Abstract
This article explores the impact of globalization on welfare spending in transitional states. Based on World Bank and International Monetary Fund (IMF) cross-country data sets 1990–2005, I test two leading hypotheses: the first of which predicts a negative relationship between global-economic embeddedness and welfare spending, and the second of which predicts a positive relationship between democratization and welfare spending. Using a cross-section time-series analysis, my findings suggest that the experiences of the transitional economies do not confirm either hypothesis. During the 16-year period of analysis, established globalization factors showed conflicting influence on welfare state arrangements. In addition, my analyses demonstrate a positive correlation between the use of IMF credit and welfare spending in transitional states. This finding contradicts the structural adjustment literature, which largely views policy-based conditional lending as a negative influence on receiving countries’ welfare expenditures.
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