Globalization, political regime type, and social spending in middle income countries, 1980-1999

Current debates suggest that economic globalization can either lead to a race to the bottom in which states lose their policy making autonomy or to a renewed commitment by the state to provide social benefits to its citizens. Comparative research on policy reform, however, suggests that political regime type is an important determinant of social policy. An analysis of education, health and social protection spending in a sample of 39 middle income countries between 1980 and 1999 demonstrates that different dimensions of economic integration are associated with adjustments to social spending, which are in part mediated by political regime type. Increased trade integration leads to more investment in human capital, especially in authoritarian regimes, but reduces expenditures on social protection in comparison to democracies.