Will integration undermine the ability of nations to set social standards exceeding those of their trading partners? The fear that globalization, in the name of safeguarding national competitiveness, will trigger a race to the bottom with convergence to the lowest standards has been one of the key arguments brought forth against further international integration, and in favor of regional or global minimum standards. While a race to the bottom is widely assumed to be an all but avoidable side effect of globalization, it has been noted as well that social safety nets may also convey comparative advantages in the form of political and social stability, as well as, longer-term, better education and public health.
While intra-national welfare competition has been actively studied, the body of cross-culture empirical work systematically examining the link between integration and the dispersion of social or environmental standards is still in its early phase. The proposed research will examine the link both for a broader group of twenty-nine countries and for one particular case, the jump increase in integration between the members of the European Union in the early 1990s under the single market initiative. The broader group comprises countries on quite different development levels including emerging, transition and mature economies; allowing as assessment of the overall trend towards equalization of social spending patterns. The case study of EU integration allows a closer look at a particular instance in which barriers were removed in a single step, leading to a significant jump increase in integration.
Holger Wolf (PI), Associate Professor, Center for German and European Studies, SFS, Georgetown University
Globalization and the Convergence of Social Expenditure in the European Union
Occasional Paper, CSGOP-02-02