This article investigates the link between social security spending and financial crises. In doing so, the article answers two questions: what are the trends in social security spending in the aftermath of a financial crisis, and what factors can possibly explain these changes? The article shows that social security regimes have often been born out of crisis. In addition, on average, social security spending increases over the course of a crisis; however, there is wide regional variation, with advanced countries exhibiting the most countercyclical spending. This article lends support to the idea that crises can be used as an occasion to improve and strengthen social security; in doing so, countries not only mitigate the worst effects of the crisis, but also create better social policy and improve long-term crisis preparedness.
Dépenses de Sécurité Sociale Pendant la Crise Économique Cet article étudie le lien entre les dépenses de sécurité sociale et les crises économiques. Dans cette manière, cet article réponde aux deux questions: Quelles sont le tendance des dépenses de sécurité sociale au lendemain d’une crise financière? Quels éléments peuvent l’expliquer? Cet article montre que des règimes de sécurité sociale produit souvent en période de la crise. En outre, en moyenne, les dépenses de sécurité sociale augmentent au cours d’une crise. Cependant, il y a de variation régionale importante par rapport aux pays avancés qui montrent plus de dépense anticyclique. Cet article supporte l’idée que la crise est une occasion d’améliorer et renforcer la sécurité sociale. De cette manière, les pays réduisent des mauvais effet de la crise, mais créent également une meilleure politique sociale et améliorent l’état de préparation pour la crise à long terme.
Los Gastos de Seguridad Social en Tiempos de Crisis El presente documento investiga el lazo entre los gastos de seguridad social y las crisis financieras. Al hacerlo, el documento contesta dos preguntas: ¿cuáles son las tendencias en los gastos de seguridad social tras la crisis financiera?; ¿y cuáles son los factores que pueden explicar estos cambios? El documento muestra que los regímenes de seguridad social han nacido muchas veces de una crisis. Además, los gastos de seguridad normalmente aumentan en el curso de una crisis. Sin embargo, hay una gran variación regional, con los países avanzados mostrando los gastos contra-cíclicos más altos. Este documento apoya la idea de que se puede usar las crisis como una oportunidad de mejorar y fortalecer la seguridad social. Al hacerlo, los países no sólo atenúan los peores efectos de la crisis, sino también crean una política social más efectiva y mejoran la preparación a largo plazo para las crisis.
Adam, C. and Bevan, D. ( 2003) ‘Staying the Course: Maintaining Fiscal Control in Developing countries’, Brookings Trade Forum: 167-227.
2.
Afonso, A., Agnello, L. and Furceri, D. ( 2008) Fiscal Policy Responsiveness, Persistence and Discretion, Working Paper Series 954, European Central Bank.
3.
Akitoby, B., Clements, C., Gupta, S. and Inchauste, G. ( 2006) ‘Public Spending, Voracity, and Wagner’s Law in Developing Countries’, European Journal of Political Economy22(4): 908-24.
4.
Alberola, E. and Montero, J.M. ( 2007) ‘Debt Sustainability and Procyclical Fiscal Policies in Latin America’, Economia7(1): 157-93.
5.
Alesina, A.F. and Tabellini, G. ( 2005) ‘Why is Fiscal Policy Often Procyclical?’, Discussion Paper No. 2090, Institute for Economic Research, Harvard University.
6.
Allen, J. and Scruggs, L. ( 2004) ‘Political Partisanship and Welfare State Reform in Advanced Industrial Societies’, American Journal of Political Science48(3): 496-512.
7.
Arreaza, A., Sørensen, B. and Yosha, O. ( 1999) ‘Consumption Smoothing Through Fiscal Policy in OECD and EU Countries’, Working Paper Series 6372, NBER.
8.
Barro, R. ( 1979) ‘On the Determination of the Public Debt’ , Journal of Political Economy87(5): 940-71.
9.
Bordo, M.D., Goldin, C. and White, E.N. (eds) (1998) The Defining Moment: The Great Depression and the American Economy in the Twentieth Century. Chicago, IL : The University of Chicago Press.
