The State of the South: Globalisation, economic policies and social
protection in Asia, Africa and Latin America1
SoS
Principal Investigator: Stein Sundstøl Eriksen
Host Institution: University of Agder
Proposal full title: The state of the south: globalisation, economic policies and social protection
in Asia, Africa and Latin America
Proposal short name: SoS
Proposal duration in months: 60
Aspects Relating to the Research Project
This is a comparative study of changes in the form of statehood in twelve middle-income
countries in the Global South: Argentina, Brazil, Chile, Costa Rica, India, Indonesia, Sri
Lanka, Philippines, Ghana, South Africa and Zambia. The overarching question to be
addressed is this: Is there an overall trend towards convergence towards a single form of
statehood in these countries? Its primary objective is to analyse the evolution of state forms in
twelve countries in Asia, Africa and Latin America in the period from the 1970s until today,
focusing on the states’ economic and social policies. To reach this objective, it will:
1. Analyse the evolution of the countries' economic and social policies to identify patterns of
both continuity and change.
2. Analyse policies as the outcome of international pressures and domestic processes.
3. Assess states' policy space in the context of increasing globalization
In terms of economic policy, the project will focus on a) financial policy (system of regulation,
degree of state ownership of financial institutions); b) industrial policy (state ownership,
licensing, tax system) and c) trade policies (tariffs, export support). In the field of social
policy we will focus on: a) cash transfers (direct or conditional); b) social insurance (pensions,
unemployment benefits, public works) and c) social services (health, sanitation etc).
Our hypothesis is that there a trend – not towards a pure neoliberal model, but rather
towards what can be called an “embedded neoliberal state” – a state with broadly marketoriented economic policies combined with a active state regulation, and a low level of social
protection (Kurtz and Brooks, 2008). Such a state would deregulate the domestic market
(including the labour market), reduce trade barriers, privatize state-owned enterprises and
deregulate financial and monetary policies. At the same time, it can maintain other forms of
state support to industry, such as export promotion, technology development and
infrastructure development. It could also have a social safety net, both to compensate for
reduced job security and to maintain social stability and reduce levels of absolute poverty.
However, safety nets would tend to be at a low level, often with fairly strict forms of meanstesting. Hence, an embedded neoliberal state is not anti-statist (Harvey 2005, Kurtz & Brooks
2008, Mann, 1997). States remain powerful, and maintain key roles in steering the economy,
but the forms of regulation and the interests represented by states change, as well as the
central actors defining policy (Centeno and Cohen, 2012). Thus, “embedded neoliberalism”
refers to a more state-centric development model that is at the same time continuous with the
economic openness that characterizes most of the global South.
1
This is a revised version of an application submitted to the European Research Council in 2014, where it
reached the final round but was not funded.
1
Rather than assuming that the eventual outcome will be identical forms of statehood,
we assume that, overall, there is a tendency that the direction of change is towards an
“embedded neoliberal” state model. However, such a state can take a variety of institutional
forms, and there is likely to be substantial variation between states, both in the form and in the
degree of change in this direction.
The starting point is that all states have to promote economic growth while at the same
time sustaining state legitimacy and social stability. While economic policy is crucial for the
promotion of both growth and legitimacy, social policies are especially important for
sustaining state legitimacy and social stability.
It is expected that the trends towards convergence will be stronger in economic policy
than in social policy, because there is more external pressure (from the world market and from
international organisations) towards economic liberalization than towards reform of social
policies. We also expect that countries that are more exposed to the global market would
liberalise their domestic economic policies more than countries that are less exposed.
In terms of social policy, it is expected that the form as well as the degree of safety
nets will vary more, as a result of domestic political conditions (class structure, pattern of
political mobilization) and institutional legacies (state capacity, organization of the public
sector, sources of revenue).
We assume that both economic and social policies must be analysed as the outcome of
international pressures as well as domestic processes. The project aims to identify these
sources of change, and to explain the form of statehood that emerges. A key issue will be to
analyse changes in policies in each country over time.
The aims of the project may be summarised in the following model:
Domestic politics
(informalisation,
class relations, forms
of mobilisation)
Globalisation
(economic and
political)
State policies
(economic and
social)
Building upon existing research on globalization, convergence/divergence, welfare provision
and the changing role of the state, the project will be innovative in several ways. First, it will
expand research on these issues to developing countries. Second, it will focus on how the
existence of a large informal sector affects trends towards convergence and the role of the
state. Third, it will go beyond research on welfare states and the varieties of capitalism by
analysing the inter-relationship between economic policies and social policies. And finally, by
focusing on the impact of globalization, it will combine research on globalization and the
state with an assessment of the relative importance of internal and external sources of change.
