Political economy in international perspective
Inhoudsopgave
Week 1: Introduction to comparative political economy .................................................................................. 2
Arts, W. and Gelissen, J. (2002) Three Worlds of Welfare Capitalism or More? A State-of-the-Art Report opens
in new window. Journal of European Social Policy 12(2): 137-158. ................................................................... 2
Starke, P. (2006) The Politics of Welfare State Retrenchment: A Literature Review. opens in new
window Social Policy & Administration 40(1): 104-120. .................................................................................... 3
Green-Pedersen, C. (2004) The Dependent Variable Problem within the Study of Welfare State Retrenchment:
Defining the Problem and Looking for Solutions. opens in new window Journal of Comparative Policy
Analysis 6(1): 3-14. ............................................................................................................................................. 3
Plümper, T., Troeger, V.E. and Manow, P. (2005) Panel data analysis in comparative politics: Linking method
to theory. opens in new window European Journal of Political Research 44(2): 327-354. ................................. 4
Week 2: Political parties, corporatism and socio-economic reforms ................................................................ 4
Pierson, P. (1996) The New Politics of the Welfare State opens in new window. World Politics 48(2): 143-179.
............................................................................................................................................................................ 4
Allan, J.P. and Scruggs, L. (2004) Political Partisanship and Welfare State Reform in Advanced Industrial
Societies opens in new window. American Journal of Political Science 48(3): 496-512. .................................... 5
Rueda, D. (2006) Social Democracy and Active Labour Market Policies: Insiders, Outsiders and the Politics of
Employment Protection opens in new window. British Journal of Political Science 36(3): 385-406. ................. 6
Emmenegger, P. (2009) Barriers to entry: insider/outsider politics and the political determinants of jobs
security regulations. opens in new window Journal of European Social Policy 19(2): 131-146. ........................ 6
Week 3: Globalisation I .................................................................................................................................. 11
Rodrik, D. (1998) Why Do Open Economies Have Bigger Governments? opens in new window Journal of
Political Economy 106(5): 997-1032. ................................................................................................................ 11
Burgoon, B. (2001) Globalization and Welfare Compensation: Disentangling the Ties that Bind opens in new
window. International Organization 55(3): 509-551. ....................................................................................... 12
Swank, D. and S. Steinmo (2002) The New Political Economy of Taxation in Advanced Capitalist
Democracies. opens in new window American Journal of Political Science 46(3): 642-655. ............................ 13
Genschel, P., A. Kemmerling and E. Seils (2011) Accelerating Downhill: How the EU Shapes Corporate Tax
Competition in the Single Market. opens in new window Journal of Common Market Studies 49(3): 585-606.
.......................................................................................................................................................................... 13
Working group.................................................................................................................................................. 14
Economic integration ....................................................................................................................................... 15
Impact on labour migration: two hypotheses .................................................................................................. 15
Rodrik 1998 .................................................................................................................................................... 16
Marloes van Dijk – 3573443
Week 4: Globalisation II ................................................................................................................................. 18
Yong Kwon, H. and J. Pontusson (2010) Globalization, labour power and partisan politics revisited. SocioEconomic Review 8(2): 251-281. ...................................................................................................................... 18
Walter, S. (2017) Globalization and the demand-side of politics: How globalization shapes labor market risk
perceptions and policy preferences. Political Science Research and Methods, 5(1): 55-80. ............................ 18
Hays, J.C. , S.D. Ehrlich and C. Peinhardt (2005) Government Spending and Public Support for Trade in the
OECD: An Empirical Test of the Embedded Liberalism Thesis. International Organization 59(2): 473-494. .... 18
Iversen, T. and Cusack, T.R. (2000) The Causes of Welfare State Expansion: Deindustrialization or
Globalization? World Politics 52(3): 313-349. .................................................................................................. 19
Week 5: Automation, digitalization and technological change ....................................................................... 20
Autor, D.H., D. Dorn and G.H. Hanson (2015) Untangling Trade and Technology: Evidence from Local Labour
Markets. The Economic Journal 125(584): 621-646. ........................................................................................ 20
Technological change ....................................................................................................................................... 21
Thewissen, S., and Rueda, D. (2019) Automation and the welfare state: Technological change as a
determinant of redistribution preferences. Comparative Political Studies 52(2): 171-208. ............................. 21
Busemeyer, M. and Sahm, A. (2022) Social investment, redistribution or basic income? Exploring the
association between automation risk and welfare state attitudes in Europe. Journal of Social Policy 51(4):
751-770. ........................................................................................................................................................... 22
Van Doorn, L. and O. van Vliet (2022) Wishing for More: Technological Change, the Rise of Involuntary PartTime Employment, and the Role of Active Labour Market Policies. Journal of Social Policy, 1-21. .................. 22
Week 6 ........................................................................................................................................................... 23
Presentation: .................................................................................................................................................... 23
College: ............................................................................................................................................................. 24
Week 1: Introduction to comparative political economy
Arts, W. and Gelissen, J. (2002) Three Worlds of Welfare Capitalism or More? A State-of-theArt Report opens in new window. Journal of European Social Policy 12(2): 137-158.
Arts and Gelissen's (2002) article provides a comprehensive review of the literature on
welfare states, focusing on the "three worlds of welfare capitalism" typology proposed by
Esping-Andersen (1990). The authors argue that this typology, which classifies welfare
states as liberal, conservative, or social democratic, is limited in its ability to capture the
diversity of welfare state models that exist.
The authors propose a more nuanced framework that takes into account additional
factors such as the role of the family and the labor market in providing social protection,
as well as the influence of globalization and European integration on welfare state
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policies. They also suggest that there may be multiple dimensions along which welfare
states can be classified, such as universalism, generosity, and decommodification.
Overall, the article provides a valuable overview of the current state of research on
welfare states, highlighting the need for more nuanced and multidimensional approaches
to understanding the diversity of welfare state models across different countries and
contexts.
Starke, P. (2006) The Politics of Welfare State Retrenchment: A Literature Review. opens in
new window Social Policy & Administration 40(1): 104-120.
Starke's (2006) article provides a comprehensive literature review on the politics of
welfare state retrenchment. The author explores the factors that contribute to the process
of welfare state retrenchment, such as economic crises, changes in the political landscape,
and shifts in public opinion.
The article also examines the strategies that governments use to implement
retrenchment, including cuts to benefits, changes to eligibility criteria, and reforms to the
institutional structures of welfare programs. The author highlights the importance of
understanding the political dynamics of welfare state retrenchment, including the role of
interest groups, political parties, and social movements in shaping the outcome of
retrenchment efforts.
The article concludes by calling for a more nuanced and contextualized approach to
understanding welfare state retrenchment, one that takes into account the specific
political and economic circumstances of each country and the complex interplay of actors
and institutions involved in the process. Overall, the article provides a valuable overview
of the current state of research on the politics of welfare state retrenchment, highlighting
the need for further investigation into this important area of social policy.
