Sunday, 3 June 2012

Can Global Egalitarians Defend the Welfare State?

This article is adapted from my MPhil thesis, and focuses on the more practical and empirical side of the globel egalitarian's dilemma with respect to the welfare state


Egalitarians often see the welfare state as the obvious vehicle for their principles. But its beneficiaries are relatively affluent by international standards. For example, an average household in the bottom 5% of the French income distribution will be among the richest 28% of humanity.[1] From a global perspective, the welfare state redistributes from the super-rich to the upper middle class.
A number of egalitarians have spotted this potential tension in their thought without exploring it fully. For example, Stuart White believes that a “cluster of issues around global and intergenerational justice is likely to become as important as the classical debates between left and right on the justice of the welfare state”.[2] Similarly, Robert Goodin notes that “it is logically very difficult indeed not to be drawn ‘beyond the welfare state’ and extend similar protections to the needy worldwide”.[3]  Meanwhile, different political theorists have developed a strong defence of the idea that egalitarian concerns should not be limited to nation states. This view, known as global egalitarianism, holds that material inequalities between individuals in different nations are morally problematic.

This opportunity to discomfit egalitarians has not escaped the notice of those on the right. Sam Bowman, of the libertarian think tank The Adam Smith Institute, exploits it to bait his ideological opponents:

support for a welfare state in the UK is wrongheaded even if you believe that a welfare state is a good way of combating poverty. If throwing money at people improves their long-run living standards, the left should oppose a welfare state in Britain and want to direct all social spending to the developing world.[4]

Bowman goes too far in suggesting global egalitarians are committed to dismantling the entire welfare state – this would inevitably lead to people in places like the UK becoming impoverished even by global standards. The real question is whether global egalitarians can support more generous welfare provision in affluent countries (like the UK) than elsewhere. If not, this would certainly imply dramatic cuts to Western welfare states, such as Britain’s.

In this article, I want to argue that even if global inequality renders welfare states as generous as those of Western countries morally unjustifiable in principle, global egalitarians still have pragmatic reasons to defend them.[5] Given certain contingent facts about public opinion in developed countries, bigger welfare states are associated with support for measures that benefit the global poor. I take three measures in turn – aid, trade and migration – and explain (i) how each of these contributes to mitigating global inequality, and (ii) how each of these is associated with larger welfare states.


The question of whether foreign aid helps the global poor is so disputed that the study of aid effectiveness has become a field in itself within development economics. It is often hard for outsiders to make sense of the mutually contradictory findings that regularly emanate from it, [6] but there are a few general points that can be made against aid sceptics. Firstly, though many doubt whether aid has a positive influence, there is hardly any evidence that aid, taken as a whole, has been harmful.[7] Secondly, the aid effectiveness literature takes a particularly narrow view of success – economic growth is the most common metric. That aid has had a positive non-economic impact independent of its direct economic effects is relatively clear. Aid has financed successful health interventions, such as the eradication of smallpox.[8] It was instrumental in supporting the ‘green revolution’ and so feeding the world’s poorest. It has contributed to raising education levels.[9] Thirdly, though it remains controversial, there is reasonable evidence to suggest that aid has, in fact, produced economic growth.[10] This result is especially strong when we account for the fact that not all aid is intended to boost economic output.[11] Fourthly, there is the expectation that aid will become more effective as practitioners gain a better understanding of what does and does not work.[12] Thus while much of the evidence remains inconclusive, we should still expect global egalitarians to favour increased foreign aid.

A few political scientists have explored the connection between a country’s welfare state and its contribution to foreign aid. A common finding is that bigger welfare states tend to give more aid.[13] Yet this is insufficient to establish a causal connection – it does not show that countries give more aid because they have a bigger welfare state.

