The Dynamics of Welfare State Expansion

Abstract

This is the second of three chapters on the sources of pressure on contemporary national welfare states, all of which seek to show how examining the sources of strain carries implications for identifying who is likely to fight with whom over what; the authors of the three chapters are not of one mind on this issue. Iversen's analysis seeks to show that de‐industrialization—caused by the dramatic increases in productivity in the manufacturing sector rather than by globalization—is the crucial motor of social change. He directly challenges a variant of the globalization thesis that has been popular among scholars: the idea that exposure to the heightened labour market risks of an open economy fuelled the expansion of the welfare state as a form of compensation. Instead, he marshals considerable evidence for the view that it is the shrinkage of the manufacturing sector, and not economic (trade) openness, that fuelled the growth of compensatory social policy. He finds little evidence in favour of the view that the various dimensions of globalization constitute a source of real threat to the contemporary welfare state.