Culture, diversity, and the welfare state

Gründler, Klaus; Köllner, Sebastian

doi:10.1016/j.jce.2020.05.003

Cited by 27 publications

(12 citation statements)

References 139 publications

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“…The first three columns show the effects of ethnic fractionalisation (column 1), overall economic globalisation (column 2) and the different de facto and de jure globalisation measure (column 3) on redistribution. Though the negative sign is in line with previous literature suggesting less distribution in ethnically fractionalised countries (Gründler and Köllner, 2018;Alesina and La Ferrara, 2005), ethnic fractionalisation in general does not have a significant direct effect on redistribution. Economic globalisation and its subcomponents do not have statistically significant effects on redistribution either.…”

Section: Results Of the Effects Of Globalisation And Ethnic Fractionasupporting

confidence: 89%

“…Countries that are highly fractionalised exhibit less income distribution, while capitalist countries with low levels of fractionalisation redistribute to a higher degree. Gründler and Köllner (2018) uncover negative effects of ethnic and cultural diversity on redistribution. Their main hypothesis is based on Luttmer's (2001) "racial group loyalty" argument, which states that individuals are more likely to support redistribution policies when they benefit their own racial group.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

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The effects of economic globalisation and ethnic fractionalisation on redistribution

Pleninger

Sturm

2020

World Development

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We examine the effect of economic globalisation on income redistribution and hypothesise that it depends on ethnic fractionalisation. In highly fractionalised countries, powerful ethnicities are able to extract globalisation-induced benefits, whereas their governments face substantial political obstacles when redistributing income between ethnic groups. Using the newly constructed KOF Globalisation Index, we find supportive evidence for the interactive effect of ethnic fractionalisation and de jure financial globalisation on redistribution. In particular, the total effect of de jure financial globalisation on redistribution is negative in highly fractionalised countries. Governments in these countries are apparently not only reluctant to offset potential consequences stemming from de jure financial globalisation, but they even reduce redistribution to lower levels.

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Section: Results Of the Effects Of Globalisation And Ethnic Fractionasupporting

confidence: 89%

Section: Theoretical Backgroundmentioning

confidence: 99%

The effects of economic globalisation and ethnic fractionalisation on redistribution

Pleninger

Sturm

2020

World Development

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“…The empirical evidence on how globalisation influences tax rates and public (social) spending tends to support the compensation hypothesis rather than the race‐to‐the‐bottom hypothesis (Cameron, ; Dreher, Sturm, & Ursprung, ; Gaston & Rajaguru, 2013a,2013b; Gozgor & Ranjan, ; Gründler & Köllner, ; Herwartz & Theilen, ; Meinhard & Potrafke, ; Potrafke, ; Walter, ; Yay & Aksoy, ;—for surveys see Potrafke, ; Schulze & Ursprung, ; Ursprung, ) . Social expenditure has, for example, drastically increased in OECD countries and dominates fiscal policies—proceeding globalisation notwithstanding.…”

Section: The Globalisation–welfare State Nexus: Previous Studiesmentioning

confidence: 99%

The globalisation–welfare state nexus: Evidence from Asia

Potrafke

2018

World Economy

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How globalisation influences social expenditure has been examined for industrialised countries. Globalisation has often been shown to be positively associated with social expenditure in established industrialised countries, a finding that corroborates the compensation hypothesis. Scholars have focused on industrialised countries, because social expenditure is difficult to measure in developing countries. I use new data on social expenditure for Asian non‐OECD countries. Globalisation is measured by the new KOF Globalisation Index. My results do not suggest that globalisation influenced social expenditures in Asia. Neither do the results suggest that the nexus between globalisation and social expenditures varied across high‐income countries, such as Hong Kong and Singapore, and lower‐income Asian countries or across Asian regions. It is conceivable that Asian citizens did not demand increasing social support when globalisation proceeded rapidly because they enjoyed family and other private assistance. Asian countries also have weaker tax and labour market institutions than OECD countries and have therefore more difficulties in increasing social expenditure.

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“…Alesina and Angeletos, 2005;Lefgren et al, 2016). These factors are influenced by cultural norms and vary systematically across countries (Gründler and Köllner, 2020). Redistribution preferences may also be driven by a country's institutions, political history, or geography (Gründler and Köllner, 2017).…”

Section: Need For a Global Settingmentioning

confidence: 99%