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

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

Date Written: April 19, 2006


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

Lund University - Department of Economics ( email )

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

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