Economic Policy and Social Policy: Policy‐linkages in an Era of Globalisation

Abstract

This article argues that changes in the role of the state in economic affairs will affect the process of social policy. Growing economic integration caused by globalisation now places a greater constraint upon the discretion of the nation state, bringing about a transformation into a more competitive state. States are increasingly having to compete against each other in order to promote competitiveness and attract foreign direct investment (FDI) from international capital markets. This competition influences in turn the social policy formation requiring the redesigning of social policy. Thus, welfare states may need to reform their social policy towards a “business‐friendly social policy”. The analysis of social policy inputs and outputs presented here suggests that there are common trends in most welfare states towards: a market‐conforming policy on business taxation, a reduction of the share of employer's contributions in social protection revenues, more limited income security programmes, an increased allocation of resources for active labour market programmes and less state intervention in the labour market. All these reforming trends in social policy can be understood as a response of welfare states to the evolving needs of business caused by structural change, notably globalisation.

Financial Crisis and Social Security: The Paradox of the Republic of Korea

“…It is thus notable that the economic crisis of 1997 brought about a change in the value orientations of Koreans regarding the provision of social welfare. In order to examine this change, I shall draw heavily on the surveys carried out by Shin andRose in May 1997 andOctober 1998. 5 According to these surveys, in 1997, before the financial crisis, more than half of the respondents supported the notion that individuals should be responsible for their own welfare, as we can see in Table 8.…”

Anti-immigration attitudes in different welfare states: Do types of labor market policies matter?

“…To be more specific, we focus on active labor market policies (ALMPs), which complement job losses through improving the employability of the unemployed rather than providing monetary support. We examine these policies, as they have become a significant policy option for welfare states since the early 1990s (Clasen and Clegg, 2006;Powell and Barrientos, 2004;Shin, 2000;Walters, 1997). The activation of labor market policies is important in forming anti-immigration attitudes because the different policy designs of active and passive policies have different normative implications, which relate to the 'deservingness' of welfare recipients and thereby possibly affect anti-immigration attitudes.…”

Tying Up the Loose Ends: The Determinants of Active Labour Market Policy in the Western Countries 1985-2013

“…In terms of social policy, globalisation means a shift towards market-led services and income redistribution. This results in the responsibility for the actualisation of social risks shifting from the public sector towards the individual level, leading to a reduction in societal obligations, including the resources to fulfil such obligations (Shin, 2000). In addition to the above, Krugman (1999) writes about the indirect impact mechanisms of globalisation.…”