10.
Bouget, D. ( 2003) ‘Convergence in the Social Welfare Systems in Europe: From Goal to Reality’, Social Policy & Administration37(6): 674-93.
11.
Braun, M. and di Gresia, L. ( 2003) ‘Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy’, Working Paper 487, Inter-American Development Bank.
12.
Bulir, A. and Hamann, A.J. ( 2007) ‘Volatility of Development Aid: From the Frying Pan Into the Fire?’, World Development36(10): 2048-66.
13.
Burgoon, B. ( 2001) ‘Globalization and Welfare Compensation: Disentangling the Ties that Bind’, International Organization53(3): 509-51.
14.
Cameron, D.R. ( 1978) ‘The Expansion of the Public Economy: A Comparative Analysis’, The American Political Science Review72(4): 1243-61.
15.
Castles, F.G. ( 2001) ‘On the Political Economy of Recent Public Sector Development’, Journal of European Social Policy11(3): 195-211.
16.
Castles, F.G. ( 2004) The Future of the Welfare State: Crisis Myths and Crisis Realities. Oxford: Oxford University Press.
17.
Castles, F.G. ( 2006) ‘The Growth of the Post-war Public Expenditure State: Long-term Trajectories and Recent Trends’, TranState Working Paper 35, Universität Bremen Collaborative Research Center 597.
18.
Darby, J. and Melitz, J. ( 2008) ‘Social Spending and Automatic Stabilizers in the OECD’, Economic Policy23(56): 715-56.
19.
Diallo, O. (2009) ‘Tortuous Road TowardCountercyclical Fiscal Policy: Lessons from Democratized Sub-Saharan Africa’, Journal of Policy Modeling31(1): 36-50.
20.
Galí, J., Perotti, R., Lane, P.R. and Richter, W.F. ( 2003) ‘Fiscal Policy and Monetary Integration in Europe’ , Economic Policy18(37): 533-72.
21.
Garrett, G. and Mitchell, D. ( 2001) ‘Globalization Spending and Taxation in the OECD’ , European Journal of Political Research39(3): 145-78.
22.
Gavin, M. and Perotti, R. ( 1997) ‘Fiscal Policy in Latin America’, NBER Macroeconomics Annual12: 11-61.
23.
Gough, I. and Wood, G. (eds) (2004) Insecurity and Welfare Regimes in Asia, Africa and Latin America: Social Policy in Development Contexts. Cambridge: Cambridge University Press.
24.
Green, D.J. and Campos, J.E. ( 2001) ‘Fiscal Lessons from the East Asian Financial Crisis’ , Journal of Asian Economics12(3): 309-29.
25.
Hagfors, R. and Saari, J. ( 2006) Social Policy in the Economic and Monetary Union: Social Expenditures and Public Indebtedness in 15 EU Countries, Social Security and Health Reports 72. Helsinki: Kela, Research department.
26.
Haggard, S. and Kaufman, R.R. ( 2008) Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe. Princeton, NJ: Princeton University Press.
27.
Hausken, K., Martin, C.W. and Plümper, T. ( 2004) ‘Government Spending and Taxation in Democracies and Autocracies’, Constitutional Political Economy15(3): 239-59.
28.
Hays, J., Ehrlich, S. and Peinhardt, C. ( 2005) ‘Government Spending and Public Support for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis’, International Organization59(2): 473-94.
29.
Hicks, N. and Wodon, Q. ( 2001) ‘Social Protection for the Poor in Latin America’ , CEPAL Review73.
30.
Hicks, A. and Zorn, C. ( 2005) ‘Economic Globalization, the Macro Economy, and the Reversals of Welfare: Expansion in Affluent Democracies, 1978-94’ , International Organization59(3): 631.
31.
Huber, E. and Stephens, J. ( 2001) Development and Crisis of the Welfare State: Parties and Policies in Global Markets. Chicago, IL: University of Chicago Press.
32.
International Labour Organization (ILO) (2008 ) Can Low-income Countries Afford Basic Social Security?, Social Security Policy Briefings Paper 3. Geneva: International Labour Office, Social Security Department.
