Social Democracy and Globalization in the Tropics.

Has globalization killed social democracy in the developing world? The social democracies of Europe built their modern socio-economic systems by forging connections to both capital and labor; social policy became an important compensation for the instability that accompanied a competitive economy. In contrast, the autonomous East Asian developmental state was built on a system that connected capital to the state, but not labor. Minimalist social policies served the system, by producing healthy and educated workers, who relied primarily on families for their social insurance. Today’s dominant development ideology contends that developing countries cannot afford to have comprehensive social welfare states if they hope to maintain competitive economies. This paper (part of a larger book project) addresses these issues. It uses an original database on partisan politics in the developing world to construct a model of a social democratic political economy, and then compares the globalization performance of social democratic political economies to other groups of political economies, using panel data. The results suggest that most developing countries have had a decline in social welfare spending, but that the social democracies have been able to continue to deliver social benefits, while also delivering growth, and macroeconomic stability. Social democracy in the tropics appears to provide a viable model for development. [ABSTRACT FROM AUTHOR]