Green-Pedersen, C. (2004) The Dependent Variable Problem within the Study of Welfare
State Retrenchment: Defining the Problem and Looking for Solutions. opens in new
window Journal of Comparative Policy Analysis 6(1): 3-14.
Green-Pedersen's (2004) article addresses the "dependent variable problem" in the study
of welfare state retrenchment. This problem refers to the difficulty of defining and
measuring the concept of welfare state retrenchment, which can lead to inconsistent or
contradictory findings in research on the topic.
The author identifies several dimensions of welfare state retrenchment, including cuts to
benefits, changes to eligibility criteria, and reforms to the institutional structures of
welfare programs. However, the article notes that these dimensions can be difficult to
operationalize and measure, and that different researchers may use different criteria to
define retrenchment.
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To address this problem, the author suggests several solutions, including the use of
multiple indicators of retrenchment, the development of a standardized typology of
retrenchment measures, and the use of comparative case studies to identify patterns and
trends across different countries.
Overall, the article provides a valuable contribution to the study of welfare state
retrenchment, highlighting the importance of conceptual clarity and measurement
consistency in this area of research, and offering several strategies for addressing the
dependent variable problem.
Plümper, T., Troeger, V.E. and Manow, P. (2005) Panel data analysis in comparative politics:
Linking method to theory. opens in new window European Journal of Political
Research 44(2): 327-354.
Plümper, Troeger, and Manow's (2005) article focuses on the use of panel data analysis
in comparative politics research, emphasizing the importance of linking method to theory.
The authors argue that panel data analysis allows researchers to better understand the
causal relationships between variables and to control for confounding factors, thereby
enhancing the validity of comparative research.
The article provides a detailed overview of the principles of panel data analysis, including
the use of fixed and random effects models, the importance of identifying time-invariant
and time-varying covariates, and the advantages of longitudinal analysis over crosssectional analysis.
The authors also emphasize the importance of careful research design and the need to
incorporate theory into the analysis, highlighting the potential pitfalls of relying solely on
statistical techniques without considering the broader theoretical implications of the
findings.
Overall, the article provides a valuable guide to panel data analysis in comparative politics
research, emphasizing the importance of rigorous research design, careful data collection
and analysis, and theoretical grounding
Week 2: Political parties, corporatism and socio-economic reforms
Pierson, P. (1996) The New Politics of the Welfare State opens in new window. World
Politics 48(2): 143-179.
Pierson's (1996) article focuses on the new politics of the welfare state, highlighting the
changing political landscape that has shaped the development of welfare policies in recent
years. The author argues that the traditional model of the welfare state, based on a strong
and centralized state apparatus, has come under increasing pressure from a range of new
actors and forces.
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The article identifies several key factors that have contributed to this shift, including
economic globalization, demographic changes, and the rise of new social movements.
Pierson argues that these factors have undermined the traditional model of the welfare
state by eroding its fiscal base, challenging its legitimacy, and creating new demands for
social protection.
The article also examines the responses of different welfare states to these challenges,
highlighting the emergence of new policy approaches that emphasize decentralization,
marketization, and the targeting of benefits to specific groups.
Overall, the article provides a valuable overview of the changing political dynamics of the
welfare state, highlighting the importance of understanding the complex interplay of
economic, social, and political factors that shape welfare policies in different countries
and contexts.
Allan, J.P. and Scruggs, L. (2004) Political Partisanship and Welfare State Reform in
Advanced Industrial Societies opens in new window. American Journal of Political
Science 48(3): 496-512.
Allan and Scruggs' (2004) article examines the role of political partisanship in shaping
welfare state reform in advanced industrial societies. The authors argue that partisan
politics plays a significant role in shaping the direction and pace of welfare state reform,
with left-wing parties generally favoring more generous and expansive welfare policies,
and right-wing parties favoring retrenchment and restructuring.
The article provides a detailed analysis of the policy positions and actions of left- and
right-wing parties in several advanced industrial societies, including the United States,
Canada, the United Kingdom, Germany, and Sweden. The authors find that left-wing
parties are generally more supportive of welfare state programs and are more likely to
increase social spending, while right-wing parties are more likely to pursue retrenchment
and restructuring of welfare programs.
The article also examines the factors that influence the degree of partisanship in welfare
state reform, including the level of public support for welfare programs, the strength of
interest groups and social movements, and the political and institutional context in which
welfare policies are developed and implemented.
Overall, the article provides a valuable contribution to the study of welfare state reform,
highlighting the important role of political partisanship in shaping welfare policies and
the need to understand the broader political and institutional context in which welfare
reform takes place.
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Rueda, D. (2006) Social Democracy and Active Labour Market Policies: Insiders, Outsiders
and the Politics of Employment Protection opens in new window. British Journal of Political
Science 36(3): 385-406.
Rueda's (2006) article examines the relationship between social democracy and active
labor market policies (ALMPs), focusing on the ways in which social democratic parties
balance the interests of insiders (employed workers) and outsiders (unemployed or
precarious workers) in employment protection policies.
The article argues that social democratic parties face a difficult balancing act in designing
ALMPs that both protect the interests of insiders and provide opportunities for outsiders
to enter or re-enter the labor market. The author identifies three key factors that shape
the approach of social democratic parties to ALMPs: the structure of the labor market, the
electoral incentives faced by parties, and the ideological commitments of parties to social
democratic principles.
The article provides a detailed analysis of the policy positions and actions of social
democratic parties in several European countries, including Denmark, Sweden, and
Germany. The author finds that social democratic parties have pursued a range of ALMPs,
including training and education programs, job creation schemes, and unemployment
insurance reforms, in order to balance the interests of insiders and outsiders.
Overall, the article provides a valuable contribution to the study of social democracy and
labor market policies, highlighting the complex political and economic factors that shape
the design and implementation of ALMPs in different contexts. The author emphasizes the
importance of understanding the diverse approaches taken by social democratic parties
in order to identify the most effective policies for promoting employment and social
protection.
Emmenegger, P. (2009) Barriers to entry: insider/outsider politics and the political
determinants of jobs security regulations. opens in new window Journal of European Social
Policy 19(2): 131-146.
Emmenegger's (2009) article examines the role of insider/outsider politics in shaping job
security regulations in different countries. The author argues that the level of job security
provided by labor market regulations is influenced by the relative power of insiders (i.e.
employed workers with job security) and outsiders (i.e. unemployed or precarious
workers) in the political system.
The article provides a comparative analysis of the relationship between insider/outsider
politics and job security regulations in several European countries, including Germany,
Sweden, and the United Kingdom. The author finds that countries with strong
insider/outsider cleavages are more likely to have high levels of job security regulations,
as insiders have more political power to shape labor market policies in their favor.
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The article also examines the factors that shape the degree of insider/outsider politics in
different countries, including the strength of trade unions and other interest groups, the
structure of the labor market, and the political and institutional context in which labor
market policies are developed and implemented.
Overall, the article provides a valuable contribution to the study of job security
regulations and insider/outsider politics, highlighting the importance of understanding
the political dynamics that shape labor market policies in different contexts. The author
emphasizes the need to take into account the power relations between different groups
in society when analyzing the impact of labor market policies on employment outcomes.
