The Irish Welfare State In A Globalized World Economics Essay

The chief aim of this paper is to analyze the type of public assistance province in operation in Ireland and to set up to what extent globalization has impacted upon the development of policies which relate to welfare proviso. There are assorted arguments on the impact of globalization on the Welfare province and these arguments will be discussed in order to set up if the Irish Welfare State has been impacted by such influences. It seems from initial reading that there has been assorted planetary influences that have impacted upon the Irish Welfare State ( Sweeney, 2003 ) , nevertheless many other states have had to postulate with the impact of globalization and have still managed to keep and better their Welfare State ( Taylor, 2010 ) The cardinal theoretical statement used within this undertaking will be the “ Competition State ” theory ( Cerny, 1997 ) . This theory suggests that many provinces view the proviso of public assistance to its citizens as secondary to staying profitable within the corporate sector. This hypothesis shall be applied to the Irish instance in an effort to understand the flight of the Irish Welfare State over the last 20 old ages. It would look pointless to discourse a job without offering possible solutions or options, so the concluding portion of this paper shall look at the Swedish theoretical account in an effort to measure how it continues to run a generous public assistance province in a globalized universe.

Globalisation Debate

Many faculty members and authors would propose that globalization encompasses a broad scope of elements which include planetary communicating webs, planetary civil society, multinational administrations, international monitory administrations and a scope of other histrions ( Sholte, 2005 & A ; Ferguson et Al, 2005 ) . The aforesaid list is merely a snapshot of the administrations and histrions involved in the globalization procedure. It is besides deserving observing that many of these footings and even the term globalization itself are extremely contested among the assorted observers involved in the procedure ( Yeates, 2001 ) . Those on the left of the political spectrum would see globalization with some pessimism, while those at the extreme left would see globalization as an immorality which enhances neo-liberal political orientation and promotes free market rules at a planetary degree. Those on the right would see globalization as grounds of the triumph of capitalist ideals on the planetary phase ( Westra,2010 ; Milward, 2003 ) . The right wing position chiefly focuses on globalization as it relates to planetary economic integrating which promotes the free market as the lone mechanism capable of exciting and prolonging advancement ( Ferguson et al,2002 ) .

Such a position welcomes the increased flow of capital, finance, production and trade between the assorted histrions at a planetary degree. Assorted observers would propose that such free flow, places force per unit area on authoritiess to cut down revenue enhancements and loosen up ordinance on the assorted obstructions that stand in the manner of a free planetary market ( Sandbrook et al, 2006 ) . Some would state this is a negative effect of globalization, which places economic advancement above societal demands and the proviso of public assistance ( Acquirre, 2008 ) . However, to propose that globalization affects all national economic systems in a similar manner would be naif to state the least. As Haus ( 2009 ) asserts, there is no province which is wholly restricted in determination devising due to the impact of globalization. While this may be accurate, there is still much argument among observers in relation to a race to the underside among assorted public assistance provinces ( Sholte, 2005 ; Korten, 2001 ) . This hypothesis shall be returned to subsequently after a brief scrutiny of the nucleus features of a public assistance province.

The Welfare State

The public assistance province is non an easy definable term by any stretch of the imaginativeness. How one public assistance province operates, will change greatly from the following public assistance province. Spicker ( 1995 ) would postulate that the public assistance province manages factors which contribute to the development and care of what he footings the “ large five ” . The five countries which Spicker references are societal lodging, societal security or public assistance payments, wellness proviso, societal work and educational services. Briggs ( 2006, p16 ) identifies the mode in which such proviso is organised when he suggests that “ a public assistance province is a province in which organized power is intentionally used ( through political relations and disposal ) in an attempt to modify the drama of market forces in at least three different waies ” . These three waies include the proviso of a minimal income, the proviso of a safety cyberspace for economic insecurity originating from such things as old age, illness, disablement and unemployment and the proviso of a certain degree of agreed cosmopolitan services irrespective of category or statues ( Briggs, 2006 ) . As Esping Andersen ( 1990 ) lineations, many welfare provinces may merely let for minimum province intercession in public assistance proviso, while other provinces may choose for much greater intercession in the bringing of public assistance to their citizens. Assorted observers are now proposing that globalization is doing it more hard for public assistance provinces to supply public assistance in a manner which de-commodifies their citizens ( Mishra, 1999 ; Sholte, 2005 ) .

