Explaining Welfare State Survival: The Role of Economic Freedom and Globalization

23 Pages Posted: 27 Apr 2006

See all articles by Andreas Bergh

Andreas Bergh

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Date Written: April 19, 2006

Abstract

Using the economic freedom index and the newly developed KOF-index of globalization, it is shown that the Scandinavian welfare states have experienced faster, bigger and more consistent increases in these areas, compared to the smaller Central-European and the Anglo-Saxon welfare states. The market economy and globalization hence do not pose threats to these welfare states, but are instead neglected factors in explaining their survival and good economic performance. Big government decreases the economic freedom index by definition, but the welfare states compensate in other areas, such as legal structure and secure property rights.

Keywords: state, growth, property rights, globalization, taxation

JEL Classification: H11, P48, F02

Suggested Citation

Bergh, Andreas, Explaining Welfare State Survival: The Role of Economic Freedom and Globalization (April 19, 2006). Available at SSRN: https://ssrn.com/abstract=897746 or http://dx.doi.org/10.2139/ssrn.897746

Andreas Bergh (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34 2nd floor
Stockholm, SE-102 15
Sweden
0707790734 (Phone)

HOME PAGE: http://www.ifn.se/web/AndreasB

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07
Lund
Sweden

HOME PAGE: http://www.nek.lu.se/

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