Globalization and Taxation: Challenges to the Swedish Welfare State

Many have argued that the increased international mobility of both capital and labor witnessed in recent years will force advanced capitalist democracies to cut taxes and, thus, ultimately roll back their welfare states. This analysis tests this hypothesis through an examination of policy developmen...

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Bibliographic Details
Published in:Comparative political studies 2002-09, Vol.35 (7), p.839-862
Main Author: STEINMO, SVEN
Format: Article
Language:English
Subjects:
Capital mobility
Comparative politics
Globalization
Government Spending
Labour mobility
Political science
Social services
Social welfare
Sweden
Taxation
Welfare
Welfare Policy
Welfare Reform
Welfare State
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Summary:Many have argued that the increased international mobility of both capital and labor witnessed in recent years will force advanced capitalist democracies to cut taxes and, thus, ultimately roll back their welfare states. This analysis tests this hypothesis through an examination of policy developments in Sweden, the country with the world's heaviest tax burden and largest social welfare state. The analysis focuses on the history and structure of taxation policy (the policy arena predicted to be most directly affected by globalization). The findings reveal that there have been very important changes in the Swedish welfare state: The tax and spending regimes have been changed less than the globalization thesis predicts. This analysis argues that Sweden has indeed adapted and changed in recent years but finds little support for the more dire thesis that countries like Sweden must abandon their high-tax regimes and/or their generous social welfare systems.
ISSN:0010-4140
1552-3829
DOI:10.1177/0010414002035007004