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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

Redefining social welfare under the impact of globalization Simona Vonica Radutiu

The paper explores actual tendencies of national welfare state models with a particular interest on the impact of globalisation process on the welfare state. The research hypothesis the paper is based on is focus on the presumption that world is witnessing a new paradigm of defining welfare state. The analyze of factors potentially responsible for changes on welfare configuration would identify at least at two levels: a more general one represented by the globalization process and a more concrete one in terms of the European Union viewed as a transnational context. The basic assumption of the paper is that definition of social dimension would be focus on prospecting national welfare states rather than analyze of purely European Union legislation in social policy area. Structure of the paper The theoretical approach of welfare is taking in consideration typologies of welfare models developed by Scandinavian welfare researchers like Gøsta Esping-Andersen (1990), Walter Korpi and Joakim Palme (1998, Korpi 2000) and others. The second focus of the paper is the `globalisation' process. Because of its direct impact on financing, globalisation is often perceived as a threat addressed to welfare states, particularly so in countries with high taxation as the Nordic countries and Romania. The welfare state in most capitalist countries has been under pressure since the 1970s - by economic problems, neoliberal politics and globalisation process. But how and to what extent these challenges have affected social welfare programs is a matter of controversy. While some argue that welfare programs will be reduced to a minimum, others contend that the welfare state has been resilient against these challenges. Concerning the impact of globalisation on the welfare states, the paper overviews different scientific points of view. Some authors consider the `globalisation process' responsible for current welfare tendencies, while others are integrating globalisation into a larger framework with more elements involved such us labour market dynamics, demographically tendencies, international or national actors, etc.

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

Welfare state The transcultural and transnational European configuration is characterized by the sustainability of West European welfare states and the collapse of alternative communist model in East European welfare states. In this respect, one can says that the East enlargement of European Union is reflecting the transfer of successful institutional patterns. Economic and social development after the Second World War conferred a relative advantage to West European states at technological level, economic resources and organizational capacity to react properly to so called globalization's effects. Miss functions or tensions registered even in these welfare state models are an indicator of contradictions in function and necessity to redefine guidelines of collective welfare. 1 According to convergence theories of the 1960s, all industrial societies using similar technology will end in developing similar social structure. Transferring this idea in terms of social policy, it apparently emerges to a `common' state of institutional regulated welfare (Ramesh Mishra, 1977). New regulations registered in the relation between state-market- family have stimulated a tendency towards welfare pluralism in an international context in which the state is still playing a very important role. Actual welfare tendencies would be better characterized in terms of indicators of Post-Fordist development: decentralization, autonomy, flexibility, competition, and market orientation. Instead of a similar welfare structure, the Typologies of welfare models The theoretical starting points in analyzing by comparison different welfare models are the typologies developed by Scandinavian welfare researchers like Esping-Andersen (1990), Korpi and Palme (1998, Korpi 2000) and others. This chapter is not offering a complete overview of welfare typologies but it is taking in account the most relevant for the purpose of the paper. In his famous book, The Three Worlds of Welfare Capitalism (1990), Gøsta EspingAnderson distinguishes between three types of welfare capitalism, with specific characteristics:

"Introductory Course. Europe in Transformation ­Concepts and Realities", first sub-course of the "Transformation in a Comparative European Perspective - A Master Course on the Internet" See http://www.soc.lu.se/soc/distans/socrates/mastercourse/

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

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Conservative social policy - State insurances/strong entitlement ­ private insurances negligible. Corporatist, status-differentiated social insurance schemes. Preservation of the traditional nuclear family. Austria, France, Germany, Italy),

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Liberal social policy (Poor relief tradition ­ social assistance. The poor dependent on state social security ­ higher groups on the market. Means-tested benefits. USA, Great Britain, Canada, Australia)

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Social democratic social policy (Public universal welfare programs. Public second-tier earnings-related programs. Incorporation of the new middle class. Scandinavian countries)

