Is globalisation undermining the welfare state?

This paper analyses the evolution of the welfare states in the majority of OECD countries during the pre-globalisation (1946–80) and globalisation (1980–2000) periods. Our purpose is to find out whether globalisation has produced a convergence towards a smaller welfare state, funded increasingly by non-mobile factors such as labour, property and consumption rather than by mobile factors such as capital. The data presented here challenge the claims about such a convergence, showing that social public expenditures and public employment have continued to expand during the globalisation period in most OECD countries. We also show that the welfare states remain rooted in the political traditions that have governed them.