Globalization and the Race to the Bottom in Developing Countries: Who Really Gets Hurt?

by Nita Rudra

• ISBN13: 9780521715034
• ISBN10: 0521715032
• Edition: 1st
• Format: Paperback
• Copyright: 2008-10-13
• Publisher: Cambridge University Press

Summary

The advance of economic globalization has led many academics, policy-makers, and activists to warn that it leads to a 'race to the bottom'. In a world increasingly free of restrictions on trade and capital flows, developing nations that cut public services are risking detrimental effects to the populace. Conventional wisdom suggests that it is the poorer members of these societies who stand to lose the most from these pressures on welfare protections, but this new study argues for a more complex conceptualization of the subject. Nita Rudra demonstrates how and why domestic institutions in developing nations have historically ignored the social needs of the poor; globalization neither takes away nor advances what never existed in the first place. It has been the lower- and upper-middle classes who have benefited the most from welfare systems and, consequently, it is they who are most vulnerable to globalization's race to the bottom.

Author Biography

Nita Rudra is an Assistant Professor of International Affairs in the Graduate School of Public and International Affairs at the University of Pittsburgh

Table of Contents

List of figures	p. xi
List of tables	p. xiii
Preface	p. xv
Introduction	p. 1
Globalization and the race to the bottom debate: the fundamental concern	p. 5
The focus and plan of the book	p. 11
Contributions	p. 17
The race to the bottom in developing countries	p. 19
Existing literature on the globalization-welfare state nexus	p. 20
Globalization, labor and the race to the bottom in developing countries	p. 24
The evidence	p. 26
Contrasting trends in globalization and welfare: rich versus poor nations	p. 26
LDC labor in a globalizing economy	p. 30
Model specification	p. 35
The variables	p. 36
Results	p. 39
Summary	p. 46
Who really gets hurt?	p. 48
Importance of the distributive effects of social spending in developing nations	p. 51
Links between globalization, welfare spending, and inequality in OECD countries	p. 52
The link between globalization, welfare spending, and inequality in LDCs	p. 54
The base model: the effects of globalization and social spending on income distribution	p. 56
The dependent variable: income distribution	p. 57
Independent variables	p. 59
Results	p. 61
Globalization and prospects for equity-enhancing reform	p. 65
Robustness checks	p. 67
Interpretation of results: the role of government-labor relations, information, and interests	p. 68
Summary	p. 73
LDC welfare states: convergence? What are the implications?	p. 75
Welfare states in developing countries? The existing literature	p. 77
Contemplating systematic divergence in LDCs: patterns of welfare regimes	p. 80
Questioning CPE convergence: why LDCs are likely to have welfare states	p. 80
Questioning IPE convergence: twentieth-century globalization and different LDC welfare regimes	p. 82
Delineating different welfare regimes in developing countries	p. 84
Cluster analysis: testing contrasting hypotheses	p. 89
Analysis results	p. 95
Robustness checks	p. 102
Initial interpretation of the results	p. 103
Implications	p. 106
Globalization and the protective welfare state: case study of India	p. 108
India's protective welfare state	p. 111
Race to the bottom?	p. 114
Social security	p. 116
Health care and education	p. 118
Summary	p. 119
Institutional change	p. 120
Welfare regime change?	p. 120
Mediating role of domestic institutions	p. 124
Who really gets hurt?	p. 130
Social security	p. 131
Health care	p. 133
Education	p. 134
Summary	p. 137
Other factors: democracy, ethnic fragmentation, and culture	p. 138
Implications	p. 140
Globalization and the productive welfare state: case study of South Korea	p. 142
South Korea's productive welfare state	p. 143
Race to the bottom	p. 149
Social security	p. 150
Labor market protections	p. 153
Summary	p. 155
Institutional change	p. 155
Welfare regime change?	p. 156
Mediating role of domestic institutions	p. 159
Who really gets hurt?	p. 165
Labor market protections	p. 166
Social security (and social assistance)	p. 167
Health care	p. 169
Education	p. 170
Summary	p. 174
Other factors: democracy, civil society groups, and Japanese influences	p. 174
Implications	p. 175
Globalization and the dual welfare state: case study of Brazil	p. 177
Brazil's weak dual welfare state	p. 178
Decommodification policies	p. 180
Commodification policies	p. 183
Race to the bottom	p. 185
Social security	p. 185
Labor market protections	p. 188
Health care	p. 189
Education	p. 190
Summary	p. 191
Institutional change	p. 191
Welfare regime change?	p. 192
Mediating role of domestic institutions	p. 198
Who really gets hurt?	p. 204
Social security and labor market protections (and social assistance)	p. 204
Health care	p. 206
Education	p. 208
Summary	p. 209
Other factors: democracy and partisanship	p. 209
Implications	p. 210
Conclusions	p. 212
The case studies in perspective: globalization, domestic institutions, and social policies	p. 213
Questioning prevailing assumptions and future research	p. 218
Rethinking the trade-off between states and markets in developing economies	p. 218
Rethinking the political economies of developing countries	p. 219
Rethinking the capital-labor dichotomy	p. 221
Broader questions for future research	p. 222
Prospects for the future?	p. 222
LDC social spending	p. 224
Assessing potential labor power	p. 229
Additional tests for the RTB hypothesis	p. 234
Variables in the inequality model	p. 238
Technical notes on Gini coefficients	p. 239
LDC Gini coefficient statistics	p. 240
Robustness check	p. 242
Conditional impact of trade on inequality	p. 244
Descriptions and sources of variables	p. 246
Cluster results minus outcome variables	p. 247
Dendrogram for cluster analysis	p. 248
Poverty tables	p. 249
Social expenditures on social security, health, and education in India (percent of GDP) based on national data	p. 253
References	p. 255
Index	p. 286
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