex ways than globalization theory suggests. Specifically, through analysis of data from fourteen developed democracies for 1981 to 1995, we show that rises in capital mobility and trade have systematically preceded cuts in statutory tax rates. We also demonstrate, however, that three factors-internationalization, domestic economic change, and budgetary forces-simultaneously constrain changes in tax burdens and, together, help explain the complexity of tax policy outcomes.

Theorists assert that international capital mobility creates substantial pressure for all democratically elected governments to decrease tax burdens on business. I explicate and critique the general version of this theory and oer an alternative view. Empirically, I explore whether or not the globalization of capital markets has resulted in decreases in business social security, payroll, and pro®t taxes. I also investigate whether or not capital mobility has intensi®ed government responsiveness to domestic investment and pro®tability. Evidence suggests that business tax burdens have not been reduced in the face of rises in capital mobility nor is tax responsiveness to pro®tability and domestic investment intensi®ed by more open capital markets. To the contrary, analyses indicate that business taxation has become subject to neẁ market conforming' policy rules that developed in tandem with liberalization of markets. These new policy orientations reduce the economic management roles of business taxation while leaving the revenue-generating roles intact. In conclusion, I discuss the implications of the ®ndings for questions concerning the structural power of internationally mobile capital, redistributive policies, and the autonomy of democratically elected governments in a global economy.It has become commonplace to suggest that contemporary governments in the advanced capitalist democracies have converged around a neoliberal approach to economic management. The neoliberal pattern also appears to hold for tax policies: most governments have reduced marginal personal and corporate income tax rates and have generally reduced the redistributive roles of taxes. A widely oered explanation for these changes is the dramatic increase in the international mobility of capital. Numerous surveys of tax policy change and # Political Studies Association 1998. Published by Blackwell Publishers,