Within the development of these models Esping-Andersen relates to historical differences in economic development, social structure and political coalitions. Korpi and Palme (1998) differentiates five different types of institutional structures: - Targeted model Eligibility is based on a means test, which results in minimum or relatively similar benefits to those who fall below a poverty line or are defined as needy. - Voluntary state-subsidised model. Tax money is used to help mutual-benefit societies and other voluntary organisations provide insurance to protect their members against loss of income. - Corporatist model. Benefits are earnings-related, but entitlements and rules can differ significantly among the programs for different occupational categories. Basic idea is focus on creating socio-political communities and co-operation between employers and employees. Programs governed by elected representatives of employees and employers, often with the state present as a minor third party. - Basic security model. Eligibility is based on contributions or on citizenship. Within the basic security model there are two variants with somewhat different levels of coverage. In the "citizenship" variant, eligibility is based on citizenship or residence. In the "insurance" variant eligibility is acquired through contributions by the insured and/or employers, entailing less than universal coverage. - Encompassing model. Eligibility is based on contributions and citizenship. Earnings-related benefits. Reduces demand for private insurance and encompass all citizens within the same program. Korpi (2000) has developed this typology to also include a gender dimension, where he distinguishes between three different gender policy models: Market oriented policies (Policy left to the market and/or families), General Family Support model (Public support to the nuclear family) and Dual Earner Support model (Encouraging women's labor force participation). Korpi then combines the two typologies above and differentiates between the following ideal types of 3

"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

social policy: Targeted/Market Oriented model, Basic Security/Market Oriented model, State Corporatist/Family Support model and Encompassing/Dual Earner model. Concerned for including poverty dimension in welfare analyze, Stephen Leibfried established four different social policy regimes in European Union: Scandinavian welfare state model (modern model), Bismark countries (corporatist model), English Saxon countries (residual model) and Latin countries (rudimentary model). (Stephen Leibfried, 1993) Bob Deacon added East European countries in his analyze focus on the development of social policy. The transition from planned to market economy transformed the initial similarity between post communist countries in different social development trends. According with this, new post-communist welfare models are: conservative-corporatism model, social-democratic model and free capitalist model. (Deacon, 1993) Globalization process The second key concept of the paper is the `globalization' process. This part is offering an overview of different approaches of globalization process for a better propsecting of its potential impact on the welfare state. The difficulty in finding a common agreed definition of `globalisation' process is caused by multi dimensions of this complex process. Martin Albrow considered the globalization process as being different from globalism, global forces and globality. Martin Albrow differences globality, global force, globalism and globalisation. `Global' consists in different levels of `modern'; connotations today are more of the commercialisation of humanity. Globality involves humanity under the thrall of natural forces. The concept of globalism represents a new modality to have in attention `global forces' from Marx's theory. Global forces do not respect human boundaries but people try to use boundaries in order to control them. But the most important concept in order to understand European reality today is globalisation. First of all it is the idea of change in various spheres: social, political, and economic. Migration process and demographic tendencies influence the moving of labour forces on all levels of labour market. The participation of women, the crises of jobs, the problem of unemployment and also the risk of self-employment are just few aspects in this area. `Globalisation' represents a concept that is used in different kinds of definition: analytical (specific facets of social life), realist and historical. Martin Albrow considers `globalisation' as "the most significant development and theme in contemporary life and social theory to emerge

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

since the collapse of Marxist systems"2. Behind the indeterminacy and ambiguity of the concept, the concept is breaking concepts like nation-state, organization and community. European society today is focus on globalisation. Talking about Transformation as opening to global trends, Nikolai Genov refers at transfer of successfully institutional patterns from Western countries. These are penetrating by different channels: global transfer of technology, worldwide commercial and financial transactions, transnational political processes and the diffusion of cultural patterns by means of telecommunications.3 Following the some distinction as between objective and subjective conations the globalization process is different from globalism.(Robin Cohen and Paul Kennedy, 2000). The cultural dimension of globalization (Tomlinson 1999) represents an alternative approach to four dimensions model proposed by Nicolae Genov: technological globalization, economical globalization, political globalization and cultural globalization. (Nicolae Genov, 1999) Because of its direct economical dimension especially influence at financial level, globalization is perceived as a threat to welfare states, particularly so in countries with high taxation as the Nordic countries and Romania. The welfare state in most capitalist countries has been under pressure since the 1970s - by economic problems, neo-liberal politics, and globalization. But how and to what extent these challenges have affected social welfare programs is a matter of controversy. While some argue that welfare programs will be reduced to a minimum, others contend that the welfare state has been resilient against these challenges. Global technology, economic competition, new geopolitical constellations represent global process with impact on West and East European societies. Economic, political and ideological context of welfare state was altered by three important developments: the collapse of alternative socialist model, globalization of economy and relatively decline of nation state. (Ramesh Mishra, 1999) Concerning the impact of globalization on the welfare states, the thesis includes different points of view. Some authors make the `globalization process' responsible for current welfare tendencies, while others are integrating globalization into a larger framework with more elements involved: labor market dynamics, demographically tendencies, international actors, etc.

