1. Complementarity of Production Regime and Welfare Systems, and Its Diversities
This study supports the existing studies of political economy of the welfare state. First, there has existed a complementary relation between the types of productio ...
1. Complementarity of Production Regime and Welfare Systems, and Its Diversities
This study supports the existing studies of political economy of the welfare state. First, there has existed a complementary relation between the types of production regime--"a mutually reinforcing institutional arrangements that together support different types of firm strategies" in the production market -- and the welfare state. Second, however, this complementary relation has developed differently depending upon the historical path with which each country has been embedded. In the USA and the UK, for example, since the various processes inherent in production have mainly been coordinated within the market, the welfare function of the state has remained residual. In contrast, in Sweden and Denmark in which coordinated market economy is firmly entrenched, industrial relations have been coordinated on the national level, and labor market policies and social policies are closely linked. In addition, this study focused on the cases where the types of production regime and welfare state systems were not complementary. Cases in point are the UK before the World War II and Korea after the 1997 financial crisis. These cases have in common that the development of the welfare state is not conducive to economic growth, or vice versa.
2. The Effects of Production-Welfare Regime Linkages on Economic Performances
Depending upon the typology of the linkage between production regime and welfare state system, economic growth and distribution displayed variant performances. The social democratic welfare state achieved good performances in terms of macro-economic indicators relative to those countries belonging to the liberal, and the christian democratic welfare state. Furthermore, the social democratic welfare states accomplished relatively good performances evinced by the indicators of social equality. Those countries categorized as liberal welfare states showed relatively good performances in terms of macro-economic indicators whereas social equality remained at very low levels. The Christian welfare states showed middle levels in terms of macro-economic indicators as well as those of social equality. What is noteworthy is that after globalization, economic performances have varied depending not only upon the types of the welfare state but also upon the priority on which each country placed in selecting types of social programs. For example, countries which relied mainly on cash payments showed poor economic performance relative to those countries which invested heavily on public social services.
3. Implications for the Future of Korean Welfare State
This study suggests two alternatives with regards to a model of the welfare state Korea is to pursue. First, the conflictual relation between production regime and welfare systems ought to be transformed into a complementary one. Second, it is more promising to transform cash-payment based social services into public social services. As coordinated market economy OECD countries show, production, i.e., economic growth, and welfare still keep a complementary relation even during the era of globalization. The experiences of the Netherlands and Denmark before globalization give us a lesson: Excessive expenditure of transfer payments should be controlled, and systems of public social service should be reinforced, instead. In the latter case, economic growth and welfare are to contribute each other. The welfare states based on coordinated market economy and universal public social services were made possible by the historically continual concertation through which social forces conflicting with each other restrained themselves in pursuing short-term interests but shared the vision to accomplish in the long run.