Illan Nam, Colgate University, Feb 2011Draft <strong>in</strong> progress, please do not quote or citeparticipation <strong>in</strong> welfare provision<strong>in</strong>g, and engaged <strong>in</strong> considerable cost-cutt<strong>in</strong>g, whichresulted <strong>in</strong> a general decl<strong>in</strong>e and neglect of welfare programs dur<strong>in</strong>g the 1980s. With thereturn to democracy <strong>in</strong> the 1990s and the evident failure of market-oriented reforms toameliorate the problems of poverty and <strong>in</strong>equality <strong>in</strong> the region, Lat<strong>in</strong> Americanpolicymakers began to cast greater attention upon social policy. Dur<strong>in</strong>g the 1990s, socialexpenditures <strong>in</strong>creased <strong>in</strong> Lat<strong>in</strong> America, evident <strong>in</strong> higher per capita spend<strong>in</strong>g and the<strong>in</strong>troduction of new <strong>in</strong>struments and programs to tackle the problems of poverty and lackof access for lower-<strong>in</strong>come groups. 2However, the most heralded of the new <strong>in</strong>itiatives,which <strong>in</strong>clude social emergency or social <strong>in</strong>vestment funds, emergency employmentschemes, and direct (conditional) transfers and subsidies, adhere to the pr<strong>in</strong>ciple oftarget<strong>in</strong>g social policy towards the poorest and most vulnerable groups. Policymakershave been challenged <strong>in</strong> mov<strong>in</strong>g beyond these k<strong>in</strong>ds of programs towards more universaland redistributive ones. While advocates contend that targeted policies “make the bestuse of scarce resources for poverty alleviation,” 3 critics accuse such policies ofperpetuat<strong>in</strong>g a two-tier system that relegated the poor to <strong>in</strong>ferior benefits and re<strong>in</strong>forced“<strong>in</strong>equalities between poor people and the rest of society.” 4At the same time that social spend<strong>in</strong>g and program retrenchment were tak<strong>in</strong>gplace <strong>in</strong> Lat<strong>in</strong> America, a debate about the need for greater state responsibility for socialwelfare ga<strong>in</strong>ed traction <strong>in</strong> <strong>East</strong> <strong>Asia</strong> <strong>in</strong> the late 1980s-early 1990s. S<strong>in</strong>ce their transitionsto democracy <strong>in</strong> the late 1980s, Korea and Taiwan have passed new legislation expand<strong>in</strong>gLago, “Social Welfare Reform <strong>in</strong> the Context of Economic-Political Liberalization <strong>in</strong> the Lat<strong>in</strong> AmericanCases,” World Development 25:4 (1997); M. Victoria Murillo, “Political Bias <strong>in</strong> Policy Convergence:Privatization Choices <strong>in</strong> Lat<strong>in</strong> America,” World Politics (54:4) 20022 Social Panorama of Lat<strong>in</strong> America, 1990-2001, (Santiago: CEPAL, 2001)3 Karl Ove Moene and Michael Wallerste<strong>in</strong>, “Target<strong>in</strong>g and political support for welfare spend<strong>in</strong>g,”Economics of Governance (2001).4 Shap<strong>in</strong>g the Future of Social Protection: Access, F<strong>in</strong>anc<strong>in</strong>g, and Solidarity (Santiago: CEPAL, 2006).2
Illan Nam, Colgate University, Feb 2011Draft <strong>in</strong> progress, please do not quote or citeprovisions for social assistance, medical <strong>in</strong>surance, and pension programs. As a result,both countries now have national pension systems as well as s<strong>in</strong>gle-payer national health<strong>in</strong>surance programs. 5These programs are cast broadly along the l<strong>in</strong>es of traditionalsocial <strong>in</strong>surance programs based on collective pool<strong>in</strong>g of risk, with responsibilitiesdistributed among state, capital, and labor. 6Reflect<strong>in</strong>g this, levels of social spend<strong>in</strong>ghave risen steadily <strong>in</strong> many develop<strong>in</strong>g democracies <strong>in</strong> <strong>Asia</strong>, especially <strong>in</strong> the former“<strong>East</strong> <strong>Asia</strong>n tigers” of South Korea and Taiwan as well as, to a lesser degree, <strong>in</strong> Thailand.While the <strong>in</strong>dustrialization thesis may account for some of these states’ <strong>in</strong>creasedspend<strong>in</strong>g, what is more to the po<strong>in</strong>t is that the <strong>in</strong>creased spend<strong>in</strong>g took on quite differentforms among countries <strong>in</strong> <strong>East</strong> <strong>Asia</strong>, suggest<strong>in</strong>g that there was more at stake than merelyan <strong>in</strong>crease <strong>in</strong> social spend<strong>in</strong>g.That states govern<strong>in</strong>g a sizeable portion of the world’s population haveimplemented programs represent<strong>in</strong>g a markedly dist<strong>in</strong>ct paradigm of welfare/pensionprograms casts doubt upon naysayers’ prophesies of globalization’s <strong>in</strong>evitable “race tothe bottom.” The puzzle that emerges from a comparison of welfare state developments<strong>in</strong> Lat<strong>in</strong> America and <strong>East</strong> <strong>Asia</strong> is that <strong>in</strong> some countries <strong>in</strong> the latter region, over therelatively brief course of 15 years, a limited and segmented welfare system that cateredlargely to formal sector workers, was m<strong>in</strong>imally f<strong>in</strong>anced by the state, and was heavilydependent on private responsibility – on the part of households and companies – has beentransformed <strong>in</strong>to a national system that provides universal coverage and benefits to allcitizens. This has been accompanied by a shift <strong>in</strong> attitude among citizens as well as <strong>in</strong> the5 Kwon Huck Ju, “Transform<strong>in</strong>g the Developmental State <strong>in</strong> <strong>East</strong> <strong>Asia</strong>,” Development and Change (36:3)2005, Joseph Wong, Healthy Democracies, Soonman Kwon, “Economic Crisis and Social Policy Reform<strong>in</strong> Korea,” International Journal of Social Welfare (10:2) 20026 Robert Holzmann, “Pension Systems <strong>in</strong> <strong>East</strong> <strong>Asia</strong> and the Pacific: Challenges and Opportunities,” SocialProtection Unit [World Bank] June 2000.3
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