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Presentation 1: describing the article Allen and Scruggs (2004)
Very remarkle to use replacement rate to measure the welfare state instead of focusing
on social spending. One problem is that you dont consider instutional things.
However, with replacement rate, it don’t take into account the duration of benefits. They
look at the level of benefits, but the duration might be very relevant. What is the maximum
duration? Important! Also, obligations are not taken into account. If you receive benefits,
you might be obligated to send 2 letters.
But, they did use the net replacement rate (the opposite is: gross). But they used net
replacement rate and taxation differs across countries. So they used the net replacement
rates. They did not invent replacement rate, the OECD did that.
Presentation 2: critical view on the article
-
How are the subjects coded? Which considerations are made and what are the
influences they might have on the final results?
Which omitted variables could be present? Time periods?
Regression results: bias?
Could always be more critical about methods, technics and results
Political implications? How can this be seen as valid? And how can the choices
that they made, can be explained?
Lagged value: t minus 1 is when u measure before a time period and then after
They measured convergence in the second approach, which one?
For instance table 2? In colom 6 there is “convergence term only”, what do we look at?
It means:
Is replacement rate y or x or both? In convergence term it looks like its x, but it is both.
You include the y also at the right side of the equation
Yt=a+Ye-1+Xe-1+e
Old replacement have an effect on new replacement rates
This is called path dependency but also it is called
To a large distinct, the policy from this year is very much dependent on earlier policies
In the table: what does minus 0.03 mean? It is the coefficient of Beta:
Yt=a+BYe-1+Xe-1+e
What does this tell about convergence?
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Imagine u have 2 countries, one country has a higher value of replacement than the other.
What happends over time? Higher value of Y, the whole thing becomes larger
When the whole country has a negative
When the country has already a negative coefficitent, that gives an indication of
convergence

Pierson, P. (1996) The New Politics of the Welfare State opens in new
window. World Politics 48(2): 143-179.
The paper is about:
-
-
He argues of a visualization of the welfare state that there is an new
Different types of goals
Some concepts: we need to look at policymakers try to avoid blame
o Opposite: credit claming. Why did that change? Because a pattern of
globalization. No one wants to claim that they change the welfare state
because it is not that popular.
o Beginning of the 80s there was an growth of the welfare state. But now,
political ara: less popular so blame avoidance.
o But these politics are not just about opposite of politicts of welfare
expansion
o That will lead to welfare change
o Major claim; we don’t see that much change and big reforms and retrenches
o Second argument: change in new politics about the welfare state is a
response to a previous trend (a classical approach that argued a distincition
right and left: power recources theory. why do right and left have different
preferences? Basic idea: left wing represent working class and right wing
does represent employer of upper class)
o But this is not anymore the case! New politics of welfare state: no more just
right and left parties but more ??
o 2 important ideas:
 1) path dependency: status quo/ decision making in the past
influences policies in the future. Pension schemes EG: long term
policy. If you have a “pay as you go”, you can’t just change to another
system in a year. That in itself makes it difficult to change.
 2) politicial dimension (NEW): receptions in welfare systems will
organize themselves in groups. Main argument: the existence of
welfare state creates new groups and they oppose new welfare
programs  new type of path dependency. This was the
contribution of Pierson  These interest groups are created by the
welfare system itself
Adapt to create policy to the audience
There is a trend of finding consensus to spread blame
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-
Welfare state is changing and losing power to other parties
Reforms of welfare state is not visible but behind doors
Rueda, D. (2006) Social Democracy and Active Labour Market Policies: Insiders, Outsiders
and the Politics of Employment Protection opens in new window. British Journal of
Political Science 36(3): 385-406
The article builds upon
-
Insiders VS outsiders
Insiders are the ones with secured employance so permanent contracts (represented by
unions) and outsiders are without secured employance.
What is the depedent variable that he is examines?
Active labor market policies
The left parties are represented by…
What is the basic hypothesis?
That the insiders would not propose active labor market policies because it would benefit
the outsiders.
Why would active labor market policies favor outsiders?
By nature they would allow people to return to the labour market by retraining. For
insiders that would be negative for their labor market position. It would lead to a shift in
employer supply. More outsiders would get a job and that ‘threatens’ the position of the
insiders
Second argument:v
Negative effect on taxes system. The insiders would pay more taxes to fund the active
labor market policies. Insiders are not in favor of spending more on active labor market
policies
But the power resources theory would assume that left wing parties would be less in favor
of the active labor market policies because zij uit de working class bestaan (insiders) 
discrepancy
When insiders feel more vulnerable, they would be in favor of the active labor market
policies. Where do we find this argument in the paper?
P 389. He says: when unemployment rates are increasing, insiders feel more vulnerable
and they are more likely to be in favor of the ALMP. The labor market position is as strong
as the employment protection legislation. When it gets less strict, the position of insiders
tend to look more like those of outsiders
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In table 4: important to find the answer of the evidence is in line with the argument above?
Try to find out what is the main argument? Which evidence is provided? Is it in line?

Emmenegger, P. (2009) Barriers to entry: insider/outsider politics and the
political determinants of jobs security regulations. opens in new window Journal
of European Social Policy 19(2): 131-146.
If u are a insider, you should be supportive of a ALMP but you take into account what
you’re future plans are (maybe you know you get a permanent contract next year) 
controdictive to Rueda
Results: not very much difference between insiders en outsiders for job security
Which measure did he use?
(one of the survey questions: )Whether governments should take actions to protect
people in jobs in declining industries?  why used this question? It is very general and
used for different things but not direct measuring ALMP
The question is whether he is using stronger assumptions? is his empirical evidence more
convincing? Discutable.
What are the main points of critique? How does that relate to the original work of Rueda
Week 3: Globalisation I
Rodrik, D. (1998) Why Do Open Economies Have Bigger Governments? opens in new
window Journal of Political Economy 106(5): 997-1032.
Rodrik's (1998) article explores the relationship between economic openness and the
size of government in different countries. The author argues that open economies tend to
have larger governments, as they face greater economic and political pressures to provide
social protection and other public goods.
The article provides a theoretical framework for understanding the link between
economic openness and government size, drawing on insights from political economy and
international trade theory. The author identifies three key channels through which
economic openness can lead to larger government: (1) increased economic volatility and
risk, which creates demand for social insurance and other forms of public protection; (2)
greater exposure to international competition, which requires governments to provide
public goods and infrastructure to support export-oriented industries; and (3) higher
levels of income inequality, which generate political pressure for redistributive policies
and social spending.
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The article also provides empirical evidence to support the hypothesis that open
economies tend to have larger governments. The author analyzes cross-country data from
the 1980s and 1990s and finds a positive correlation between economic openness and
government size, even after controlling for other factors that might affect government
spending.