33.
Ilzetzki, E. ( 2008) Rent Seeking Distortions and Fiscal Procyclicality 11900 . Munich Personal RePEc Archive.
34.
Ilzetzki, E. and Végh, C.A. ( 2008) ‘Procyclical Fiscal Policy in Developing Countries: Truth or Fiction?’, Working Paper Series 14191, NBER.
35.
International Monetary Fund (IMF) (2001) Government Finance Statistics Manual 2001 (GFSM 2001), IMF.
36.
Iversen, T. and Cusack, T. ( 2000) ‘The Causes of Welfare State Expansion: Deindustrialization or Globalization?’, World Politics52(3): 313-49.
37.
Kaminsky, G.L., Reinhart, C.M. and Végh, C.A. ( 2004) ‘When it Rains, it Pours: Procyclical Capital Flows and Macroeconomic Policies’, Working Paper 10780, NBER.
38.
Kaufman, R.R. and Segura-Ubiergo, A. ( 2001) ‘Globalization, Domestic Politics, and Social Spending in Latin America: A Time-series Cross-section Analysis, 1973-97’, World Politics53(4): 553.
39.
Keum, J., Chang, J., Hwang, D.-S., Kim, D.-H., Kim, J., Lee, B.-H., Lee, K.-Y., Park, S.-J. and Yoo, K.-S. ( 2006) Employment Insurance in Korea: The First Ten Years. Korea: Korean Labor Institute.
40.
Kittel, B. and Obinger, H. ( 2003) ‘Political Parties, Institutions and the Dynamics of Social Expenditure in Times of Austerity’, Journal of European Public Policy10(1): 20-45.
41.
Kittel, B. and Winner, H. ( 2005) ‘How Reliable is Pooled Analysis in Political Economy? The Globalization-welfare State Nexus Revisited’, European Journal of Political Research44(2): 269-93.
42.
Korpi, W. and Palme, J. ( 2003) ‘New Politics and Class Politics in the Context of Austerity and Globalization: Welfare State Regress in 18 Countries, 1975-95’ , The American Political Science Review97(3): 425-46.
43.
Laeven, L. and Valencia, F. ( 2008) Systemic Banking Crises: A New Database, Working Paper 224, IMF.
44.
Lane, P.R. ( 2003a) ‘Business Cycles and Macroeconomic Policy in Emerging Market Economies’, International Finance6(1): 89-108.
45.
Lane, P.R. ( 2003b) ‘The Cyclical Behaviour of Fiscal Policy: Evidence From the OECD’, Journal of Public Economics87(12): 2661-75.
46.
Lee, Y. and Sung, T. ( 2007) ‘Fiscal Policy, Business Cycles and Economic Stabilisation: Evidence From Industrialised and Developing Countries’, Fiscal Studies28(4): 437-62.
47.
Lindert, K., Skoufias, E. and Shapiro, J. (eds) ( 2006) ‘Redistributing Income to the Poor and the Rich: Public Transfers in Latin America and the Caribbean’, Social Protection Discussion Paper no. 0605, Social Safety Nets Primer Series, Washington, D.C.: The World Bank.
48.
Lustig, N. ( 2000) ‘Crises and the Poor: Socially Responsible Macroeconomics’ , Technical Papers Series No. POV-108, Inter-American Development Bank.
49.
Lustig, N. ( 2008) ‘Thought for Food: The Challenge of Coping with Soaring Food Prices’, Working Paper 155, Center for Global Development.
50.
Lustig, N., Fishlow, A. and Bourguignon, F. ( 2000) ‘Presidential Address: Crises and the Poor: Socially Responsible Macroeconomics [with Comments]’, Economía1(1): 1-30.
51.
Mahler, V.A. and Jesuit, D.K. ( 2006) ‘Fiscal Redistribution in the Developed Countries: New Insights from the Luxembourg Income Study’, Socio-Economic Review4(3): 483.
52.