Background and status of knowledge
The aim of this project is to bring together perspectives from four different but interrelated
theoretical debates. First, in the debate about globalisation, a key issue is whether increased
economic globalization is leading to a convergence between states. Economic globalisation
has led to growing interdependence in at least three ways. Increased international trade has
made each state more dependent on global markets. Moreover, production, management and
finance have become more globally integrated. Finally, the liberalisation and expansion of
finance has made capital more mobile than ever before. It is frequently claimed that these
changes have led to a convergence of policies in the direction of macroeconomic policies with
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a reduced economic role for the state (Grahl, 2001; Ohmae, 1995; Robinson, 2004). To
promote economic competitiveness, all states are compelled to deregulate their economies by
a) liberalizing trade b) opening up markets for foreign investment; c) privatize state-owned
companies; d) liberalize financial markets; e) strengthen property rights and f) reduce levels
of taxation. As a result, it is argued, there is a tendency towards convergence around a (neo-)
liberal model of economic policy. In addition to, international market processes, convergence
may also be a result of international political relations. Thus, states and organizations – the
US, IMF, the World Bank, WTO and EU - sanction countries deemed too “interventionist”, or
with poor macro-economic balances (Gowan, 1999; Wade, 2003). The result is that states
have become more dependent on international fluctuations, and the power of international
actors to sanction government policies appears to have increased.
Second, there is a large literature that emphasizes the continuing varieties of
institutional configurations and policy regimes (varieties of capitalism, hereafter VoC)
(Berger and Dore (eds.) 1996; Hall and Soskice (eds.) 2001; Kitschelt, Lange, Marks and
Stephens, (eds.) 1999. These studies have challenged the idea that globalisation has resulted
in convergence towards a single liberal capitalist model. Instead, they argue that because
institutional structure varies between countries, the responses to the common pressures
emanating from globalisation also vary (Streeck, 2009). The mechanisms are often not linear,
and the effects of a given regulatory of institutional change may differ. Thus, while
international pressure is important for explaining policy changes, there are also domestic
sources of both continuity and change. In a key contribution, Hall and Soskice’s Varieties of
Capitalism (2001), the main focus is on firms and their relations with their environment. They
identify five dimensions: the financial system, firm structure, education, industrial relations,
and inter-firm relations. Coordination, it is argued, takes two main forms. In liberal
economies (LMEs), the market coordinates interactions, while in coordinated market
economies (CMEs) actors engage in non-market coordination (Hall and Soskice, 2001).
Third, there is an important literature on welfare- and social policies (Esping-Andersen,
1990, Huber and Stephens, 2010; Pierson, 2001), which compares welfare arrangements
across countries. Esping-Andersen identifies three types of welfare regimes in Western
countries: the liberal, the corporatist and the social-democratic (statist) regime type,
exemplified by the US, Germany and Scandinavia respectively. The liberal model is mainly
market-based and individualized, with only a marginal role for the state in welfare provision.
In the corporatist model, trade unions and employers associations are the central institutions
in the provision of welfare, and the state has a subsidiary role, while in the social-democratic
model, the state is the key institution, with main responsibility for welfare provision. Thus, a
key difference between the different models is the role of the state in welfare provision.
Both the globalisation literature, the VoC school and welfare state studies have
focused mainly on Western countries (Becker, 2014; Peck and Theodore, 2007; Streeck,
2012). Expanding these frameworks to include developing countries could provide evidence
of the diversity of contemporary capitalism and welfare systems, or, alternatively, of the
universality of trends towards convergence. Further, linking these debates to analyses of
developmental states could indicate whether or how the role of the state is changing outside
the western world. However, such an expansion would require a revision of the conceptual
framework of the VoC school. Two questions arise in this context. First, the role of the state
would have to be addressed. While the arguments for convergence imply that the state is
becoming less relevant, the state remains outside the core of the analytical framework of the
VoC school. In non-western countries, however, it seems clear that the state has had a crucial
role. This brings us to the fourth debate we will relate to, namely that about developmental
states. Many authors have documented the different ways in which states have had a crucial
role in the economy, regulating and intervening in the market (Chibber, 2003); Evans, 1996;
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Kohli 2005; Wade, 1990). This, it is argued, have been essential preconditions for the
economic success of late developers such as South Korea and Taiwan.
Another issue is a structural feature of developing economies that separates them from
advanced capitalist countries. In developing countries, a huge part of economic activity takes
place outside the formal sector, either in agriculture (which by and large is excluded from the
modern sector as defined by the state) or in informal activities outside of agriculture
(Mazumdar, 2014; Sanyal, 2007). This has important implications. The existence of a large
informal sector means that state policies, including liberalisation, have less impact on
people’s living conditions. This means that there is likely to be less pressure to compensate
for the effects of liberalisation with expanded social policies. However, if there is a high
degree of political mobilisation and high levels of expectation towards the state, there may be
such pressure even in countries with a large informal sector.
The existence of a large informal sector also affects relations between state and society.
Among other things, it affects the supply of labour, driving down labour costs and weakening
labour’s position in relation to employers. This also has implications for the state. Taxing,
regulating and governing the informal sector is difficult for the state, and formal sector firms
can use the informal sector to sub-contract parts of the production process. And because of its
inter-dependence with the informal sector, governance of the formal sector also becomes
more difficult. Moreover, those working in the informal sector are less likely to be affected by
state policies and less dependent on the state for social protection, relying more on familybased forms of social protection.