The Competition State

Cerny ( 1997 ) was the theoretician who foremost developed the thought of the competition provinces. He suggests that the primary map of the public assistance province during the station war period was to insulate people from the forces of the market. This was pursued in assorted signifiers, by advancing full employment, wellness attention, and modulating the market in such a mode that served the best involvements of the populace. The province was the key mechanism which regulated the economic and societal facets within society. States sought to pull foreign investing, with assorted controls in topographic point which regulated the international flow of capital. Cerny ( 1997 ) believed that a crisis developed within the public assistance province when assorted provinces started losing the capacity to protect domestic economic systems from the international economic system. The consequence is that provinces prosecute policies that promote economic growing and besides adapt national policies which present them as a competitory state on the planetary phase.

Cerny ( 1997 ) identified assorted features of a competition province which included the domestic internalization of free market economic policies, a displacement off from rights based on citizenship, towards a more individualistic duty for public assistance and a decrease in public disbursement to command rising prices. Cerny ( 1997 ) further argues that the chase of such policies erodes the conditions for societal democracy to be within states. The province becomes the hatchet man of policies dictated by conditions in the universe market, instead than implementing policies which reflect the common good of their citizens. Esping Andersen ( 1990 ) would hold identified the latter as a societal democratic theoretical account of public assistance proviso where the province de-commodifies the person by cut downing or taking their citizen ‘s dependance on the market. There is the statement that many provinces have to intercede between the involvements of their citizen ‘s public assistance and planetary influences. As Haus ( 2008 ) suggests some provinces are better at this than others. However such a position would merely be a half truth, for one would hold to take into history the domestic political political orientations which determine the type of mediation which takes topographic point ( Mishra, 1999 )

Fougner ( 2006 ) argues that issues of international fight are geographically and historically specific and much of the literature was developed in the late 1980 ‘s in America in response to the turning trade shortage ( an surplus of imports over exports ) and a perceived competition menace from Japan and other East Asiatic states. What seems evident in such an analysis is that the development of planetary competition ideals originated in a state which is dominated by neo-liberal political relations and ideals. It hence, comes as no surprise that much of the critical literature links the competition province with neo-liberal ideals. Esping Andersen ( 1990 ) suggests that in a neo-liberal government, public assistance proviso is seen as a load on society and such a government would merely recommend the proviso of public assistance in fortunes where persons encounter jobs that remove them from the labor market. Even in this instance, public assistance is seen merely as a impermanent solution, which would assist the single return to the labor market. As Sholte ( 2000 ) and Mishra ( 1999 ) suggest, such neo-liberal ideals have taking on a planetary dimension and have created a race to the underside between states in the country of public assistance proviso. However Castles ( 2006 ) would reason that, this is non reflected in societal outgo figures produced by the Organisation for Economic Co-operation and Economic Development ( OECD ) .

This is demonstrated by Castles ( 2006 ) when he uses figures from the OECD which measures public societal outgo as a per centum of Gross Domestic Product. Data from the old ages 1960, 1980, and 1998 are used to find how 13 states fared in their outgo on public societal disbursement over these clip periods. As Castles ( 2006 ) points out, the lone two states which experienced an overall cutback on societal outgo were the Netherlands and Ireland. Castles ( 2006 ) statement suggests that in order for a race to the underside to happen societal outgo would hold to drop across the board. However as Esping Andersen ( 1990 ) suggests, comparing of societal outgo across states is flawed on a figure of evidences.

Harmonizing to Esping Andersen ( 1990 ) one such defect is concentrating on outgo entirely fails to admit how public assistance is distributed in different states. He gives Austria as an illustration, where big sums of benefits are given to privileged civil citizens. Another point which Esping Andersen makes is that many provinces spend big amounts of money on revenue enhancement alleviation on private insurance strategies which chiefly benefit the in-between category. Such disbursement may or may non be included in an outgo history, therefore giving an uncomplete image of the true nature of disbursement on public assistance within a given state. Even if we take these factors into history the fact remains that overall societal outgo in both the Netherlands and Ireland did non stay on a par with the other 11 states identified by Castles. With this in head we now turn our attending to the Irish public assistance province which is the primary focal point of this essay.

The Irish Welfare State.

