Globalization, Domestic Politics and Social Spending in Latin

Robert R. Kaufman and Alex Segura-Ubiergo ()
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Robert R. Kaufman: Rutgers University

Public Economics from EconWPA

Abstract: This paper analyzes the impact of globalization on social spending in Latin America. It shows that trade integration has a consistently negative effect on social security expenditures, and that this effect is compounded by higher integration into capital markets. The importance of political institutions is also key. Popularly-based governments tend to increase social security transfers, which reach a relatively small but politically powerful constituency in the formal sector. By contrast, the change to democracy increases education and health spending, which reaches a larger segment of the population.

Keywords: globalization; social spending; fiscal discipline; Latin America; trade openness; social policy (search for similar items in EconPapers)
JEL-codes: D6 D7 H (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pol
Date: 2005-04-30
Note: Type of Document - pdf; pages: 35
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0504009

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