The project can illuminate all these debates. In relation to the VoC debate, a study of
the evolution of economic and social policies can be used to explain the form and degree of
institutional variation between countries. Regarding globalisation, it will assess whether and
to what extent global pressures towards convergence emanating from world market
competition or global institutions such as the WTO and TRIPS have led to a liberalisation of
economic policies, and thereby to a convergence towards a liberal, market-oriented form of
rule. In terms of welfare and social policies, it will assess the role of the state in relation to
that of market-based systems and informal, family-based forms of social protection. Finally,
the project can contribute to the debates about the role of the state in promoting economic and
social development and the viability and relevance of the idea of the developmental state in
contemporary globalized capitalism.
Analytical framework
We see the state as constituted through its relations with its society and the external world.
The state should therefore be defined in relational terms. We define the state as follows:
1) A differentiated set of institutions;
2) Centralized power;
3) Territorial demarcation;
4) Authority to make binding decisions.
This definition applies to all modern states, including those whose practices may differ quite
widely from the formal rules that are supposed to govern their practices. From this definition,
it follows that states are necessarily related both to domestic society and to the outside world
and to other states (Giddens, 1985; Mann, 1993), and that they must adapt to constraints and
opportunities from both these directions (Eriksen, 2011). The nature of these constraints and
opportunities and how they are handled determine the character of the state and continuing
processes of state (trans-) formation. To understand modern states, it is necessary to analyse
empirically both how states are linked to their environment, and how they are separated from
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it. It follows that a key task is to identify how the specific character of the relations in which
states are embedded help structure the construction and maintenance of the boundary between
the state and its outside, both domestically and internationally.
Externally, different types of relations will be analysed: i) the form and degree of
integration into the world market; ii) patterns of political alliances/security threats; iii) legal
and institutional constraints (international law, aid dependence). We assume that the effect of
changing external conditions will vary, depending on the social basis of ruling regimes and on
the nature of a state’s external ties.
Internally, states represent society as a whole and claim to be acting on behalf of
citizens’ common interests. This idea, which Migdal describes as ‘the image of a coherent
controlling organization in a territory, which is a representation of the people bounded by that
territory’ (Migdal, 2001:15-16), presupposes that the state has a monopoly of violence,
control over its territory and ability to provide services. It also presupposes a separation
between state and society on the one hand and between the internal and the external on the
other, and a unity of ruler and ruled, where the actions of the state express the collective will
of ‘the people’. Thus, the state, whose actions are seen as identical to those of the people,
must also be separated from the people on whose behalf it acts.
Modern states closer linked to and have more responsibilities for the regulation of
society than any earlier states in history (Giddens, 1985; Mann, 1993). The state becomes
imbricated in virtually all social relations (Bourdieu, 1999). State institutions are established
at every level, making the state relevant for ordinary people’s lives in unprecedented ways. As
state power radiates “outwards”, political processes and social life in general radiate
“inwards”, towards the state, and societies become state-oriented. This is expressed by the
fact that a range of institutions become organised either directly by the state (bureaucracies,
schools, judiciaries, police, etc.), or on the basis of state boundaries (interest groups, media,
private firms). Thus, while the state is a set of institutions, which constitute one part of society
(the public sector), it is not a sphere on par with markets or civil society. Modern states are
unique in being both part and whole – both a sector separated from society and a set of
encompassing institutions, overarching other sectors with responsibility for society’s common
interests (Jessop, 1990).
Modern states are also based on a specific conception of how state and society should
be separated (Giddens, 1985; Weintraub, 1999). A private sphere separated from the state,
consisting of the economy, voluntary associations and immediate social relations, is
constituted and protected by the state, through the institutionalisation of a set of rights. State
authority is – paradoxically – dependent on a separation from, and integration with, society:
the separation of state and society can only work on the basis of a shared conception of what
public power is, which links state and society by legitimating the state as the “final arbiter of
social order and the public good.” (Munro 1996: 120).
The formal institutions of all modern states, whether strong or weak, liberal, socialliberal or social democratic, are based on these principles. Even if rules are not followed by
everybody all the time, or even most of the time, the existence of these formal rules and
institutions is likely to make a difference, both because some people actually follow them and
because even those who do not follow rules are likely to take existing rules into account in
making their choices. Policies must be legitimized by reference to them, and state leaders
must present themselves as standing above society, representing the common interests of
society as a whole. This fact – that states are compelled to simulate this form of statehood – is
just as important as the fact that their actual mode of operation contradicts the state idea that
they must pretend to emulate.
Both economic and social policies are related to the drawing of the boundary between
state and society. Thus, the policies and responsibilities of the state in these two areas shape
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the character of the state through shaping its relations with society. Economic liberalisation
entails expanding the scope of the market and restricting the scope of the state, limiting its
direct economic engagement and separating it more clearly from the private sphere of the
market. States moving in the direction towards a liberal model would reduce their direct
economic engagements (e.g. state owned enterprises, production licences and subsidies) and
expand the scope of market competition. Instead of restricting competition, they would
regulate the economy from ‘the outside’ through legislation and enforcement of competition
rules. This does not necessarily mean that the state becomes less important or less powerful.
Rather, it represents a change in the form of regulation, from regulation through limiting
market competition to promotion and regulation of market competition.
The establishment or expansion of social policy represents a change in the opposite
direction, expanding state responsibilities and thereby state institutions. Liberalizing states
may establish (or maintain, or reduce, depending on their starting point) social safety nets, to
ensure a minimum of protection for those who are unable to compete in the market.
