Economic openness, democracy and institutional adjustment

About this book

This dissertation examines the process of late welfare state development in Spain and Portugal, primarily from the mid-1970s on following the collapse of the authoritarian regimes. I argue that these countries underwent a triple transition: to democracy, to considerably greater economic openness and to a welfare state. The first chapter examines the Iberian cases in the light of two competing theories about the relationship between economic globalization and domestic social policy. One theory argues that globalization places downward pressure on welfare states, as wage and tax competition erode the basis and sustainability of generous social programs. Another theory, embedded liberalism, argues that welfare states make a liberal international economic order politically feasible as they help cushion the increased risks that participation in a wider global economy brings. The second chapter examines the rise of a non-profit social sector in Portugal. Aided by government policy, this social sector increases the vitality of an otherwise weak civil society. The final chapter examines the process of reform in labor market policy and shows how reforms that liberalize the labor market are balanced with reforms that increase labor protections.