Martin Albrow, `The Global Age State and Society behind Modernity', Stanford University Press, Stanford, California, 1997, p.89 3 Nikolai Genov,' Managing Transformations in Eastern Europe', UNESCO-MOST, Paris, Regional and Global Development, Sofia, 1999, p.26

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

Development of welfare policies in Europe This part of the paper is focus on actual welfare state tendencies and it will explore the impact of as transnational European context on welfare state. The scientific objectives are focus on analyzing alternative social policies adopted by member states, dissemination of best practices (Scandinavian welfare state model is a selected case study) and prospects for potential Romanian articulation to this social model. The hypothesis behind is that social cohesion at European Union level and directives common agreed by member states will represent the framework for so called social policy model oriented for promoting a decent level of quality of life for all citizens. Another hypothesis is that Scandinavian welfare state model is playing a special role New trends of welfare policies are also directly influences by economic concurrence, the transfer of technology and the role played by different national and international actors, especially NGOs representing civil society, organizations and international forums. The paper will examine the two major EU initiatives in social field: Employment National Plans and National Action Plans for Promoting Social Inclusion. The social implementations and initiatives of national member states are framed by the delegation of national sovereignty attributes to EU institutions, the subsidiary principles and European citizenship project. A possible answer to European and an international change is the network state. (Manuel Castells, 2000) Redefinition of European social policy model is including Scandinavian welfare state model as a key element. During 1960s, Sweden confronted a crisis of its Keynesian welfare state model. (Mats Benner, 2001) Since 1994, Denmark changes employment policy from passive measures to active politics that maintained "major elements of Nordic model" (David Etherington, 1998) or social democratic model according with Gosta Esping Andersen typology. The Danish employment policy is promoting activation instead of income and benefits reduction, improving of skills and experience, training and education, programs for unemployed people. The transition from welfare to workfare corresponds to the change from Keynesian welfare state model to Schumpeterian welfare state model. (Jacob Torfing, 1999) The new social model of economical regularization is oriented to work norms and social inclusion. (Horneman Moller, 2000) Within the transition from planned to market economy, Romania is confronting with major social problems in Romania as: high rate of poverty and extreme poverty, social exclusion, increase of informal economy, unemployment, lack of access to social service, low education. The necessity to have a coherent anti-poverty strategy is sustained by the perverse effects in 6

"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

terms of reproducing poverty. Vulnerable groups exposed to social exclusion are: orphans and abandoned children, youth, families with many children, single parent families, families with unemployed members, agricultural families, pensioners, homeless, the Roma population, people excluded from the labor market and deprived of its associated benefits. (C. Zamfir, 2001) The prospects on future welfare state tendencies under the impact of globalization and European Union social policy will support the analyze of social policy in Romania and strategies to promote welfare through social inclusion. Impact of globalisation on the welfare state The welfare state in most capitalist countries has been under pressure since the 1970s - by economic problems, neo-liberal politics, and globalisation. While some argue that welfare programs will be reduced to a minimum, others contend that the welfare state has been resilient against these challenges. Globalisation theorists like Ramesh Mishra (Globalisation and the Welfare State) has argued that the problems of welfare states is connected to certain important factors in the contemporary globalisation process - the collapse of the socialist alternative, the globalisation of the economy and the relative decline of the nation state. His concern for the welfare state is based on this particular situation."Is it possible for the welfare state to exist in a situation of economic globalization and, as a consequence, in a decline of nation states, keeping in mind that the welfare state is an achievement particularly of the national states?" As one response to current challenges some social democratic parties in Europe have put forward a policy that they describe as a "Third Way". Several contrasting views have been expressed on the "third way": as an adaptive/reactive ideology; an expression of convergence between the social democratic and liberal model; or a new utopia? The `third way" can be understood as a reaction to the challenges of globalisation or as an attempt to re-conceptualise social welfare. To what extent are recent shifts in welfare arrangements caused by the Third Way policies? According to Bob Deacon economic globalisation and its impact on national social policy also challenge traditional patterns of social policy analysis (Global Social Policy, chapter 1). In his book Deacon is proposing a new framework for global social policy analysis, which needs to include the following themes: pressures for globalisation; analytical and practical issues; a typology and the mechanisms of supranational social policy; possible reformist goals; obstacles confronting both the globalisation and the global reformist project; and alternative political strategies of global actors.

