This article attempts to explain changes and continuity in the developmental welfare states in Korea and Taiwan within the East Asian context. It first elaborates two strands of welfare developmentalism (selective vs. inclusive), and establishes that the welfare state in both countries fell into the selective category of developmental welfare states before the Asian economic crisis of 1997. The key principles of the selective strand of welfare developmentalism are productivism, selective social investment and authoritarianism; inclusive welfare development is based on productivism, universal social investment and democratic governance. The article then argues that the policy reform toward an inclusive welfare state in Korea and Taiwan was triggered by the need for structural reform in the economy. The need for economic reform, together with democratization, created institutional space in policy‐making for advocacy coalitions, which made successful advances towards greater social rights. Finally, the article argues that the experiences of Korea and Taiwan counter the neo‐liberal assertion that the role of social policy in economic development is minor, and emphasizes that the idea of an inclusive developmental welfare state should be explored in the wider context of economic and social development.

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Whilst the deadline for achieving the Millennium Development Goals (MDGs) looms large, the outcomes so far have been mixed. This article examines the policy logic that ‘good governance’ leads to poverty reduction, which has been adopted by international agencies in pursuit of the MDGs. This causal relationship is examined through an empirical panel‐data estimation using Worldwide Governance Indicators and the poverty headcount ratio in ninety‐eight countries. The empirical evidence does not support the hypothesis that good governance leads to poverty reduction. Good governance alleviates poverty only in middle‐income countries, not in least developed ones. These findings point to the necessity to devise policies that address poverty directly, rather than through indirect instruments, and highlight the urgent need to address structural inequality in developing countries.

This article examines social policy reforms in East Asia and whether the welfare states in the region became more inclusive in terms of social protection while maintaining their developmental credentials. It draws on findings from the United Nations Research Institute for Social Development (UNRISD) project on social policy in East Asia, covering China, Hong Kong Special Administrative Region of China, Japan, Malaysia, the Republic of Korea, Singapore, Taiwan Province of China, and Thailand. It shows that East Asian economies responded differently to the crisis in terms of welfare reform. While Singapore and Hong Kong maintained the basic structure of the selective developmental welfare state, Korea, Taiwan, and, to a lesser extent, Thailand implemented social policy reforms toward a more inclusive one. Despite such different responses, policy changes are explained by the proposition of the developmental welfare state: the instrumentality of social policy for economic development and realization of policy changes through democratization (or the lack of it).

Health Insurance. This paper seeks to answer whether the country's welfare state has moved beyond welfare developmentalism, by examining the cases of those two programmes. By the reform, the coverage of the National Pension Programme was extended to the whole population; and its financial sustainability and accountability were enhanced. Regarding National Health Insurance, efficiency reform was carried out on the management structure, while reform regarding financing was put on hold. These reforms were in clear contrast to the welfare developmentalism that used to place overwhelming emphasis on economic considerations. Despite these reforms, however, the Republic of Korea's welfare state faces the issues of ineffectual implementation and lack of financial sustainability of social policy. The National Pension Programme has failed to cover the majority of irregular workers, whose numbers are on the increase, and National Health Insurance needs to find a way to meet increasing health expenditure.