| This dissertation assesses the impact of economic globalization on welfare states in less developed countries (LDCs). Using panel data for 53 LDCs from 1972--1995, it is revealed that trade and capital flows adversely affect LDC government social spending. I argue that the collective action problems of labor, caused by a large population of unskilled and surplus laborers, offset their potential political gains from globalization. My findings show that if a nation has a comparative advantage in unskilled labor, then globalization will lead to a decline in welfare expenditures. In order to gather further support for my hypothesis, I explore the cases of India, Brazil and Korea in greater detail. These findings provide sufficient justification for scholars to reassess their recent claim that welfare states have been resilient to the pressures of globalization. |
