MPIEP No. 23

Redistribution in the Age of Globalization: The ‘Paradox of Redistribution’ Revisited

Jürgen Sirsch

ABSTRACT: In an influential article, Korpi and Palme (1998) challenge the view that targeting benefits at the poor is more redistributive. They explain their findings by pointing to the political feedback effects of welfare state programs on the broadness of political support for them. However, often it is argued that increasing globalization and post-industrialization has fundamentally altered the restrictions that welfare states face and that this has also changed the politics of welfare state expansion and retrenchment (Pierson 2001). Thus, the question arises whether Korpi and Palme’s findings still hold in the age of globalization and austerity. I discuss recent attempts to test Korpi and Palme’s theory and argue that they fall short of testing the central causal mechanisms proposed by them. I also provide some criteria for an adequate test of the theory. I find that the scant evidence we have points towards the continuing validity of the paradox of redistribution under conditions of global economic integration.

Keywords: redistribution, poverty, welfare states, globalization, encompassing institutions, universalism, targeting

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