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

In contrast, Esping-Andersen, in his book "Social Foundations of Postindustrial Economies", de-emphasise globalisation as the major challenge to existing welfare regimes, at least in the developed countries in the Western world. In Esping-Andersen´s view, the major challenge to a welfare capitalism characterized by social citizenship, full employment, mass education, and well functioning industrial relations systems is the transformation to a postindustrial economy. A transformation caused, not primarily by globalisation, but by changes on the labour market (growth of the service sector) and in the family (demographic changes and women´s preference to work on the labour market), together with changes in technology. EspingAndersen describes these changes as a de-industrialisation and de-familialisation. According to Esping-Andersen, postindustrial transformation is "path-dependent", where the type of welfare regime decides what kind of adaptation strategies that will be pursued. Posing the question if the welfare state is incompatible with postindustrial society he notes: "A paradox of our times is the more that welfare states seem unsustainable, the greater are the demands for social protection." References -Albrow, Martin, "The Global Age State and Society behind Modernity", Stanford University Press, Stanford, California, 1997, -Benner, Mats, "Sweden: continuity and change in the transition between a Keynesian Welfare State and a Schumpeterian Workfare Post-National Regime" working paper, Lund, Suedia, 2001, - Castell, Manuel "End of millennium", ediia a doua, Blackwell Publishers, 2000, -Robin, Cohen i Kennedy, Paul "Global Sociology", MacMillan Press Ltd, Marea Britanie, 2000 - Deacon, Bob (1993). "Developments in East European Social Policy". In Catherine Jones (ed). New Perspectives on the Welfare State in Europe. London and New York: Routledge, pp. 177-197. -Deacon, Bob ,,Global Social Policy: International Organizations and the Future of Welfare. London", Sage, 1997 -Esping-Andersen, Gøsta (1990). The Three Worlds of Welfare Capitalism. PrincetonUniversity Press. -Esping-Andersen, Gosta "Social Foundations of Postindustrial Economies", Oxford, University Press, 1999,

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"Welfare state models between survival, reform and European Integration" Simona Vonica Rduiu

-Etherington, David "From welfare to work in Denmark. An alternative to Free market policies. Policy and Politics 26", (1998) în "The Oresund Summer University, The Scandinavian Studies Track", Roskilde University, Danemarca, 2001 -Genov, Nikolai, "Managing Transformations in Eastern Europe", UNESCO-MOST, Paris, Regional and Global Development, Sofia, 1999, -Hornemann Moller, Iver "Trends in the Danish social mode of regulation, The 2000 bargaining round. Collective Bargaining, Denmark 2000" in The Oresund Summer University, The Scandinavian Studies Track", Roskilde University, Danemarca, 2001 -Korpi, Walter (2000). "Faces of Inequality: Gender, Class and Patterns of Inequalities in Different Types of Welfare States". Luxemburg Income Study Working Paper No. 244. -Korpi, Walter and Joakim Palme (1998). "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality, and Poverty in Western Countries". -Korpi, Walter i Palme, Joakim `The paradox of redistribution and strategic equality: welfare state institutions, inequality, and poverty in Western counties" Luxemburg Income Working Paper No. 174. Available online: http://www.lis.ceps.lu/wps/174.pdf -Mishra, Ramesh "Society and social policy: Theories and practise of welfare", London, MCMillan Press, 1977 - Mishra, Ramesh. "Globalization and the welfare state", Cheltenham and Northampton: Edwar Elgar, 1999 -Preda, Marian "Politica social româneasc între srcie i globalizare", Polirom, Iai, 2002 -Tomlinson, Johan," Globalisation and Culture", Oxford: Polity, 1999 -Torfing, Jacob "Workfare with welfare: Recent reforms of the Danish welfare state. Journal of European Policy", 1999, în The Oresund Summer University, The Scandinavian Studies Track", Roskilde University, Danemarca, 2001 - Ctlin Zamfir "Poverty situation in Romania", UNDP, 2001

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