Globalization is said to restrict severely the state's capacity to fulfill its welfare function in advanced industrial
societies. This paper tests empirically the redistributive capacity of the state operationalized as the difference in percent
of households who live below 50% of the median income in their respective country before taxes and transfers and
after taxes and transfers, based on the latest Luxembourg Income Study data. Besides globalization, specific sets of
domestic political institutions predictably and systematically affect the redistributive capacity of the state: what is
termed ‘collective veto points’ buoy redistribution by the state, while ‘competitive veto points’ have the opposite
effect. Partisan coloration is introduced as a control variable which, surprisingly, does not affect this critical function
of the welfare state. The research design is a cross-sectionally dominant panel design (N=15, t=2). This study finds
evidence that globalization and collective veto points both positively affect the redistributive capacity of the state while
the converse is true for competitive veto points.