Overall, the article provides a valuable contribution to the study of the political economy
of open economies, highlighting the ways in which economic globalization can shape the
size and role of government in different countries. The author emphasizes the importance
of understanding the political and economic context in which government policies are
developed and implemented, in order to better understand the impact of economic
openness on public policy and social outcomes.
Burgoon, B. (2001) Globalization and Welfare Compensation: Disentangling the Ties that
Bind opens in new window. International Organization 55(3): 509-551.
Burgoon's (2001) article examines the relationship between globalization and welfare
compensation, with a focus on disentangling the complex causal ties between these two
phenomena. The author argues that while globalization can have a negative impact on the
welfare state, the precise effects depend on a range of factors, including the level of
economic integration, the type of welfare state, and the political institutions and
processes that shape welfare policy.
The article provides a comprehensive review of the existing literature on globalization
and welfare compensation, drawing on a range of theoretical perspectives and empirical
studies from different countries and regions. The author identifies several key
mechanisms through which globalization can affect the welfare state, including increased
economic competition, migration, and capital mobility, as well as changes in the political
and ideological climate that shape public attitudes towards welfare spending.
The article also provides a detailed analysis of the ways in which different types of welfare
states are affected by globalization, highlighting the importance of institutional and
political factors in shaping the impact of economic integration on social policy. The author
argues that while globalization can pose significant challenges to the welfare state, it can
also create opportunities for policy innovation and adaptation, particularly in countries
with strong social democratic traditions and institutions.
Overall, the article provides a nuanced and comprehensive analysis of the relationship
between globalization and welfare compensation, emphasizing the need to take into
account the complex causal mechanisms and institutional factors that shape this
relationship. The author highlights the importance of policy responses that are tailored to
the specific challenges and opportunities presented by globalization, in order to preserve
and strengthen the welfare state in the face of economic and social change.
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Swank, D. and S. Steinmo (2002) The New Political Economy of Taxation in Advanced
Capitalist Democracies. opens in new window American Journal of Political Science 46(3):
642-655.
In their article "The New Political Economy of Taxation in Advanced Capitalist
Democracies," Swank and Steinmo argue that changes in the global economy, particularly
the rise of globalization and the decline of the welfare state, have led to a shift in the way
that advanced capitalist democracies approach taxation. They argue that there has been
a move away from progressive taxation and a greater reliance on regressive consumption
taxes. They attribute this shift to the changing nature of the labor market, which has led
to a decline in the power of labor unions and a corresponding increase in the power of
business interests. They also argue that the shift towards consumption taxes is a response
to the growing need for governments to compete in the global economy, as these taxes are
seen as less damaging to economic growth than income taxes. Overall, Swank and Steinmo
suggest that the new political economy of taxation is marked by a greater emphasis on
economic efficiency and a corresponding decline in the importance of social equity.
Genschel, P., A. Kemmerling and E. Seils (2011) Accelerating Downhill: How the EU Shapes
Corporate Tax Competition in the Single Market. opens in new window Journal of Common
Market Studies 49(3): 585-606.
The article examines how the European Union (EU) shapes corporate tax competition in
the single market. The authors argue that the EU has a significant impact on corporate tax
competition through its regulatory policies, including state aid rules, fiscal policy
coordination, and the harmonization of tax bases. They contend that the EU's regulatory
framework increases the competitiveness of low-tax countries by limiting the ability of
high-tax countries to provide state aid or coordinate their fiscal policies. As a result, this
dynamic encourages a race to the bottom in corporate tax rates, which ultimately
undermines the effectiveness of the single market. The authors conclude by suggesting
that the EU needs to address the issue of corporate tax competition in a more coordinated
and effective manner if it hopes to achieve its objectives of promoting economic growth
and competitiveness within the single market.
Presentation: Genschel, P., A. Kemmerling and E. Seils (2011) Accelerating Downhill: How
the EU Shapes Corporate Tax Competition in the Single Market. opens in new
window Journal of Common Market Studies 49(3): 585-606.
Group “discussants”
-
To what extent do the discussants criticise the main issues (theory and
hypotheses; research design, data, methods and techniques; results; conclusions
and policy implications) of the article?
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To what extent are the main issues explained correctly?
Have the presenters used clear slides?
-
Time management (no more than 10 minutes)
Do the discussants respond adequately to the authors?
Plümper, T., Troeger, V.E. and Manow, P. (2005) Panel data analysis in comparative
politics: Linking method to theory. opens in new window European Journal of Political
Research 44(2): 327-354.
-
Dummy’s/ kritiek op regression
Working group
What is globalization?
The increased process of economic, social, and political international integration.
Economic  trade (imports+exports) as % of GDP (increasing over years)
Deglobalization: opposite (awareness due covid)
-
Maybe beneficial to produce some things in your own countries
Protectionism: us/china, maybe nl also: role of ASML: debate topic
Production chains are becoming longer and more fractionated, smaller parts are made in
40 more countries and finally assembled: for the cheapest.
Due covid: more aware of the vulnerability
Also increase in welfare, productivity went up, source for economic increase/growth
Recession  due to supply chain issues, Ukraine
Lately, it is less recession/negative figures than expected half year ago because of larger
consumption in China than expected so more import to china and more export in
Germany. If people in China buy more BMW, there is more export from Germany.
What could be a second indicator for internation integration?
 capital flows : foreign direct investments (inflows + outflows) as % of GDP
in 1990 the levels are relatively low, but since the nineties there is a steep increase
How could you measure international globalization? Social globalization?
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 migration, more globalized people move around more so for example labour market
migration
 Americation? The amount of mcdonalds over the world or the amount of ikea stores
around the world
Economic integration
Trade, capital, migration (week 6)
Actual flows of import and export, policy might affect this but could also just be other
flows
Policy restrictions: labour migration
Impact on labour migration: two hypotheses
 positive and negative, the two hypotheses are called:
Efficiency hypothesis: expect negative affect between globalization and spending on the
welfare state
-
-
Argument: more taxes from foreign companies, lower tax rates attracts investors
When borders open up, firms are becoming more mobile, it becomes easier to
move production to another country where it is cheaper. Governments have the
incentive to keep taxes low to keep firms in their borders and/or to attract
investors.
Most important reason: with more firms, you have employment so the
employment rate will be higher
Tax competiton: landen willen allemaal de laagste tax rate hebben dus
verlaagden ze naar aanleiding van elkaars verlaging.
Conclu: more globalization means less spending on welfare
Compensation hypothesis: expect positive affect between globalization and spending on
the welfare state
-
Argument: With higher risk, people experience higher levels of risk and economic
volatility, to compensate uncertainty, social expenditure increases
Workers are faced with the risk of losing their job because firms can move their
fabric to another country
Downwards pressure on the wages, so this is the economic risk that leads to
increased uncertainty so more spending on welfare state.
How should the government react on this? More or less globalization?
 from academic perspective: which hypothesis is true?
From policy making perspective: what works?
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Less supply in terms of tax revenues, simultaneously higher demand for social
protection
That is called the: Globalization dilemma
Rodrik 1998: one of the first one that wrote in favor of compensation hypothesis

Rodrik, D. (1998) Why Do Open Economies Have Bigger Governments? opens in
new window Journal of Political Economy 106(5): 997-1032.
