Catching up by transition: globalization as a generator of convergence in social spending

Over the past decades a clear consensus has emerged that welfare states do not converge, either because powerful partisan differences remain between countries or because institutional path dependencies lock in existing arrangements. Against this common wisdom, this article presents a new argument on why we in fact should expect to see some measure of catch-up following the rising economic globalization of the past couple of decades. The article posits that the risk exposure of the workforce is greater in traditionally closed economies than in traditionally open economies as economic globalization intensifies. The argument is tested in a novel set-up using times series cross-section regression analysis, which allows for a much more exact test of the argument than is normally provided in the literature. The empirical test clearly corroborates the argument.

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