Globalisation and Social Welfare

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Using examples, discuss the assertion that globalization is a threat to social welfare. Social welfare is the well-being of the entire society. is more concerned with the quality of life that includes factors such as the quality of the environment (air, soil, water), level of crime, extent of drug abuse, availability of essential social services, as well as religious and spiritual aspects of life. Globalization is said to be the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Globalization has generated indebtedness that has undermined the capacity of governments to secure education, health and social protection. It has threatened social and labor standards, segmented social policy within countries and created zones excluded from any of the benefits of globalization. It has negative effects on the social structure, increases dependency on developed, threat to workforce countries Globalization is the cause of welfare state decline. The basic premise of the efficiency hypothesis is that the instrumental capacity of the nation-state is decisively undermined by the globalization of core economic activities. According to Brady et al. (2005), the globalization of production and investment necessitates welfare state retrenchment, since states lose autonomy over social welfare policies in the face of the overwhelming global economy. Moreover, under the neo-liberal economic paradigm of globalization, big government is regarded as inefficient in the globalised economic environment, since high levels of taxes and social spending impede developing an internationally competitive economy .Therefore, as national economic schemes open to the international market, governments are forced to adapt to the imperatives of global competition with an austere fiscal policy, which induces the cutting of cost-intensive social welfare programmers’ (Genschel, 2004). Therefore one can point out that several studies link globalization and welfare state reduction. For example, Garrett and) Mitchell (2001and Burgoon (2001) demonstrated that openness in economic exchange is associated with less governmental social spending. Globalization, in its most recent form, has been limiting the capacity of states to determine their own policy outcomes in three main ways: through trade and economic integration; financial markets; and the competition for employment. Due to the increasing pressure of international competition in trade markets as well as the increased mobility of capital and multi-national corporations, states are incentivized to cut labor costs, to reduce the price of goods and services, reduce taxation to make their domestic market more competitive, and to decrease the size and scope of the welfare state. Globalization only serves the interests of countries in the developed world such as United States, Europe, Australia and Canada among others. ln other words it creates inequalities. Developing countries are normally left out of major decisions on globalization even in cases where they are directly involved. According to IMF (2000, p. 6), globalization serves to amplify the level of inequality between nations. As far as opponents are concerned, developed countries have a larger stake in influencing the world economy to an extent that they influence the economic and social policies in developing countries. Multi-national Corporations have not made the situation any better in developing countries. According to Robert and Lajtha (2002, p. 186), multinational companies take advantage of the cheap labor that can be obtained from developing countries’ citizens. These companies normally provide poor working conditions and do little to upgrade the knowledge of their workers. Consequently, the workers are not in a position to improve their social welfare. This can be evidenced by the situation in Ivory Coast it is true that inequality has been on the rise due to...
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