All states with a market economy and a democratic political system are faced with two
structurally defined demands. On the one hand, they must promote capital accumulation and
economic growth. Since states mainly rely on taxation of the private sector to fund their
activities, accumulation in the market is the state’s main material precondition. Consequently,
the state’s ability to regulate the market depends on its access, through taxation, to material
resources generated in the market. States therefore have an interest in promoting economic
development: The more capital accumulation in the private sector, the stronger the material
basis of the state. Conversely, if the state intervenes in the market in ways that weaken growth
and accumulation, it may undermine its own material basis.
At the same time, all democratic states rely on a minimum of legitimacy. Governments
must win the support of citizens through elections, and to do this, they must convince voters
that what they do serves the interests of voters. While they may not need the active support or
positive endorsement of the majority, they at least need to limit active opposition and
mobilisation of/support for opposition groups. They must therefore always present their
policies as promoting the common interests of citizens.
As states adopt more liberal economic policies, there is a risk that some sectors of
society will be adversely affected. These sections are likely to oppose the policies of
liberalisation, and if they are large enough, the state will be forced to adjust its policies. This
is the logic underlying Polanyi’s idea of a double movement (Polanyi, 1957): Economic
liberalisation can lead to protests and political pressure for reforms which compensate those
who are adversely affected, either economically or through a disruption of their traditional
forms of life. While economic liberalisation does not always lead to a legitimacy crisis and a
‘double movement’ (as Polanyi could be interpreted as claiming), it may have this effect.
Expanding social safety nets is one important way (though not, of course, the only way) of
maintaining state legitimacy in the context of economic liberalisation. If people lose their
livelihood (jobs or access to land), there is a risk of social instability. Expanding social
protection – either from above as a pre-emptive strategy – or from below – as a result of
popular mobilisation – can then be a way of maintaining social stability and preserving
political legitimacy. However, in countries with a large informal sector, many sections of the
population are less affected by state policies, which could reduce the pressure for legitimation.
An alternative way to seek legitimacy, common in many developing countries, is
through patronage. Rather than by providing social services or increased income,
governments can secure support by distribution of spoils in exchange for political support
(Boone, 1994; Chabal and Daloz, 1999). Practices based on exchange of state-controlled
positions and resources for personal support can be used by regimes to promote the interests
of their clients. In such systems, there is no clear separation between the private and the
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public, or between the personal interests of officials and the interests of the institution they
belong to. However, these practices may generate legitimacy for the regime, even while
weakening state institutions and the ability to promote accumulation. Such practices may
therefore reduce the pressure to expand social policies to promote legitimation.
The two demands (accumulation and legitimacy) may at times be in tension. Thus,
policies that are effective in promoting growth may be unpopular, and popular policies may
undermine accumulation. This raises the question of how states deal with the potential tension
between the need for political legitimation (through distribution of benefits/services to groups
on whose support the government depends) and promotion of accumulation and growth
(through policies that promote growth)? Thus, there may be situations where the state is
dominated by one social group (e.g. corporate capital) and dependent on revenue raised by
taxing it, while at the same time being dependent on the political support of groups who do
not directly benefit from current policies. In such cases, the state is faced with a fundamental
dilemma: The policies that are seen as necessary for promoting growth could be politically
impossible to implement. In situations with increased political mobilization, considerations
related to the need to generate political support must to an increasing degree take the interests
of newly mobilized groups into account. In such cases, it is reasonable to assume that political
interests will prevail, even if this means that accumulation could suffer.
This project will analyse how the states have dealt with this dilemma in the context of
increased economic globalisation. Economic and social policies are particularly suited for
such a focus. Economic policies are the main way that states seeks to promote accumulation,
while both economic and social policies are central for the generation of state legitimacy.
Our key hypotheses can be summarised as follows:
1)
2)
3)
4)
5)
More globalisation leads to more liberalisation of economic policies
More economic liberalisation leads to more pressure for social protection
A large informal sector leads to less social protection
A high degree of mass political mobilisation leads to more social protection
Economic liberalisation does not lead to more social protection if there is a large informal
sector
6) If there is a high level of political mobilisation among the poor, economic liberalisation could
lead to more social protection even in countries with a large informal sector.
These factors are considered as conditional causal mechanisms. Hence, they may be offset by,
or dependent on, other factors, as exemplified in hypotheses 5 and 6.
Methodology
Criteria for case selection
The universe of countries from which the cases have been selected are middle-income
countries in the global south (Argentina, Brazil, Chile, Costa Rica and South Africa are upper
middle income countries and the rest lower middle income countries). Further, the project is
limited to countries with formally democratic political systems with regular competitive
elections.2 Hence, the 12 countries are not too different in terms of economic development
and political system. As middle-income countries, they are also likely to be significantly
affected by globalization. In these respects, the political-economic contexts in which
economic and social policies are formulated are similar in all 12 countries.
2
Within this universe, countries with large resource-rents, such as large oil producers (e.g. Angola, Kuwait)
have been excluded, as it is assumed that such countries’ political dynamics and state society relations are
largely determined by the existence of resource rents.
