Duane Swank

Department of Political Science

Marquette University

Forthcoming in In Linda Weiss, ed., States and Global Markets:

Bringing Domestic Institutions Back In. Cambridge, UK: Cambridge

University Press, Cambridge Studies in International Relations.

Globalization theory suggests that internationalization places substantial pressure on policy makers in the developed democracies to retrench the welfare state. In this paper, I advance an alternative view. I summarize and extend my recent work that argues institutional features of the polity and programmatic structures of welfare states influence the relative capacity of pro-welfare state interests to defend the welfare state. I extend these arguments here by exploring how the broader "production regimes" of coordinated and uncoordinated market economies are related to, and reinforce the political consequences of, national political and welfare state institutions. My central argument is that while social policy makers have cut costs and restructured programs everywhere, globalization has not led to substantial welfare state retrenchment in coordinated market economies; coordinated market institutions shape the interests, strategic choices, and capacities of labor, capital, and the state in ways favorable to maintenance of social protection. Alternatively, globalization has contributed to welfare state retrenchment in uncoordinated market economies. Qualitative case analysis of globalization, institutions, and policy change in Britain, Germany, and Sweden and quantitative analyses of 1980-to-1995 data from 15 developed democracies strongly support the central arguments.