Institutional Variation in Productivist Welfare Capitalism

Abstract

Challenging those who view welfare states in the developing world as either mostly identical or tremendously heterogeneous, some political economy scholars have recently discussed the possibility of systematic variation in welfare capitalism in less developed countries. Rudra (2007), for example, argues that the developing world has systematically evolved into two ideal types: the protective welfare state that emphasizes the government’s role in the “decommodification” of social welfare, and the productive welfare state that aims to integrate labor productivity into social policy. Interestingly, the result of the analysis identifies all of the observed East Asian countries as productive welfare states. Indeed, East Asian countries share some intriguing characteristics distinctive from most Western European and North American states, where the provision of social welfare has long been assumed as being one of the most important policy tasks. The newly industrialized economies (NIEs) in East Asia have invested heavily in human capital formation such as education and job training, with a focus on the “productive” function of social policy, while being less committed to the provision of “protective” programs such as pensions, health care, and income supports (Haggard and Kaufman 2008). More interestingly, East Asian NIEs have achieved impressive policy outcomes in many important areas, including infant mortality, life expectancy, and literacy rates, even without substantial increases in taxation and spending on welfare.