7
At the same time, there are important differences between them, which could help
explain how they have dealt with the challenges of promoting accumulation and legitimacy
and the variations in state form between them. In line with the project’s focus on the states’
relations with the external world on the one hand and domestic society on the other, the
following differences are of particular importance: First, among middle income countries,
Chile ranks as the most economically globalized, while India and Argentina are among the
least globalized, with the others located somewhere between.3 If economic globalization is a
source of convergence, one would then expect Chile to be significantly more affected than
India and Argentina, and the others to be somewhere in between. Second, the countries differ
significantly in terms of the extent of state regulation of the market.4 Chile ranks as seventh of
all countries in the world in terms of economic freedom, while India is ranked as no 128 and
Argentina as no 169. The other countries are somewhere in between. This partly reflects
differences in starting points, as India was more regulated than Chile when it started
liberalizing. In addition, it reflects differences in the pace of reforms.
Third, the countries differ in terms of the scale and form of expenditure on social
protection (social assistance (cash transfers, subsidies, workfare etc.) + social insurance
(pensions, unemployment benefits)). Argentina spends 12,8% of GDP on social protection,
while South Africa spends 12,4%. At the other extreme, Indonesia and India spend 2,3% and
4,1%. In terms of the distribution between social assistance and social insurance, India spends
roughly the same amount on both types of protection. By contrast, South Africa spends almost
ten times more on social assistance than on social insurance (Woolard and Leibbrandt, n.d.)
while Chile spends about ten times as much on social insurance as on social assistance
(Weigand and Grosh, 2008).5
Fourth, the size of the informal sector varies greatly between the countries. In India,
no less than 83,4% of the workforce is estimated to be employed in this sector. The
corresponding figures for Chile, which is at the other extreme, is 35,8.6 This could imply that
some types of social protection - those related to the workplace - are more difficult to
implement outside the relatively small formal sector. Consequently, one would expect to find
this type of protection to be more restricted in scope in India than in Chile. It could also imply
that the Indian population is less vulnerable for changes resulting from increased globalisation,
both because the informal sector tends to be oriented towards local markets and because the
informal sector (especially in agriculture) can be a source of social security. This would lead
one to expect less protest and mobilization for improved social protection in India.
Methodological approach
History, understood as pure narrative of events, is insufficient to grasp systemic change. On
the other hand, a historical approach is necessary in order to furnish us with a diachronic
perspective that is necessary in order to grasp how states and their relations with domestic
society and the external world evolve. This project’s chosen starting point in this regard is the
rich tradition of comparative historical sociology, known from the work of Perry Anderson,
Barrington Moore, Theda Skocpol and others. In keeping with this tradition, in-depth analysis
of relatively few cases allow us to establish general knowledge about different historical
circumstances, while at the same time being sensitive to historical particularities. The key
move is to use methods that are mostly used in studies of a small number of cases and tracing
of specific historical processes. We will undertake this kind of empirically grounded historical
comparative style of research (Mjøset and Clausen, 2007). The challenge of such research is
3
KOF Index of Globalization, http://globalization.kof.ethz.ch/
Heritage Foundation (2013) Index of Economic Freedom, http://www.heritage.org/index/
5
ILO (2010) World Social Security Report 2010/11: Providing Coverage in Times of Crisis and Beyond, ILO: Geneva.
6
OECD (2009) Is Informal Normal? Towards More and Better Jobs in Developing Countries', OECD, 2009,
http://www.oecd.org/dev/povertyreductionandsocialdevelopment/42863997.pdf
4
8
to balance on the edge between detailed historical narratives and overly abstract theories and
philosophies of history. In order to explain patterns, a key issue is to analyse sequences and
trends over time, for instance to find out whether increases in social spending occurred before
or after economic liberalisation.
We will supplement and expand on this broad macro-historical comparative
methodology in two crucial ways. First, comparative historical sociology, while sensitive to
the importance of international factors, retains a tendency to consider such influences as
external shocks. Our starting point is that a state’s relations with its “outside” (other states,
societies and organisations) are crucial, and that the international dimension must be
incorporated into studies of domestic state-society relations and vice versa. Thus, our aim is
not to “test” whether internal or external factors are most important for explaining policy
changes. Rather, we take it for granted that actual policy change is the result of both internal
and external factors, and seek to identify how factors at both levels have contributed to
producing the policy outcome observed in the three countries.
Second, rather than seeking to identify the separate effects of different variables, we
will analyse cases as totalities, or configurations (Ragin, 1992). That is: In order to be
meaningfully compared, cases must be made comparable by a conceptual process which
identifies them, both as a “case” of something, and as “similar” or “different”. Thus, in
comparisons between cases, the researcher's theoretical framework serves as the reference
point of the comparison. In the process of making comparisons, both the interpretation of that
which is being assessed (the cases) and that which serves as the yardstick of the assessment
(the model) continuously change. In such analyses, focus is on how each part is related to
other parts and to the whole. Any given factor may have different effects, depending on
context and on how it is related to other factors, and the outcome is explained by the specific
combination of different factors.