Table 2:
What does he uses for the dependent variable? Which measure? What kind of spending?
Just social spending or broader?
 real government spending: all consumption but excluding income transfers and public
investment. Higher level of social expenditure and higher governmental consumption.
Governmental consumption is included to account for countries without a welfare.
P. 1014: One is terms-of-trade risk, which is the measure used in the model above. In an
economy with no market imperfections, a measure of the volatility of the streams of
income associated with fluctuations in the external terms of trade not only would be the
theoretically appropriate measure of external risk, but would be the only relevant
measure of such risk.
There are larger fluctuations then on national levels (?)
What does it mean for the volatility?
 If a larger part of your GDP is part of the world economy  you are at higher risk
His measure was the fluctuations, multiplied by the openers
With more sectors, you are less vulnerable than when 1 thing that a country is producing.
When the price of that specific thing goes down, no problem
Burgoon, B. (2001) Globalization and Welfare Compensation: Disentangling the Ties that
Bind opens in new window. International Organization 55(3): 509-551.
-
Main argument: different groups demand different reactions to globalization
(figure 1)
Dependent variable: spending on different kind of welfare programs
Independent variable:
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-
Looking at the more vulnerable group:
o You can expect for more demand for welfare expansion
o Less demand for welfare retrenchment
Is the evidence in line with the hypothesis?
He looked at international trade openness, he looked at import at low wage countries but
why? That are the ones that threaten vulnerable groups

Swank, D. and S. Steinmo (2002) The New Political Economy of Taxation in
Advanced Capitalist Democracies. opens in new window American Journal of
Political Science 46(3): 642-655.
-
About tax competition, argues for the efficiency hypothesis
Institutionalization
Dependet variable: capital and Labour tax rates
-
Corporate tax rate
-
Statutory tax rate: defined in the law
Tax base: gets manipulated to compete through tax
Effective tax rate: combined statutory tax and tax base
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Week 4: Globalisation II
Yong Kwon, H. and J. Pontusson (2010) Globalization, labour power and partisan politics
revisited. Socio-Economic Review 8(2): 251-281.
Yong Kwon and Jonas Pontusson's article, "Globalization, labour power and partisan
politics revisited," published in the Socio-Economic Review, revisits the debate on the
effects of globalization on labor power and partisan politics. They argue that while
globalization has reduced labor's bargaining power, it has also increased the importance
of partisan politics in shaping the distribution of income.
Kwon and Pontusson use cross-national data to test their argument and find that leftleaning governments are more likely to reduce income inequality, particularly in
countries where labor power has been weakened by globalization. However, they
caution that the relationship between partisan politics and income inequality is complex
and contingent on a range of political and economic factors.
Overall, Kwon and Pontusson's article highlights the ongoing importance of political
institutions and partisan politics in shaping the effects of globalization on labor and
income distribution
Walter, S. (2017) Globalization and the demand-side of politics: How globalization shapes
labor market risk perceptions and policy preferences. Political Science Research and
Methods, 5(1): 55-80.
In "Globalization and the demand-side of politics: How globalization shapes labor
market risk perceptions and policy preferences," Sebastian Walter explores how
globalization affects individuals' perceptions of labor market risks and their policy
preferences. Walter argues that globalization generates job insecurity and wage
stagnation, which in turn shape individuals' risk perceptions and their demand for
policy interventions to mitigate these risks.
Drawing on survey data from several European countries, Walter finds that exposure to
globalization increases individuals' perceived risk of job loss and wage decline, and also
increases their demand for government interventions to address these risks.
Furthermore, Walter shows that the impact of globalization on risk perceptions and
policy preferences is mediated by individuals' occupational status and educational
attainment. Overall, Walter's article highlights the importance of considering the
demand-side of politics in understanding the political implications of globalization.
Hays, J.C. , S.D. Ehrlich and C. Peinhardt (2005) Government Spending and Public Support
for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis. International
Organization 59(2): 473-494.
In their article "Government Spending and Public Support for Trade in the OECD: An
Empirical Test of the Embedded Liberalism Thesis," James Hays, Scott Ehrlich, and Clint
Peinhardt test the embedded liberalism thesis, which posits that strong welfare states
are necessary for sustaining public support for free trade.
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Using data from OECD countries, they argue that government spending on social welfare
programs serves as a compensatory mechanism that offsets the negative effects of trade
on individual well-being, thus increasing public support for trade.
They also argue that trade openness can erode support for the welfare state, creating a
tension between trade and social welfare policies. Hays, Ehrlich, and Peinhardt find
support for the embedded liberalism thesis, as higher levels of government spending on
social welfare programs are associated with higher levels of public support for trade.
They also find that trade openness is associated with lower levels of public support for
social welfare spending.
Overall, their article highlights the important role of social welfare policies in
maintaining public support for free trade, and the potential trade-offs between trade
openness and social welfare spending.
Iversen, T. and Cusack, T.R. (2000) The Causes of Welfare State Expansion:
Deindustrialization or Globalization? World Politics 52(3): 313-349.
In "The Causes of Welfare State Expansion: Deindustrialization or Globalization?" Torben
Iversen and Thomas Cusack examine the competing explanations for the expansion of the
welfare state in advanced capitalist democracies.
They consider two main arguments: the deindustrialization thesis, which posits that the
decline of traditional industries and the rise of the service sector increased demand for
social welfare programs, and the globalization thesis, which argues that the increasing
international competition and capital mobility constrained governments' ability to
implement redistributive policies.
Iversen and Cusack use cross-national data and case studies of Sweden and the United
Kingdom to test these arguments. They find support for both the deindustrialization and
globalization theses, but argue that the relative importance of each factor depends on the
specific national context. They also argue that political institutions, particularly the
strength of labor unions and the left, play a key role in mediating the effects of these
structural factors on welfare state expansion.
Overall, Iversen and Cusack's article highlights the complex and multifaceted nature of
the factors driving the expansion of the welfare state in advanced capitalist democracies.
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Week 5: Automation, digitalization and technological change
Beginning industrial revolution: people feared that there were less jobs and then they
would lose their jobs due to the machines, same fear with phones, trains, robots etc. Partly
true, technological changes did replace some manual work but it did not result in massive
unemployment. Why? Due productivity growth, it is driven by 1. population size and gdp/
2. by technological change. So it leads to more consumption, leads to more demand and
leads to more jobs. Secondly, it leads to more jobs such as a job designer.
-
Globalization and technological change progressed simultaneously
Globalization and technological change have a comparable effect on the demand
for labour
Autor, D.H., D. Dorn and G.H. Hanson (2015) Untangling Trade and Technology: Evidence
from Local Labour Markets. The Economic Journal 125(584): 621-646.
The article "Untangling Trade and Technology: Evidence from Local Labour Markets"
examines the effects of trade and technology on local labor markets in the United States.
