Welfare States in Developing Countries: University of Pittsburgh Unique or Universal? Nita Rudra University of Pittsburgh

Research question Do developing countries maintain distribution regimes that fall into distinct systematic patterns?

Argument in brief Two main types of LDC welfare states: “systematic divergence” Productive welfare state Protective welfare state (Weak) dual welfare state Broader implications: Early Comparative Political Economy (CPE) view of political economy of LDCs: extreme divergence Challenge International Political Economy (IPE) view of political economy of LDCs: convergence

1. Current views of LDC political economy – theoretical context Extreme Divergence (CPE ) “the tendency of societies to grow more alike, to develop similarities in structures, processes and performances” (Kerr 1983) Leveling forces of industrialization require a particular arrangement of social and economic forces. Existence of welfare states is by-products of industrialization Convergence: (IPE) All nations will ‘converge’ challenges of growth in a globalizing economy ensure significant similarities between the political economies of the many LDCs Political economies will converge at the lowest common denominator.

2. Why are LDCs likely to have welfare states (vs CPE)? Demonstration effect Social reactions to the market Some strong labor groups Democracy

2. What is the defining characteristic of LDC welfare states? Capacity to commodify LDCs are most concerned about absence of proletarianism E.g., capital depends on commodifying welfare state Differences (vs IPE) Emphasis on commodification will vary Politically more difficult to achieve Precedence set by OECD countries

Protective welfare regime 2. The Typology Protective welfare regime Productive welfare regime Distrust of international markets. Encourage international market participation. Renders governments with greater control and discretion over economy. Governments must sacrifice some control and discretion over economy. Favor social insurance-type policies that provide direct and immediate benefits to labor. Favor social policies that serve the interests of K and L: investment in human capital.

2. Comparing Welfare Regimes in Developed & LDCs OECD Welfare Regimes Decommodification HIGH Social Democratic Pre-commodification Commodification (successful) Decommodification MEDIUM Conservative Decommodification LOW Liberal LDC Welfare Regimes Commodification HIGH Productive Pre-commodification Decommodification LOW Commodification LOW Protective Decommodification HIGH

3. Cluster Analysis is used to identify groups A quantitative classification technique Finds similarities between units Hierarchical agglomerative linkage method Answers three questions: Are there groupings in the data? Are they driven by region, income level, etc? Do they confirm convergence, divergence of systematic divergence hypothesis?

3. Analysis Results

4. Implications…and ‘so what’ Welfare state is not necessarily a by-product of post-industrial development. LDC welfare states are unique and universal. LDCs are not converging. Sets stage for future research in IPE More data and exploration More rigorous test of international market effects Policy-oriented research