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Assessing convergence
The overall research design is basically a comparative case study approach. In order to assess
the degree of convergence, it is necessary to compare the states’ economic and social policies
with each other and to assess changes over time in each of them. To enable comparisons of
policies, we will apply a common framework and set of questions for the cases, seeking to
trace and analyse what the states have done and do in the areas of economic and social policy.
In the field of economic policy, we will focus on areas such as
state ownership of production assets/degrees of privatization over time,
trade policies (degrees of protectionism, export promotion)
regulation regime (licencing rules, quotas, openness to FDI, competition rules)
finance regulation (banking regulations, state ownership of banks, policies towards foreign
banks)
the tax system (rates and coverage, distribution of revenue between income tax, corporate tax,
property tax, custom fees, sales tax).
A liberalizing state would reduce state ownership, deregulate trade, abolish quotas and
licences, deregulate finance and reduce overall levels of taxation. It would also change the
form of taxation, from tax on personal income and corporations to sales and property tax. We
would therefore expect to see changes in these directions over time in all the countries.
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In social policy, we will study government policies in the areas of
pensions (public system coverage, expenditure)
food subsidies (degree and coverage, distribution system)
conditional and unconditional cash transfers (form, coverage, level, type of conditions, if any).
9
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Expenditure on social services, such as health and sanitation
Here, we would expect an expansion of pension systems and possibly cash transfers, as
political considerations would lead to a need for expanded social safety nets. We would also
expect a reduction in market-distorting forms of social protection, such as food subsidies.
Alternatively, in countries with a large informal sector where patrimonialism is prevalent,
governments could seek legitimacy through distribution of spoils rather than social protection.
This would create less need for social policies in a context of economic liberalisation.
For both economic policy and social policy, we will identify and assess pressure
emanating from outside the countries (the world market, WTO, multilateral and bilateral
pressure) as well as domestic sources of reforms (shifting distribution of power between
groups and classes, ideological trends). We will analyse the degree to which reforms are the
result of political pressure applied by specific groups (capitalists, finance, experts, social
movements, political parties), as well as outcomes and consequences of reforms for state
efficiency and legitimacy. Included here will be analyses of ideas and arguments that are used
to justify policies and reforms. The findings from such an analysis will enable us to identify
differences and similarities between the countries and changes over time in each of them.
The project will have two main parts. Part 1 will analyse economic and social policies
in all the twelve countries, while in part 2, four countries will be studied in more depth. The
project group will start with developing the theoretical framework and methodology. On this
basis, it will engage in the two-step case studies (comparisons of all 12 countries and in-depth
study of the four selected countries). The final year will be devoted to a comparative study of
the findings from the previous four years.
While the research team will share the basic overall theoretical framework, individual
team members will draw on various data sources and methods. Both qualitative and
quantitative methods will be applied.
For the first part, we will use a number of global data sets (including globalization
indices, economic freedom indicators, governance indicators and data on trade, economic
growth, distribution, political participation, safety nets etc.). A number of such data sets exist,
published by agencies such as the UN, the World Bank, ILO, OECD and academic
institutions. In addition, we will analyse official policy documents and government statistics.
To analyse findings in this part, we will use Qualitative Comparative Analysis with
fuzzy sets (FSQCA), as developed by Charles Ragin (2000). This method is specifically
designed for comparisons of 5-20 cases, where each case is viewed as a totality.
A preliminary fuzzy set table summarizing the twelve countries’ properties on the
relevant dimensions, drawing on the indices referred to above, is seen here.7 8
Country
India
Philippines
Indonesia
Ec . glob
0,2
0,4
0,4
Informal
0,8
0,8
0,8
Mobilisation
0,4
0,4
0,6
Ec. Lib.
0,4
0,6
0,4
Soc. Pol.
0,4
0,2
0,2
7
The table is based on the indices referred to in footnotes 3-6. These are aggregate indices, composed of a number of
indicators. In the project, they will be disaggregated, and the various elements will be analysed in country context for each
case. The index for social policies only includes economic transfers, and does not include expenditure on social services,
such as health, education, sanitation etc. For mobilisation, the classification is based on http://www.idea.int/elections which
only includes electoral participation, and not other kinds of political mobilisation, such as lobbying, interest group
participation and demonstrations. These indices will be used as a starting point, and the different issues will be further
disaggregated and analysed in the project, based on other sources. Political globalisation and patrimonialism are not included
in the table, because I consider the indicators available for these factors problematic. These will be analysed in the project,
based on qualitative data.
8
The table is based on a six-value fuzzy set, where 1 = full score; 0,8 = high; 0,6 = quite high; 0,4 = quite low; 0,2 = low and
0 = total absence.
10
Sri Lanka
Kenya
Zambia
SA
Ghana
Brazil
Chile
Argentina
Costa Rica
0,2
0,2
0,6
0,6
0,4
0,4
0,8
0,2
0,6
0,8
0,8
0,8
0,4
0,8
0,6
0,2
0,6
0,6
0,4
0,8
0,2
0,6
0,8
0,8
0,2
0,6
0,4
0,4
0,4
0,4
0,6
0,6
0,4
0,8
0,2
0,6
0,6
0,6
0,4
0,8
0,2
0,8
0,6
0,8
0,6
We see that based on these indicators, there is no sign of convergence in the area of social
policy. In terms of economic liberalisation, however, all countries except Chile and Argentina
are in the middle range. This indicates a trend towards convergence in economic policy.