The authors, Autor, Dorn, and Hanson, argue that previous research has failed to
distinguish between the effects of trade and technology on employment and wages, and
that this has led to incorrect policy conclusions.
The authors use data on local labor markets from 1990 to 2007 and find that trade with
China has had a significant negative effect on employment and wages, while technological
change has had a significant positive effect on wages but not employment. They also find
that the negative effects of trade with China are concentrated in manufacturing and in
areas with high levels of exposure to Chinese imports.
Overall, the authors argue that policies aimed at addressing the negative effects of trade
and technology should be tailored to the specific characteristics of local labor markets.
They suggest that policies aimed at helping workers adjust to technological change, such
as job training programs, may be more effective than policies aimed at restricting trade.
-
As a result of imports: employment declined in sectors that are exposed to
-
international trade
Technological change: neutral effect on overall employment of a sector, but
within a sector, low demand for low skilled employees, higher demand for high
skilled employees.
How was he able to disidentify these effects?
 looking at trade with China, why? China joined the WTO(?) in 2000 and it led to a
increase in import and export  in 2001, it was mainly manufacturing goods, that did
effect the US because the US still had a lot of manifacturay. In the NL we never really had
that so it did not affect our manufacturing industry very much but the US did so it
affected them more. So it did not have a large labour market effect in the NL but it did in
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the US labour market. Mayor impact on the domestic labour market in US. This was the
electoral campaign of Trump.
How does that help of this entangling this effect?
There was clear shock, clear before and after 2001, globalization is increasing slowly
over time but this was a clear threshold/shock. Before joining the import from China
was VERY low and after the joining it was VERY high.
What is a commuting zone? A area where …
Technological change
-
-
-
Skill biased technological change (SBTC)
o Low demand for low skilled and high demand for high skilled and effect on
wages
Routine biased technological change (RBTC)
o Low skilled work requires more routine and therefore it is easier to replace
it by software/machines
o So it has not to do with low skill but more the task of the occupation/job
o More routine  higher change to be replaced by technology
Challenge for empirical analysis
Outcomes:
o Employment effects
o Income inequality
o Contract type
Table  A decline in middle payed jobs + a increase in low and high payed jobs so a U
shape
Thewissen, S., and Rueda, D. (2019) Automation and the welfare state: Technological change
as a determinant of redistribution preferences. Comparative Political Studies 52(2): 171-208.
Thewissen and Rueda's (2019) article investigates how automation, or technological
change, affects individuals' preferences for redistribution through the welfare state. They
argue that automation can increase the salience of economic insecurity and inequality,
which in turn may lead individuals to support more redistributive policies. However, they
also acknowledge that automation can create winners and losers, and that the effects of
automation on individuals' preferences for redistribution may depend on their position
in the labor market.
To test their argument, the authors use data from the European Social Survey (ESS) and
the International Social Survey Programme (ISSP) to examine how exposure to
automation (measured as the share of routine tasks in one's job) affects support for
redistribution. They find that exposure to automation increases support for
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redistribution, particularly among those with low education and low income. They also
find that the effect of automation on redistribution preferences is stronger in countries
with more generous welfare states, suggesting that the welfare state may act as a buffer
against the negative effects of automation.
Overall, Thewissen and Rueda's article contributes to our understanding of the political
implications of automation and highlights the importance of considering how
technological change affects individuals' preferences for redistribution through the
welfare state.
Busemeyer, M. and Sahm, A. (2022) Social investment, redistribution or basic income?
Exploring the association between automation risk and welfare state attitudes in Europe.
Journal of Social Policy 51(4): 751-770.
The study conducted by Busemeyer and Sahm explores the relationship between
attitudes towards welfare state policies and the perceived risk of automation in Europe.
The authors aim to examine whether individuals who perceive a higher risk of automation
are more supportive of policies such as basic income, social investment, or redistribution.
Using data from the European Social Survey (ESS) round 8 (2016), the study finds that
individuals who perceive a higher risk of automation are more likely to support policies
that focus on social investment rather than redistribution or basic income. Furthermore,
the study suggests that these attitudes are influenced by individual characteristics such
as age, education, and income, as well as national-level factors such as labor market
institutions and the welfare state regime.
Overall, the study highlights the importance of understanding the association between
attitudes towards welfare state policies and the perceived risk of automation, and the
need to consider both individual and institutional factors in shaping these attitudes.
Van Doorn, L. and O. van Vliet (2022) Wishing for More: Technological Change, the Rise of
Involuntary Part-Time Employment, and the Role of Active Labour Market Policies. Journal
of Social Policy, 1-21.
The study conducted by Van Doorn and Van Vliet investigates the relationship between
technological change, involuntary part-time employment, and the effectiveness of active
labor market policies (ALMPs) in addressing these issues. The authors aim to examine
whether the implementation of ALMPs can help reduce the negative effects of
technological change on the labor market, particularly in relation to involuntary part-time
work.
Using data from the European Labour Force Survey (EU-LFS) for the period of 2007-2019,
the study finds that technological change has led to an increase in involuntary part-time
work, particularly for low-skilled workers. The authors argue that this trend highlights
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the need for effective ALMPs to support workers in transitioning to new employment
opportunities.
The study further shows that the implementation of ALMPs, such as training and
education programs, can effectively reduce the negative effects of technological change
on the labor market, particularly for low-skilled workers. However, the authors note that
the effectiveness of ALMPs may be limited by institutional and political factors, such as
differences in labor market institutions across countries.
Overall, the study highlights the importance of effective ALMPs in addressing the negative
effects of technological change on the labor market and the need for policy makers to
consider institutional and political factors in designing and implementing these policies.
Nazoeken  robustnesscheck table 6 ?
Week 6
Presentation:
De Giorgi, G. and M. Pellizzari (2009) Welfare migration in Europe opens in new window.
Labour Economics 16(4): 353-363.
-
Earlier studies based on aggregate data
Unemployment shock
Research design
-
Examining the individuals welfare state expectations and migration
Estimate standard model
Data
-
Microlevel
What moves individuals to move to another country?
Variables: unemployment rate, average real wage, average benefit level
Across countries, 5 year interval
Recent studies were more regional instead of cross country
Results
-
Migrants tend to go to countries with a more generous welfare system
Conclusions
-
The generosity of welfare state affects migrants but the effects are low
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-
Large numbers of non working immigrants can strain the welfare system 
decrease in the quality of the system
?
Implications
-
Welfare systems are not the primary driver
Implications:
o Integration policies or labor market policies
REVIEWERS:
Points of critique:
-
Methods: the concept of benefits
Employment before getting unemployment benefits  can it be assumed that people who
migrate to these countries WILL find jobs to eventually reap these benefits?