It is non the intent of this essay to give an historical history of the Irish Welfare province and much of the focal point shall stay on the modern-day Irish public assistance province. Jacobson and Kirby ( 2006 ) suggest that during the ‘boom old ages ‘ much of the literature at the clip focused on the economic success of Ireland, with a batch of observers holding Ireland one of the most globalized states in the universe. One would conceive of with such success, bettering public assistance proviso would hold been high on the docket. However as many writers point out international fight and economic growing took precedence over public assistance proviso ( Jacobson and Kirby ; 2006 ; McCashin, 2004 ; O’Brian ; O’Connel, 2000 ) .

The undertaking of depicting how the Irish public assistance system operates is a hard undertaking and there is much dissension among observers as to what sort of public assistance province is in operation in Ireland. Murphy ( 2006 ) suggests that there has been a displacement in how societal policy organises welfare proviso. She argues that Ireland has shifted from a redistributive public assistance province to a competition province that internalises planetary neo-liberal rules.

Murphy ( 2006 ) argues that an built-in portion of such a system involves the commodification of citizens which either requires or encourages their citizens to work. This assessment holds true in the conditions placed upon persons who seek job-seekers benefit in Ireland. The nucleus conditions of having such benefits include being capable of work and being available for and truly seeking work ( Jobseekers Benefit, 2010 ) Many conditions are actively enforced by the Department of Social protection through menaces of losing public assistance payments, meetings to turn out that persons are actively seeking work and offers of preparation classs or occupation arrangements ( Murphy 2009 ) . Such policies in relation to welfare would suit good with Jessop ‘s ( 2002 ) appraisal of how a competition province promotes employment in the labor market. This encouragement to work besides high spots Cernry ‘s ( 1997 ) statement that authoritiess who actively pursue competitory policies, position public assistance as a load on resources.

While outgo on public assistance in the 1960 ‘s and 1970 ‘s did increase it still remained below the European Union norm ( Timmonen, 2003 ) . However McCashin ( 2004 ) would hold being doubting as to the motivations for the authorities increasing public assistance in this period and suggests that the so Fianna Fail authorities was utilizing such additions to win ballots from the Irish electorate. However from the mid 1980 ‘s onwards, retrenchment was strong on the cards with a decrease in societal outgo as a per centum of Gross Domestic Product. The grounds for this included mass in-migration, high unemployment and monolithic national debt ( Rush, 2002 ) . While the state of affairs did better after the mid 1990 ‘s, societal public assistance outgo continued to diminish ( Timmonen, 2003 ) . As O’Sullivan ( 2003 ) suggests the bead in unemployment and demographics such as a comparatively low ageing population could be used to explicate this. Even if this is taken into consideration, the fact remains that societal public assistance outgo failed to maintain gait with economic growing in Ireland. In existent footings welfare support did addition, nevertheless as a proportion of wealth it decreased. Basically there was an addition in wealth, but really small attempt to redistribute this wealth ( Kirby,2010 ) . This is demonstrated by O’Toole ( 2010 ) when he analyses the distribution of money spent on pensions each twelvemonth.

O’Toole gives an illustration of how disbursement on pensions each twelvemonth is distributed. Over 9 billion a twelvemonth is spent each twelvemonth on pensions in Ireland, 4.3 billion of this is spent on the province pension paid to retired pensionaries, 1.7 billion is transferred to the pension modesty fund and 3 billion goes on revenue enhancement releif for the accretion of private pensions. Eighty per centum of this goes to the top 20 per centum of earners in the state. From such an analysis it seems that the distribution of disbursement on pensions seems to favor the wealthiest. Both Jessop ( 2002 ) and Cerny ( 1997 ) would propose that in a competition province, redistribution of wealth takes a back place and policies which promote the proviso of public assistance from market beginnings is at the head of policy steps.