We also see that of the four countries with the highest degree of economic
globalisation (Chile, Zambia, Costa Rica and South Africa) all except Zambia also have a
high degree of economic liberalisation. Conversely, countries with a low degree of
liberalisation (India, Indonesia, Sri Lanka, Kenya and Brazil) also have a low degree of
economic globalisation. Again, Zambia is an exception. At the same time, there are two
countries (Ghana and the Philippines) that have a high degree of economic liberalisation
without much economic globalisation. This indicates that while economic globalisation is
related to liberalisation, liberalisation may be caused by other factors as well.
The table also shows that countries with a high degree of liberalisation vary greatly in
expenditure on social policies. Thus, South Africa, Ghana and the Philippines have the same
degree of economic liberalisation, but represent different extremes in terms of social sector
expenditure. It is also striking that among countries with a very large informal sector (India,
Philippines, Indonesia, Sri Lanka, Kenya, Zambia and Ghana), all except Kenya have low
expenditure on social policy. In the cases of Ghana and the Philippines, this is so despite the
fact that they have a high degree of economic liberalisation. This indicates that the size of the
informal sector is an important factor for explaining variation in expenditure on social policy.
We also see that a high degree of electoral mobilisation does not appear to be related
to more expenditure on social policies, since the two countries with the highest degree of
mobilisation (Brazil and Ghana) represent opposite extremes in social policy expenditure. For
Brazil, the high expenditure on social policy even with low levels of economic liberalisation
could be related to the fact that Brazil has a high level of political mobilisation. Ghana,
however, also has a high level of mobilisation, and a high degree of economic liberalisation.
Possibly, its low level of social policy expenditure could be related to its large informal sector.
These possible causal relations and their combinations will be explored in detail in the
project. Using these preliminary tables as a starting point, the project will explore the
relevant policies in much greater depth, by analysing their evolution over time and by
decomposing economic and social policies in greater detail than what is done in these indices.
The second part will consist of in-depth study of four of the twelve cases, namely
Argentina, Chile, Ghana and India. This will enable us to trace the processes and sequences of
policy making and identify causal mechanisms. The four countries are selected on the basis of
their widely differing scores on key dimensions in the above table. Thus, Chile has a high
score on both liberalization and social policy; India has a low score on both dimensions.
Argentina represents an extreme case in terms of both liberalization (low) and expenditure on
social policies (high), while Ghana a high score on liberalization, together with a very low
score on social policy expenditure. Hence, these four countries represent all possible
combinations of high and low degrees of state regulation in economic and social policies.
In this part of the project, we will undertake more in-depth analysis of official
documents and archive material. Here, we will also use other sources, such as qualitative
11
interviews with policy makers, civil servants and representatives of interest groups. The main
aim of the interviews is to get a firmer grasp on policy-making processes, and on the
influence of different groups/actors on policy formulation. These will be semi-structured, indepth interviews that will be carefully prepared. To enable comparisons of policies, we will
apply a common framework and set of questions for the cases. This design provides good
possibilities for comparing and assessing the countries’ policies, and will enable us to identify
differences and similarities to make systematic comparisons. We will carry out case studies of
reforms in the selected countries and policy areas, focusing on the form, extent, variation and
sequence of reforms. In both fields, we will identify and assess pressure emanating from
outside the countries (the world market, WTO, multilateral and bilateral pressure) as well as
domestic sources of reforms (shifting distribution of power and patterns of political
mobilisation between groups and classes, ideological trends). We will analyse the degree to
which reforms are the result of political pressure applied by specific groups (capitalists,
finance, experts, social movements, political parties). Included here will be analyses of ideas
and arguments used to justify economic reforms. In addition to these various types of primary
sources, we will also seek information through secondary sources, including media reports
and scholarly research.
Early in the project period, the research group will work on developing a series of
standardized interview guides. The next step will be to use these standardized guides as a
point of departure for developing more tailor-made guides that take up more specific
questions in relation to specific institutions and/or countries. While the research team will
share the basic overall theoretical framework, the individual team members will draw on
various data sources and methods. By using different approaches, the project should enrich
our understanding of changes in the form of statehood in the context of changing international
and domestic conditions. A major point here is that the research team is to be interdisciplinary.
Main challenges and back-up plan
The main challenge of this project relates to methodology. First, official statistics are not
always fully reliable. They must therefore be used and interpreted with caution, and
supplemented with other sources, such as historical and journalistic accounts and interviews.
Moreover, principles of classification in official statistics may vary, making direct
comparisons across cases difficult. Comparative statistics must be interpreted with this in
mind. Second, there may be difficulties in gaining access to key decision makers in order to
be able to study the formal and informal political and bureaucratic processes and decisionmaking. While the data gathered through these interviews are important for the project, it will
also be possible to undertake a similar analysis based on written sources. Thus, while the
project aims at combining document analyses and interviews, the back-up plan is to base
considerable parts of the project on written sources (official documents, statistics, historical
and journalistic reports) if access to the inner circles of the institutions should prove difficult.