If coming to a country without a job, then a lot of benefits are out of reach
Graph: aged 40, paid contributions since 18 – not the case for others
-
Methods: benefit taxation
Paper: acknowledges that benefit levels in the paper are “computed without considering
the taxation of benefitsm which indeed taxed in many OECD countries”
This might be too important to simply be acknowledged…
-
Flawed robustness check logic
Paper assumes that unobservable labour and observarble labour market conditions
follow similar trends with regards to welfare generousity
Critique:
-
Does not explain the mechanisms behind this logic
Empiricaly assumes
Policy implications
-
Impact of differences in welfare institutions on migration across the EU would be
limited
College:
What drives people? Yes the welfare state but this is relatively to the system of their home
country. graphically models: why are two things attracted to each other?
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To explain why there is trade EG: factors like price or geography but use of this models
can explain
Fenwick and Van Vliet (2021): Globalization is not taken into account in migration studies
because of lack of data. Graph: you see in Ireland or Austria relatively mmore labour
migrants.
Within Europe, the correct term would not be EU migration but EU mobility
Situation 1: no migration
-
2 countries, foreign country and home country
L vertical: amount of labor in home country and. Equilibrium with W --> wage
Foreign country: L’ and W’  wage
Finally, the wages will be the same (rechter stipje)
Situation 2: where migration is possibe
-
Net effect is triangle B home
Net effect is triangle C foreign
Migration leads to welfare gain, in every countries, where do these come from?
o Workers from the county with lower productivity move to countries with a
higher productivity and that leads to higher welfare gains because:
 More production, more consumption? More individuals that could
contribute to the economy
 More allocation of productivety and therefore more more output
(goods/services etc) so more consumption so more welfare gains!
(taking ceteris paribus in consideration)
Distributional effects: more welfare gains not for everyone? Who are the winners and the
losers? Winners are the employers and the losers are?
What would you do as a policy advisor? Maybe tax to protect the home workers
-
Protectionism: fewer migrants and the result would be smaller welfare gains
Increase the generosity of the welfare state, you can use the welfare gains to pay
for it, increasing the taxes
Compensate the losers through redistribution (embedded liberalism)
Effects of immigration
1. Labour market effects (welfare effects as a consequence of changes in wages and
employment)
2. Budgetary effects (taxes and benefits)
3. Societal effects (cultural differences); religion, changing neighborhoods
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
Kvist, J. (2004) Does EU Enlargement Start a Race to the Bottom? Strategic
Interaction among EU Member States in Social Policy. opens in new
window Journal of European Social Policy 14(3): 301-318.
In this article, Kvist explores the idea that the enlargement of the European Union (EU)
may lead to a "race to the bottom" among member states in terms of social policy. He
argues that the potential for such a race exists because of the way that social policy
decisions are made within the EU, which involves a complex process of strategic
interaction among member states. Kvist suggests that the enlargement of the EU could
exacerbate this strategic interaction by introducing new actors with different interests
and preferences. Ultimately, he concludes that the impact of enlargement on social policy
in the EU is difficult to predict and will depend on a variety of factors, including the
behavior of member states and the policies of the EU itself.

Gaston, N. and G. Rajaguru (2013) International migration and the welfare state
revisited. opens in new window European Journal of Political Economy 29: 90101.
Gaston and Rajaguru examine the relationship between international migration and the
welfare state. They argue that while some researchers have suggested that migration can
lead to a reduction in the welfare state, this view is too simplistic and does not account for
the complex ways in which migration can affect the economy and society. Instead, the
authors propose a more nuanced approach that takes into account factors such as the type
of migrants, the skill level of migrants, and the structure of the welfare state. Using data
from the Organisation for Economic Co-operation and Development (OECD), they find
that the effect of migration on the welfare state is not straightforward, but depends on
these and other factors. They also suggest that policies that address the challenges and
opportunities presented by migration can help to mitigate any negative effects on the
welfare state. Overall, the article provides a useful perspective on the complex
relationship between migration and the welfare state, and highlights the importance of
considering multiple factors in any analysis of this relationship.
Migration and welfare state
-
Bad risks are attracted to countries with generous social securaity
Goods risks are attracted to countries with low taxes and contribution
This goes on and on  Downwards convergence: social race to the bottom
Results de Giorgi and pellizzari (2009)
o Positive and signifact effect between immigration on welfare state
o “efficiency and Compensation hypothesis” renamed as XX
redistribution hypothesis (not in line with earlier theory)
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and
-
o Table 2: found a negative effect when studing OECD countries and high
schooled educations, are more attracted with countries with less generous
welfare states: more in line with the risk theory above
 Changing the causality (reverse causality); switching the variables
Resuls Gaston and Rajaguru (2013)
Three mechanisms:
-
-

Actual budgetary pressure
o Reason for a government to …
Preventive strategies interactions between countriss
o To make the welfare state less generous
o One country does it and others follow
Policy reactions because of voters
o When voters have the idea that migration is bad for the economy so that
perspective alone would be a reason to change the welfare state system
Colantone, I. and P. Stanig (2018) Global Competition and Brexit. opens in new
window opens in new window American Political Science Review 112(2): 201218.
The article "Global Competition and Brexit" by Colantone and Stanig explores the
relationship between globalization, economic competition, and the decision of the United
Kingdom to leave the European Union (Brexit). The authors argue that increasing global
competition, particularly from China, led to a decline in the manufacturing sector in the
UK, which in turn contributed to support for Brexit among UK citizens. The article
employs both statistical analysis and case studies to provide evidence for their argument,
concluding that Brexit was not simply a result of domestic political factors but was also
influenced by broader economic trends.
-
Debate was about the health care system because of the pressure from immigrants
from eastern western countries --> in the Brexit campaign
People that are exposed to globalization, are more in favor of leaving the EU
Brexit
Globalization and actual voting behaviour
International trade versus immigration
Immigration: impression of the general economic situation rather than the
individual economic situation
They compared regions within the UK
Table 2: they find a positive effect of the import shock
o Significant for immigrations
o But a negative effect for …
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-
Living in a region with more exposure with immigration and globalization, will
lead to a less favor of leaving the EU -> so the opposite of the expectation
It is about that you think that immigration would be a problem
Limitations:
-
Reduction approach
More competition for housing market could be a vairble: housing market
-
Last week debate about Chinese import: is it globalization and immigration or is it
about digitalization and technologies
You could argue that the robustness check is the most important effect: EU accession
immigrants growth (2001-2011)
Thirdly; idea of winners and losers: they did not control for generousity of welfare state
systems and when only focusing on UK, but there is not very much differentiation between
regions but it could have an effect. Maybe individuals with welfare benefits would be more
in favor of leaving EU?
Net fiscal position in The Netherlands
Table 6: netto bijdrage aan collectieve sector per migant is positief, but very narrow
exercise
How could we explain that the general spending increased doubled? Maybe the financial
crisis?
Broader picture  the percentage individuals receiving social transfers
How can we explain that in the years the migrants start to receive more social transfers?
In the beginning there are more young people who do have a job and just work here. When
staying longer, after 10 years you get children so use children benefits or you get ill and
use the healthcare systems. Or just understand the system better and people understand
better where they can get benefits for.