There are a number of ways this relationship might be explained. A third factor might cause both high welfare expenditure and high aid donation. For example, a strong commitment to egalitarianism would apply the same logic to domestic and international inequality. Confidence in the effectiveness of state intervention would also explain both. These underlying values may well be independent of existing institutions. However, it has also been suggested that political values are often conditioned by the norms embodied in existing institutions.[14] It could be that the welfare state develops an egalitarian ethos which spreads from the domestic sphere to the international.[15]

 These static background factors might help explain the relationship between the welfare state and foreign aid, but there may also be dynamic factors, brought into play by changes to welfare or aid spending. The idea that welfare and foreign aid spending could ‘crowd each other out’ is implausible – aid never constitutes more than a tiny proportion of government spending. Yet it is well established that citizens of rich countries vastly overestimate how much their governments spend on foreign aid.[16] If 25% of the US government’s budget really was spent on aid, as the average American thinks, then greater welfare spending would be much more likely to necessitate cuts to foreign aid. Thus cutting the welfare state may well make foreign aid seem more affordable, and therefore more popular.

At the same time, many people have the view that the government has obligations to look after its own people first and foremost, and that foreign aid is only acceptable once a basic standard of living is secured for all citizens. The global egalitarian may disagree violently with these values, and seek to change them, but if they are pragmatic, they must account for their existence. On this view, the less discontent there is with the adequacy of the state’s provision for its own citizens, the more support there will be for the state assisting foreigners.

The evidence offers most support for this last hypothesis. Using survey data, Noel and Therien find that support for international redistribution is strongest in those countries where there is least demand for further domestic redistribution i.e. where people are most satisfied with existing welfare institutions.[17] By contrast, the countries that most favoured more domestic redistribution tended to be against increasing foreign aid, and were often the countries with the least social protection. Noel and Therien suggest that this is because inequality is less of a concern in more equal countries with a great deal of state intervention in place.

The extreme cases of Denmark and France illustrate the point. Denmark, with the most generous welfare state and lowest inequality in the OECD, showed little appetite for further redistribution. Only 67% of respondents thought something should be done about Danish inequality – the lowest in the sample. At the same time, 89% of Danes thought more should be done to help the global poor. By contrast, those proportions were almost exactly reversed in France – 91% calling for greater domestic redistribution compared to 67% wanting more international redistribution.

The lesson that Noel and Therien draw from this is that mass publics “support international redistribution more strongly when principles of justice have been institutionalized domestically and when poverty has been tackled at home, and less strongly in the absence of such principles and achievements”.[18] Extensive domestic redistribution seems to be a popular precondition of increasing foreign aid. Global egalitarians therefore have good reason to defend the welfare state since it is necessary to maintaining public support for foreign aid.


The role of trade in poverty alleviation is another controversial issue, but most of the controversy relates to the question of whether poor countries ought to open their economies to world markets. However, this is not the relevant question for our purposes – we are concerned with the policies of rich countries. It is much less debatable that the protectionism of developed countries harms the global poor. Tariffs and subsidies keep the global poor out of lucrative markets. They depress world prices, and increase market volatility. Worse, agriculture and textiles, where poor countries have a comparative advantage, tend to be the most protected markets. Moreover, these are particularly significant sectors for employment – 70% of Africans are farmers.[19]

Various estimates have been made of the concrete cost of maintaining these barriers. Cline suggests that the removal of industrial country agricultural subsidies and protections could reduce global poverty by 8%.[20] It is estimated that a similar move for textiles would be worth $23.8 billion a year to developing countries.[21] Farmers of just one crop in one region – cotton growers in Francophone Africa – are believed to have lost $700 million as a result of artificially depressed prices caused by subsidies.[22] It has been suggested that “For every $3 that the EU gives Mozambique in aid, it takes back $1 through restrictions on access to its sugar market”.[23]

A few poor countries could be harmed by the removal of certain trade barriers, at least in the short run. For example, Mauritius benefits from its privileged access to the inflated prices of the EU sugar market.[24] Net importers of food might be squeezed by the higher prices resulting from the withdrawal of subsidies. However, those who stand to lose – those in cities and relatively industrialised economies - are vastly outnumbered by, and generally better off than, those who stand to gain.[25] It is fairly safe to say, then, that trade liberalisation in rich countries would help reduce global inequality.