The proviso of wellness attention in Ireland is another specifying feature of the Irish public assistance province. A two tier wellness attention system has developed where if persons have the ability to pay for wellness insurance they have quicker entree to services than public patients. Equally good as this, revenue enhancement inducements are provided to those who choose the private insurance path ( O’Toole, 2010 ) . Such a policy portions clear features with Cernys ‘ ( 1997 ) hypothesis that competitory provinces promote single duty for public assistance. Further grounds of Ireland ‘s thrust towards a competitory province was reflected in the puting up of the Industrial Development Authority ( IDA ) in the late 1980 ‘s. The constitution of this authorization, coupled with low Corporation revenue enhancement led to many international corporations being attracted to Ireland. Competition and invention were the primary concern of this authorization ( Kirby, 2010 ) . Such an attack fits good with Jessop ‘s ( 2002 ) contention that that invention and competition are high on the precedence of provinces which are accommodating a competition attack in the planetary universe. Such an attack is besides reflected in much of the current authorities discourse.

In the recent four twelvemonth recovery program imperativeness conference there was monolithic accent placed upon invention and competition by the Taoiseach Brian Cowen and the Minister for Finance Brian Lenihan ( Irish Government, 2010 ) . It seems from the imperativeness conference that competitory ideals are strongly entrenched in Irish political relations. What is clear from the above treatment is that the Irish State and policy implemented by authorities clearly displays many of the features outlined in competition province literature. The fact that Ireland supports the competition province theoretical account seems to foreground the capitalist nature of globalization. As Axtmann ( 1998 ) suggests globalization can be seen as a undertaking aimed at pull offing and sing capitalist ideals at the planetary degree. He highlights the fact that many-sided administrations, like the International Monitory Fund and World Trade Organisation are now ordering planetary regulations, which are being internalised in national policies. Mary Robinson ( 2002 ) cited in Adshead & A ; Millar ( 2003 ) contended that globalization frequently amounted to the “ denationalization of power ” . She claimed that many national authoritiess are now able to step in less, due to restraints placed upon them by international corporations. So if we are to look at the policies adapted at a national degree in Ireland, it seems obvious that they reflect the market goaded orientation of globalization. It seems as though the political elite have decided that the lone manner to be in a planetary universe is excessively implement policies that reflect openness to neo broad ideals. This was clearly apparent when the Minister for Health Mary Harney stated “ geographically we ( the Irish province ) are closer to Berlin than to Boston. Spiritually we are likely a batch closer to Boston than Berlin ” ( Harney cited in Schafer, 2009, p108 ) . This statement clearly suggests an adaptation to neo broad thought promoted by America.

Is There An Option?

Hay ( 2006 ) outlines cardinal countries where the proviso of a more generous public assistance system would be good in both societal and economic footings. He does non hold with the contention that a public assistance province represents a drain on fight. One suggestion that he makes is that societal security/welfare payments have more benefits for the economic system in times of recession, than supplying revenue enhancement interruptions to the in-between categories. Hay bases his premise on the fact that supplying more generous public assistance payments would be more likely to bring forth ingestion in a society, which in bend generates demand.

While such an statement may keep some virtue, it seems like a simplistic statement and lone trades with transportation payments as a agency of redistribution. As demonstrated by Timmonen ( 2003 ) the focal point on transportation payments by the Irish public assistance system has the consequence of pretermiting the country of service proviso. Such an accent on transportation payments can frequently make poorness traps for persons who are better off on public assistance than in low paid occupations. In 2007 Ireland spend 1.1 % of its Gross National Income on hard currency payments for the unemployed, nevertheless if we look at Sweden they spend merely 0.7 % on hard currency payments for unemployment ( OECD Social Expenditure on transportation payments, 2007 ) . This may be explained by the major accent placed on service proviso in Sweden. While there is high revenue enhancement on rewards and ingestion, work related services provided by authorities counteract this high revenue enhancement. Childcare subsidies, generous sick and holiday wage are all portion of the inducements to take part in the labor market. ( Freeman & A ; Swedenborg 1997 ) . What seems to be clear with the Irish instance is that welfare proviso makes persons dependent instead than giving persons inducements to work. It should be noted that there has being some advancement in recent old ages in Ireland where a tapering of benefits has being introduced. For illustration a individual who has being unemployed for 12 months or more can retain their medical card for three old ages, if they return to portion clip work. Besides a individual who has being in reception of a One Parent Family payment for 12 months or more can retain their medical card for three old ages in both if they return to portion clip or fulltime work ( HSE,2010 ) .