Fiscal position: the sum of what you receive from the government and what you pay to
the government
Evidence, labour market effects in The Netherlands
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-
Strong heterogeneity across sectors
SEO (2014): some evidence for displacement effects at the macro level, not the
microlevel
International competition: winners and losers
Bogus constructions: companies circumventing legislation, false self employment
Policy issues
-
Net fiscal position in the future?
Policies amined at attracting high skilled migrants
Distrincition between types of policies: contributory versus non contributory
social policies
o Unemployment benefits only available when paying contributions?
o Social assistance are payed by taxes
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Week 7
Dependent variables
-
Market income, income distribution before taxes and benedits
Disposable income, income distribution after distribution
Fiscal redistribution, (1-2)/1
4) wealth inequality; also very important, has gone up in the last 200 years, book by Thoas
Piketty
-
the dependent variable is important for the theoretical explanations
…
EG: effect on globalization
Globalization, lower demand for low skilled workers so a lower wage, higher demand for
high skilled so a higher wage
But after the redistribution, higher expenditures mean more income equality???? (not
sure)
Before – after
Different causality
Lorenz curve (rela between percentage household and percentage of income) and gini
ratio
-
perfect equality: 20% households receive 20% of total income
But the actual is different (Lorentz)
Gini ratio, measurenment
After taxes and benefits, curve comes closer to ‘perfect’
Level of income inequality
Between sectors  in some sectors there is more inequality, makes sense
according to globalization, some sectors have larger changes and therefore larger
changes in equality
o Interesting!!
As a result of financial crisis, income inequality gone up
In some countries, this was not the case! In NL the inequality went down, why????
Only in the first years because of… but after the first years, the inequality did gone up
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Explanations for income inequality
-
Differences in ability
Education and training
Preferences, determines the income
Discrimination
Inequality of wealth itself, because the revenues of wealth, is income
Explanations for increases
1) demographic developments, aging of population
2) labour market developments
3) changes in redistribution, lower spending on welfare state, less redistribution, that
itself has influence on the development
(2)
For increase in income inequality after redistribution…
For increases…
… Aftypen
Iversen, T. and A. Wren (1998) Equality, Employment, and Budgetary Restraint: The
Trilemma of the Service Economy opens in new window. World Politics 50(4): 507-546.
The article "Equality, Employment, and Budgetary Restraint: The Trilemma of the Service
Economy" by Iversen and Wren was published in World Politics in 1998. The article
explores the challenges faced by service economies in reconciling the competing demands
of equality, employment, and budgetary restraint.
The authors argue that service economies, which rely heavily on public sector
employment and social welfare programs, face a "trilemma" in trying to balance these
three goals. They note that efforts to promote equality through redistributive policies can
lead to increased public spending, which can in turn limit employment opportunities and
lead to budgetary constraints.
The authors examine this trilemma in the context of Sweden, Denmark, and the United
Kingdom, and find that each country has pursued different strategies for reconciling these
competing demands. They note that Sweden has focused on maintaining high levels of
equality and employment, even at the cost of budgetary restraint, while the UK has
prioritized budgetary restraint over equality and employment. Denmark has pursued a
middle path, seeking to balance these three goals through a combination of fiscal
discipline, active labor market policies, and targeted social welfare programs.
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Overall, the article provides a useful framework for understanding the challenges faced
by service economies in balancing the competing demands of equality, employment, and
budgetary restraint. The authors' analysis of the different strategies pursued by Sweden,
Denmark, and the UK highlights the complex trade-offs involved in trying to achieve these
goals and suggests that there may be no easy solutions to this trilemma.
Mahler, V.A. (2004) Economic Globalization: Domestic Politics, and Income Inequality in
the Developed Countries. opens in new window Comparative Political Studies 37(9):
1025-1053.
The article "Economic Globalization, Domestic Politics, and Income Inequality in the
Developed Countries" by Mahler was published in Comparative Political Studies in 2004.
The article explores the relationship between economic globalization, domestic politics,
and income inequality in developed countries.
The author argues that economic globalization has led to increased income inequality in
developed countries, but that domestic political factors play an important role in shaping
the impact of globalization on income distribution. Specifically, the author suggests that
the policies pursued by governments in response to globalization can either exacerbate
or mitigate the effects of globalization on income inequality.
The author examines this argument in the context of six developed countries: the United
States, Canada, Japan, Germany, France, and the United Kingdom. The author finds that
these countries have pursued different policy responses to globalization, with some
countries adopting more redistributive policies and others adopting more marketoriented policies.
The author concludes that while economic globalization has had a significant impact on
income inequality in developed countries, the effects of globalization on income
distribution are shaped by domestic political factors. The author suggests that
policymakers must take into account the domestic political context in designing policies
to address the challenges posed by globalization, and that there is no one-size-fits-all
solution to the problem of income inequality in the era of economic globalization.
In the service sector, fewer productivity gains because more labour intensive (EG
Beethoven muziek stuk, kost nu nog steeds evenveel muzikanten als 100 jaar geleden,
alleen de wages zijn hoger, eventueel sneller door vliegtuigen show in parijs daarna show
in berlijn maar de gains vallen dus mee) however, in the manifacturing sector or like the
hospital, the productivity gains are relatively low. Maybe due robots, there is some
increased productivity but not that much. Many people are working in sectors where
there is not much productivity gains, higher wages so more many people of working in
the services sector these days.
What strategies van governments adopt?
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Trillema
Weisstanner, D. (2021) Insiders under pressure: Flexibilization at the margin and wage
inequality. opens in new window Journal of Social Policy 50(4): 725-744.
The article "Insiders under pressure: Flexibilization at the margin and wage inequality"
by Weisstanner was published in the Journal of Social Policy in 2021. The article examines
the relationship between flexibilization of labor markets and wage inequality, with a focus
on the impact on "insiders" in the labor market who have greater job security and
bargaining power.
The author argues that the increasing use of non-standard forms of employment, such as
temporary contracts and part-time work, has created a "dual labor market" in which
insiders and outsiders face different levels of job security and wage bargaining power.
The author suggests that this flexibilization of labor markets has put pressure on insiders
to accept lower wages and less job security in order to remain competitive with outsiders
who are willing to accept lower wages in exchange for greater job opportunities.
The author examines this argument in the context of Switzerland, using data from the
Swiss Household Panel Survey. The author finds that the use of non-standard employment
has increased in Switzerland in recent years, particularly among women and younger
workers. The author also finds that insiders in the Swiss labor market have experienced
downward wage pressure, particularly in sectors that have seen increased use of nonstandard employment.
The author concludes that the flexibilization of labor markets has contributed to wage
inequality and put pressure on insiders to accept lower wages and less job security. The
author suggests that policymakers must address this issue by implementing policies that
promote greater job security and wage bargaining power for all workers, rather than
relying on the use of non-standard employment to create job opportunities.
Sample exam questions
You can expect questions on the tables, but it is always about the main finding. If you know
the main findings, then the tables should be logically following.
Marloes van Dijk – 3573443
What are the relevant things in the articles? What are the shortcomings? Good points for
arguments
5 questions with abcd
Marloes van Dijk – 3573443