Project plan, management, organisation and cooperation
The project will be based at the University of Agder, and carried out in cooperation with the
Norwegian Institute of International Affairs and University of Manchester’s Effective States
and Inclusive Development (ESID) Research Centre. All the three participating institutions
have long-term experience in research on political and economic development, and a research
environment with a number of projects and researchers working on related issues.
The project will be led by Stein Sundstøl Eriksen (PI). He has published works on a
range of issues within the fields of International Studies, Development Studies and
Comparative Politics, including state formation/state failure, peacekeeping, democratisation,
and state-society relations more broadly. He has also worked on more general issues related to
12
political theory, political economy, imperialism, globalisation and development. His research
during the last 15 years has mainly focused on questions of state formation/state building,
state failure and state-society relations. The PI will be fully dedicated to the project. 50% of
the PI’s time is sought funded through this grant. In addition, the PI will use his regular
research time to work on the project. The PI will be actively involved in the project
management, and supervise and cooperate closely with other team members.
An inter-disciplinary project team will be established, with a core in political science, and
members from other social sciences (development studies, sociology or economics). The PI
will have overall responsibility for overseeing that deadlines are met, that budgets are
followed, and that all team members deliver what they have promised. Each team member
will commit to a timetable for when drafts will be produced, presented, and submitted to
journals. Once every year, the project group (core members and post.docs/PhD) will meet to
discuss progress and present findings.
The core project group will, in addition to the PI, consist of two professors from the
University of Agder (Kjell Havnevik and Stein Kristiansen), two researchers from the
Norwegian Institute of International Affairs (Jon Harald Sande Lie and Randi Solhjell) and
Sam Hickey, Research Director of the ESID Centre in Manchester. All members of the core
groups have extensive publications and experience with research on the state in the regions
covered by the project. Havnevik and Kristiansen specialize in political economy (Havnevik
in Africa and Latin America; Kristiansen in Asia and Africa), while Hickey’s, Lie’s and
Solhjell’s research focus on Africa, especially on social policy. Taken together, the core
group’s research competence covers both the regions and the themes of the project.
In addition to the core group, 3 post.docs (two at the University of Agder and one at
the University of Manchester) and one PhD (at the University of Agder) will be funded by the
project. The core team members will supervise and work closely with the PhD/postdocs.
Postdoctoral researcher 1: Will be funded by the University of Agder, and will have
special responsibility for the Latin America cases. He/she and should be a specialist on
political development in Latin America. Recruitment for this position has already started.
Postdoctoral researcher 2: Will be funded for 3 years, and will have special
responsibility for the analysis of economic policies. He/she and should be an economist or a
political scientist/sociologist specializing on political economy.
Postdoctoral researcher 3: Will be funded for 3 years, and will have special responsibility
for the analysis of social policies. He/she and should be a political scientist or sociologist
specializing on social policies, and will be based at the University of Manchester.
PhD fellow: Will be funded for 3 years, and will have special responsibility for the
Asian cases.
Each of the researchers engaged in the project will spend parts of the project period abroad. In
addition to fieldwork related to data collection, our aim is that each post.doc/PhD should
spend at least six months in a research institution outside Norway. One possible institution for
such visits for the scholars based in Norway is University of Manchester. Another alternative
is the University of California, Berkeley, where the PI has good contacts after having spent
two years as a visiting scholar earlier, and where both the University of Agder and NUPI are
collaborating members of the Peder Sather Center: An International Research and Educational
Collaboration between UC Berkeley and Norwegian Universities.
The main output of this research will be academic publications in peer-reviewed journals with
quality publishers. Each of the team members will contribute with several articles. The team
will also produce common publications in the form of special issues in a peer-reviewed
journals or edited books. Throughout the project period, research findings will be presented at
13
annual workshops and at international disciplinary conferences, like EADI, ISA and ECPR.
The articles will be submitted to high-ranking international journals with potential interest in
the topic, such as Development and Change, Comparative Politics, Journal of Asian Studies,
African Affairs and Third World Quarterly. Pre-print versions of all articles will be made
publicly available on the project website. Finally, a co-authored book will synthesise findings
and tie them to the broader debate on the state, globalization and social policies; it will be
submitted for publication to a renowned international publisher.
General considerations
Ethics
This project will adhere to the highest sensitivity of ethical considerations in all phases of
research. The ethical guidelines of the Norwegian National Committee for Research Ethics in
the Social Sciences and the Humanities will inform the researchers’ behaviour within the
project. Informed consent is of primary importance, and the content of the research, as well as
the possibility to drop out at any stage, will be made to all participants. Confidentiality and
privacy will be ensured. The names and distinctive characteristics of the participants can be
concealed as requested or when suitable, in order to ensure protection from risks of harm.
Gender
In the analysis of social policy, we will have special focus on whether different forms of
social policy have a gender bias. For instance, since more men than women tend to have
formal employment, forms of social protection related to employment status are likely to
disproportionally favour men. By contrast, cash transfers and public health care are likely to
be more gender neutral.
A minimum of two, and preferably three of the post.docs/PhDs to be recruited will be
women. Throughout the entire research process particular sensitivity will be applied to gender
relations and roles.
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