Larger welfare states have been associated with trade liberalisation for three reasons.[26] Firstly, they stabilise expectations. The more dependent a person is on the market for their income – especially volatile global markets – the greater their potential losses from free trade are likely to be, and so the more risk averse they are likely to be. The safety net of the welfare state means that international trade is no longer seen as a fundamental danger to our standard of living, but as an opportunity. Secondly, the welfare state offers the possibility of compensating the ‘losers’ of globalisation. Those whose incomes fall can be assured of recouping some of their losses in the shape of state benefits. Moreover, they can also be sure of receiving support, like education and retraining. According to Peter Katzenstein, this was the conscious policy of many European countries: Sweden, Austria and the Netherlands sought to “complement their pursuit of liberalism in the international economy with a strategy of domestic compensation”.[27] Finally, the welfare state ensures a greater role in the economy for the government, allowing it to act as a counterweight to the vicissitudes of the market. In a turbulent open economy, the state sector might be seen as ‘safe’, a reliable source of employment and spending, which can step in should demand and employment fall in the rest of the economy.

Dani Rodrik offers empirical support for these theoretical claims.[28] He finds that more open economies have greater state expenditure, and that this relationship is robust, independent of income, region, size, political values and a number of other variables. Not only does the association hold cross-sectionally, it also holds over time: countries that were more open in 1960 were likely to have a bigger state sector in the next three decades. State spending is also related to the riskiness of trade: countries with more volatile terms of trade tend to have bigger welfare states. Rodrik also finds that while general government spending seemed to be the main tool in developing countries, variation in welfare spending explained most of the variation in openness among members of the OECD. According to his estimates, in the average country, a 10% increase in trade volume as a proportion of GDP is associated with an increase in welfare spending of 0.8% of GDP. There is also support for the theory that the government acts as a safe sector of the economy – a small increase in government spending tends to reduce income instability.

Rodrik only suggests that the direction of causation runs from trade openness to welfare spending, and not the other way around. In other words, he argues that more open countries are likely to develop bigger welfare states, but not necessarily that bigger welfare states are likely to become more open. However, this does not seem like an unreasonable extension of his argument and data – it is not contradicted by anything he says. The two processes certainly seem to occur close together. If welfare spending is seen as compensation for greater openness to trade, then it is not unreasonable to suggest that greater spending would leave people more willing to accept lower trade barriers, or that less spending would lead to demands to erect higher barriers. There is no reason why compensation cannot be provided in anticipation of openness. Indeed, this is sequence of events found in many countries surveyed by Molana et al: government growth precedes trade growth.[29]

There is good reason to suspect that a bigger welfare state encourages rich countries to lower the trade barriers, and so remove one of the major causes of global inequality. This gives global egalitarians further motivation to support the welfare state.


Migration can be expected to benefit the global poor in four ways. Firstly, there is the direct effect of allowing relatively poor individuals access to the opportunities of rich countries. Secondly, there are remittances - money earned by emigrants abroad and sent back to their country of origin. These have been estimated to be worth over $80 billion to developing countries, more than they received in aid.[30] Thirdly, developing economies benefit from the return of migrants, having developed skills abroad.[31] Finally, the prospect of emigration incentivises the acquisition of education and skills, even among some who will not eventually get to migrate.[32]

Against this, there is concern about ‘brain drain’ – the idea that migration leaves poor countries worse off because skilled professionals are lost at such a rate that it is impossible to replace them. Some commentators have expressed scepticism about the problem of brain drain. They argue that professionals only leave in large numbers because there is no capacity in the economy to absorb them - they cannot find jobs at home. Or that other factors, like religious persecution, motivate professionals to leave.[33]

