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Many existing East Asian welfare studies claim that, unlike advanced capitalist societies where social welfare generally embodies the successes of social democratic politics, East Asia’s social policy is strictly subordinate to the overriding policy objective of economic growth. They label this pattern as “productivist welfare capitalism” (PWC), viewing East Asian welfare states as a largely homogeneous productivist community. While acknowledging the basic features of PWC, this dissertation raises two puzzles. The first question is whether productivist welfare states are really homogenous and converging institutionally. This study argues that, despite their longstanding state-led development strategies, East Asian capitalist states have developed markedly different sub-types of PWC. Focusing on the institutional formats, I categorize PWC into three types—(i) inclusive productivist welfare (IPW), (ii) market productivist welfare (MPW), and (iii) dualist productivist welfare (DPW). Unlike the current single-lensed productivist welfare thesis, this study asserts that, while some productiviest welfares states have developed social insurance-based schemes focusing on the “risk-pooling” principle (IPW), some others have expanded individual savings-based schemes emphasizing the “self-help” principle (MPW). Also, another group has pursued these two patterns simultaneously, revealing a dualist form (DPW). I conduct cluster analysis to test this presumed variation in PWC. The second question is why the institutional divergence has taken place and becomes increasingly apparent. Why do some productivist welfare states enter the pathway to IPW while some others choose the direction of MPW? First, this dissertation contends that economic openness (free trade and liberalized financial markets) promotes MPW because savings-based social security is fit to the realization of the “self-reliance” principle. By contrast, IPW is more significant in less open economies where the government plays a major role in the market by controlling firms and banks and protecting skilled workers through privileged risk-pooling insurance schemes. The second argument is that democratic transition and electoral competition are positively associated with the expansion of IPW policies such as national pension and health insurance schemes. To test these arguments, this study has performed cross-sectional time-series analysis on data of eleven East Asian states and then three case studies including Korea’s IPW, Singapore’s MPW, and China’s DPW.

In 1978, China started its economic reforms, and the main characteristic of Chinese economic reforms is fiscal decentralization. This means that the central government wanted local governments to develop the local economies with their fiscal autonomy. By and large, this strategy was successful. However, it also brought many structural problems such as the increase of government deficits and instability of macroeconomic policy. As a result, the central government was increasingly concerned with the potential political and economic consequences of its weakening fiscal power. The ceter finally introduced a new fiscal reform program (the tax-sharing system) in 1994. The main objective of this reform was to reverse the declining two ratios - the ratio of government revenue to GDP and the ratio of center's revenue to total government revenue. Under this background, this study situates the 1994 tax-sharing reform program in its historical context, outlines the salient features, and discusses some of its major problems and political implications. The main research questions of this study are the following three issues: (i) `Has there been a real fiscal decline in terms of international accounting standard as well as the Chinese definition?' This study shows that there has been a real decline in both accounting practices and the main contributor to this decline is the poor performance of stat-owned enterprises. However, the decline is true just within Chinese official statistical reports. In other words, unofficial fiscal activities at local levels are increasingly expanded in China as a reaction to the center's effort to recentralize the fiscal power. (ii) `To what extent has the 1994 tax-sharing reform overcome the institutional drawbacks of the old system?' This study gives a negative answer to this question, because the 1994 reform includes some fatal structural problems such as tax rebate scheme, and consequently, it makes regional disparities worse than before. (iii) `What are the effects of the 1994 fiscal reform?' The tax-sharing system has given rise to enlarge non-budgetary funds by illegal ways at both levels. The conclusion of this study is that the structural problems occurred in transition to a market economy are more important in fiscal relations in China than budgetary decline itself. This also means that it is problematic to draw direct links between China's budgetary trends and the decline of the state power many scholars have pointed to the decline in central revenue as a primary cause of the reduction in central state capacity.