Midgley, J. ( 1995) Social Development: The Developmental Perspective in Social Welfare. London: SAGE.
53.
Novick, M., Tomada, C., Damill, M., Frenkel, R. and Maurizio, R. ( 2007) ‘In the Wake of the Crisis: Argentina’s New Economic and Labour Policy Directions and Their Impact’, Research Series 114, International Institute for Labour Studies, International Labour Organization.
54.
Obinger, H., And, S. and Castles, F. ( 2005) ‘Bypasses to a Social Europe? Lessons From Federal experience’, Journal of European Public Policy12(3): 545-71.
55.
Pallage, S. and Robe, M.A. ( 2001) ‘Foreign Aid and the Business Cycle’, Review of International Economics9(4): 641-72.
56.
Park, Y. ( 2008) ‘Revisiting the Welfare State System in the Republic of Korea’, International Social Security Review61(2): 3-19.
57.
Ravallion, M. ( 2008) ‘Bailing out the World’s Poorest’, Policy Research Working Paper 4763, Development Research Group;World Bank.
58.
Rodrik, D. ( 1998) ‘Why Do More Open Economies Have Bigger Governments?’ , Journal of Political Economy106(5): 997-1032.
59.
Ruggie, J.G. ( 1982) ‘International Regimes, Transactions and Change: Embedded Liberalism in the Postwar Economic Order’, International Organization36(2): 379-415.
60.
Skocpol, T. ( 2002) ‘What it Will Take to Build a Family-friendly America’ , in S.A. Hewlett, N. Rankin and C. West (eds) Taking Parenting Public: The Case for a New Social Movement (pp. 219-34). Lanham, MD: Rowman & Littlefield.
61.
Spilimbergo, A., Symansky, S., Blanchard, O. and Cottarelli, C. ( 2008) Fiscal Policy for the Crisis, IMF Staff Polisition Note SPN/08/01.
62.
Swank, D. ( 2001) ‘Mobile Capital, Democratic Institutions and the Political Economy in Advanced Industrial Societies’, Journal of Comparative Policy Analysis3(2): 133-62.
63.
Swank, D. ( 2002) Global Capital, Political Institutions, and Policy Change in Developed Welfare States. CambridgeCambridge University Press.
64.
Swank, D. ( 2003) ‘Withering Welfare?: Globalization, Political Economic Institutions, and the Foundations of Contemporary Welfare States’, in L. Weiss (ed.) States in the Global Economy: Bringing Domestic Institutions Back In (pp. 58-82). Cambridge : Cambridge University Press.
65.
Swank, D. ( 2005) ‘Globalization, Domestic Politics, and Welfare State Retrenchment in Capitalist Democracies’, Social Policy & Society4(2): 183-95.
66.
Talvi, E. and Végh, C.A. ( 2005) ‘Tax Base Variability and Procyclical Fiscal Policy in Developing Countries’, Journal of Development Economics78(1): 156-90.
67.
Thornton, J. ( 2008) ‘Explaining Procyclical Fiscal Policy in African Countries’, Journal of African Economies17(3): 451-64.
68.
Tornell, A. and Lane, P.R. ( 1999) ‘The Voracity Effect’, The American Economic Review89(1): 22-46.
69.
Townsend, P. (ed) (2009) Building Decent Societies: Rethinking the Role of Social Security in Development. Basingstoke: Palgrave Macmillan/ ILO.
70.
United Nations (2006) Social Panorama of Latin America 2005. Santiago: CEPAL.
71.
Wagner, A. ( 1883) ‘The Nature of the Fiscal Economy’, in R.A. Musgrave and A.T. Peacock (ed) Classics in the Theory of Public Finance (pp. 1-8). London: Macmillan.
72.
Wibbels, E. ( 2006) ‘Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World’, International Organization60(2): 433-68.
73.
Wilensky, H.L. ( 2002) Rich Democracies: Political Economy, Public Policy, and Performance. Berkeley: University of California Press.
74.
Willmore, L. ( 2007) ‘Universal Pensions for Developing Countries’ , World Development35(1): 24-51.