Such a sanguine view underplays the genuine disruption caused in many countries by skilled migration. Carrington and Detragiache estimate that “the outflow of highly educated individuals reaches above 30 per cent in a number of countries in the Caribbean, Central America and Africa”.[34] Fortunately, such extreme levels of brain drain are relatively rare. Adams finds evidence that brain drain is a major problem in only a handful of Latin American countries: the Dominican Republic, El Salvador, Guatemala, Jamaica and Mexico.[35] While the negative consequences of brain drain ought not to be underplayed, it is a serious problem for only a minority of poor countries, and so this effect should not be enough to outweigh the massive beneficial effects of migration for the global poor: in terms of the direct advantages conferred on the migrants, remittances and human capital formation.

Assuming then that greater migration is desirable from a global egalitarian standpoint, does the welfare state encourage or undermine the movement of people to rich countries? On the one hand, the welfare state offers a safety net to workers who might see their incomes compromised by foreign competition, and so encourages support for immigration. Another salient factor is that a generous welfare state might be seen as facilitating integration, making immigration more palatable. However, in more generous welfare states it is possible that people will be more worried about immigrants overburdening the system and bringing it down.

Escandell and Ceobanu have tested these hypotheses by studying the relationship between social protection and anti-immigrant sentiment.[36] Their findings suggest merit in both of them, but pro-migration attitudes seem the more powerful. For the unemployed, living in a larger welfare state is associated with greater antipathy towards immigrants. This might reflect the fact that the unemployed are uniquely vulnerable, and are most likely to view immigrants as competitors for their benefits. However, on aggregate countries with bigger welfare states tend to be more welcoming to immigrants. This result holds controlling for region, income and partisanship.

Migration is an important means of global redistribution. There is evidence that stronger welfare states encourage greater support for migration. Therefore, the global egalitarian has another reason to support the welfare state.


This article has sought to argue that global egalitarians have pragmatic reasons to defend the welfare state, given that public opinion seems to demand a large welfare state as a precondition of international redistribution. It should be emphasised that this is only a tactical position, while  support for global redistribution remains uncommon. All it suggests is that global egalitarians ought to pursue two simultaneous strategies: on the one hand, they should promote global redistribution; on the other, they should defend domestic redistribution. The practical difficulties of this fight on two fronts is a subject for another day. 

