Ratio Working Papers
No 101:
Explaining Welfare State Survival: The Role of Economic Freedom and Globalization
Andreas Bergh ()
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 European and the so called liberal
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: Welfare state; growth; property rights; globalization; taxation; economic freedom; (follow links to similar papers)
JEL-Codes: F02; H11; P48; (follow links to similar papers)
23 pages, June 2, 2006
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