Another specifying facet of the Swedish public assistance is its cosmopolitan health care system. In 2007 health care disbursement accounted for 6.4 % of Sweden ‘s GNI, while in Ireland health care disbursement accounted for 6.7 % per centum of Ireland ‘s GNI ( OECD Social Expenditure on Health, 2007 ) . Merely 3 % of the Swedish population opt for private wellness insurance ( Swedish Healthcare 2007 ) , whereas in Ireland about 50 % of people pay private wellness insurance ( O’Toole 2010 ) . Private wellness insurance in Ireland contributes to 10 % of disbursement on wellness attention. For their 10 % investing persons enjoy shorter waiting lists so those utilizing the wellness attention system on a public footing. In add-on to this, there is the job of high costs for General Practitioners which can ensue in persons avoiding traveling to GP ‘s therefore lending to the late diagnosing of assorted unwellnesss and bing the State more money to handle in the long tally ( O’Toole 2010 ) .

It may do more societal and economic sense to hold a cosmopolitan service like Sweden where every person has entree to healthcare based on demand instead than position ( Glenngrad et al, 2005 ) . The low per centum of persons choosing for private wellness insurance in Sweden seems to be an index that the public wellness service is equal plenty for the bulk of society. Furthermore this reflects policies which are classless in nature. Murphy & A ; Kirby ( 2009 ) would reason that in the Irish instance it seems as though policy has been developed in countries which promote economic development and neglect constabularies associating to the societal well being of people. This is non to state that Sweden neglects their economic system. Sweden has a high Corporation Tax which stands at 26.2 % , but still manages to pull high foreign investing and boasts a monolithic export market. Sweden was ranked 2nd in the Global Competiveness study for 2010- 2011, whereas Ireland is ranked 29th. The success of Sweden is attributed to high investing in higher instruction, low corruptness in public establishments, and the development of new engineering ( Global Competiveness Report, 2010 ) . So the impression that competiveness and a strong societal public assistance system do non travel manus in manus is non evident in the Swedish instance. This seems to propose that policies at the national degree can be developed in a manner that serves domestic involvements more than planetary involvements.

Theoretically the Swedish theoretical account of public assistance could be explained utilizing litmus ‘s cited in Spicker ( 1999 ) Institutional Redistributive Model. Such a theoretical account pursues equality through the redistribution of resources and seeks to supply high degrees of cosmopolitan entitlements based on right. Steinmo ( 2010 ) foreground how in Sweden capitalists fail to move rationally. He inquiries why capitalists in Sweden do non travel their companies to states with lower revenue enhancement economic systems. Stienmo ( 2010 ) carried out an interview with an anon. Volvo executive and asked him why he would non travel to the USA where revenue enhancements are lower. The executive suggested that while revenue enhancements may be lower in the USA, his quality of life would besides be lower. He argued that he would hold to work longer hours, have less holiday clip, pass more money on private insurance and have to pass more money on instruction for his kids. With Swedish establishments supplying for many of these fortunes, the executive did n’t believe he would be any better off in the terminal. Such a response seems to propose that Swedish establishments are efficient in run intoing the societal demands of their citizens. While, a Centre right authorities has being elected in Sweden in the last figure of old ages, the proviso of high degrees of cosmopolitan entitlements remains a dominant characteristic of the Swedish public assistance province ( Steinmo, 2010 ) .


In decision it is extremely apparent that the Irish public assistance province is both economically and socially unequal. Many of the policies pursued by the Irish authorities bear singular resemblance to neo-liberal ideals, and the same policies mirror many of the features outlined by the competition province literature. Whilst it is obvious that the province has to postulate with competition on the planetary phase, it is besides obvious that the policies they pursued to intercede between domestic and international influences favoured the latter. It seems as though Ireland pursued a ‘quick-fix ‘ to economic troubles by manner of pulling foreign investing through their celebrated low corporation revenue enhancement. Although the gap of the economic system to foreign investing increased wealth for many in society, those dependent on the State to supply for their public assistance seem to hold been left behind. It seems evident that the competition province is a byproduct of market driven globalization. As the Swedish theoretical account demonstrates the monetary value for economic success does non hold to come at the monetary value of the wellbeing of society. It seems to turn out that national political orientation is the finding factor in whether or non globalization can be used to profit a state. The adaptation of Ireland to the market goaded rules of globalization has created a state where the public assistance of the people is greatly dependent upon planetary economic conditions. If any advancement is to be made in Ireland the Ideology behind the development of policies, clearly requires a critical analysis.