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Welfare Reform on the Web (January 2005): Welfare State - Overseas

THE FUTURE OF THE WELFARE STATE: CRISIS MYTHS AND CRISIS REALITIES

F.G. Castles

Oxford: Oxford University Press, 2004

This book seeks to assess the threat posed to modern welfare states by globalization and demographic change. Using data from twenty-one advanced OECD nations, the author distinguishes crisis myths from crisis realities, locating, in the process, likely trajectories of welfare state development in coming decades. The findings of this book confront many of the basic assumptions of contemporary scholarship. Economic globalization has not led to a 'race to the bottom'. Analogous processes within the European Community have not led 'to a downward harmonization' of social spending. Over the past two decades, spending has been increasing and converging across the OECD. Rather than being in a state of crisis, western welfare states have achieved a steady state. The supposed impact of population ageing on social welfare budgets also turns out to be a myth, with differences in spending being a function of the structure of welfare systems, not of any demographic imperative. The only potentially real threat is rapidly declining fertility, but the author argues that welfare state spending in the form of family-friendly public policy is, in fact, our best defence against this problem.

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