Introduction

What, if anything, is the relationship between globalisation as a process and the welfare state as a set of institutions and political relationships? Does globalisation imply an end to the welfare state and its use as an instrument of social policy? Or is globalisation perfectly compatible with stable or expanded welfare spending? Are the major threats to the welfare state domestic, rather than global, in nature, like the ageing of society? Are the politics and substance of welfare state reorganisation in rich countries uniform?

Although the cottage industry devoted to answering these questions has grown into an impressive, almost industrial edifice, many of the products are marred by poor conceptualisation. Conceptual confusions abound in the equation linking globalisation to welfare. This no doubt explains the variety of causal effects on the welfare state attributed to globalisation, and the desire of many analysts to (unnecessarily) oppose ‘domestic’ and ‘global’ causes for welfare state change. After all, not everyone sees globalisation as ineluctably compromising the welfare state. Some analysts believe globalisation will provoke political cries for more welfare while others see welfare not only as a necessary political price to be paid for more globalisation, but one which is perfectly compatible with continued globalisation. Furthermore, this latter argument is deployed not only by Washington DC based apologists for free trade like Dani Rodrik (1997), but also is explicit in the debate David Cameron (1979) started about the political exchange of welfare for trade exposure in corporatist welfare states.

This chapter addresses some of the usual arguments and confusions about globalisation and the welfare state by focusing on three issues. First, I will make the case for looking broadly at social protection, rather than narrowly at state tax, transfer and service organisations. Second, I will show how the use of a broader conception of social protection allows us to make a better causal argument about the connection between ‘domestic’ and ‘non-domestic’ causes of changes in the supply of and demand for welfare services or transfers, and changes in the role of women in the economy. Finally, I will suggest that globalisation has definitely transformed the post-war welfare state. After all, much of the economy is now exposed to market pressures, and the sizeable portion of the female population that formerly was excluded from labour markets now finds itself working for wages.