[1]               Milanovic, ‘Global Income Inequality: What it is and Why it Matters (World Bank Policy ResearchWorking Paper 3865), 17; see also Milanovic, ‘How Unequal Is Today’s World?’, in his The Haves and the Have-Nots (New York: Basic Books, 2011).
[2]               White, ‘Ethics’, in Castles (ed.), The Oxford Handbook of the Welfare State (Oxford: Oxford University Press, 2010), 31.
[3]               Goodin, Protecting the Vulnerable: A Reanalysis of Our Social Responsibilities (Chicago: University of Chicago Press, 1985), 154. See also Arneson, ‘Luck Egalitarianism: A Primer’, in Knight and Stemplowska (eds.), Responsibility and Distributive Justice (Oxford: Oxford University Press, 2011), 46-7.
[4]               Bowman, ‘Looking at global inequality’, Adam Smith Institute blog, June 1 2011: < >; see also Bowman, ‘Only nationalism can justify a welfare state’, Adam Smith Institute blog, May 6 2011: ; Rohac, Does Inequality Matter? (Adam Smith Institute Briefing Paper). Available at: <>.
[5]               I make no argument here either for the claim that global equality is valuable, or that global egalitarians have no principled basis to support the welfare state. On the former, See Caney, Justice Beyond Borders: A Global Political Theory (Oxford: Oxford University Press, 2005). On the latter see my MPhil Thesis, which this article is adapted from: Bhattacharya, ‘Can Global Egalitarians Defend the Welfare State?’ (MPhil Thesis, University of Oxford, 2012).
[6]               Roodman, ‘Macro Aid Effectiveness Research: A Guide for the Perplexed’ (Center for Global Development Working Paper Number 134).
[7]               Hansen and Tarp, ‘Aid Effectiveness Disputed’, Journal of International Development 12 (2000).
[8]               Levine and the What Works Working Group, Millions Saved: Proven Successes in Global Health (Washington D.C.: Center for Global Development, 2004); Mishra and Newhouse, ‘Does health aid matter?’, Journal of Health Economics 28 (2009).
[9]               Dreher et al, ‘Does Aid for Education Educate Children? Evidence from Panel Data’, World Bank Economic Review 22 (2008).
[10]             Hansen and Tarp, op. cit.
[11]             Radelet et al, ‘Aid and Growth’, Finance and Development 42 (2005).
[12]             See, for example, Banerjee and Amsden, Making Aid Work (London: M.I.T. Press, 2007) and Collier and Dollar ‘Aid Allocation and Poverty Reduction’, European Economic Review 46 (2002).
[13]             Lumsdaine, Moral Vision in International Politics: The Foreign Aid Regime: 1949-89 (Princeton: Princeton University Press, 1993), 121-2; Noel, and Therien, ‘From Domestic to International Justice: The Welfare State and Foreign Aid’, International Organization 49 (1995), 529-30; Rieger and Leibfried, Limits to Globalization: Welfare States and the World Economy (Oxford: Polity, 2003), 85.
[14]             Rothstein, Just Institutions Matter: the moral and political logic of the universal welfare state(Cambridge: Cambridge University Press, 1998).
[15]             Lumsdaine, op. cit.
[16]             World Public, ‘American Public Vastly Overestimates Amount of U.S. Foreign Aid’, Available at: <>.
[17]             Noel and Therien, ‘Public Opinion and Global Justice’, Comparative Political Studies 35 (2002).
[18]             Ibid., 649.
[19]             Moss and Bannon, ‘Africa and the Battle over Agricultural Protectionism’, World Policy Journal 21 (2004).
[20]             Cline, Trade Policy and Global Poverty (Washington D.C.: Center for Global Development/ Institute for International Economics, 2004), 157-68.
[21]             IMF and World Bank, Market Access for Developing Country Exports – Selected Issues (Washington: IMF, 2002), 43.
[22]             Moss and Bannon, op. cit., 58.
[23]             Oxfam, ‘Dumping on the World: How EU sugar policies hurt poor countries’, Oxfam Briefing Paper 61.
[24]             Hoekman et al, ‘Reducing Agricultural Tariffs versus Domestic Support: What’s More Important for Developing Countries’, World Bank Policy Research Working Paper 2918.
[25]             Hoekman, op. cit.; Cline, op. cit., 273-5.
[26]             Rieger and Liebfried, op. cit.
[27]             Katzenstein, Small States in World Markets (Ithaca: Cornell University Press, 1985), 47.
[28]             Rodrik, ‘Why Do More Open Economies Have Bigger Governments?’, Journal of Political Economy 106 (1998).
[29]             Molana et al, ‘On the Causal Relationship between Trade-Openness and Government-Size: Evidence from OECD Countries’, International Journal of Public Policy 7 (2011).
[30]             Adams and Page, ‘International Migration, Remittances and Poverty in Developing Countries’, World Bank Policy Research Working Paper 3179.
[31]             Constant and Massey, ‘Return Migration by German Guestworkers: Neoclassical versus New Economic Theories’, International Migration 40 (2002).
[32]             Stark et al, ‘A brain gain with a brain drain’, Economics Letters 45 (1997).
[33]             Dowty, Closed Borders: The Contemporary Assault on Freedom of Movement (London: Yale University Press, 1987).
[34]             Carrington and Detragiache, ‘How Big is the Brain Drain?’, IMF Working Paper 98/102.
[35]             Adams, ‘International Migration, Remittances and the Brain Drain’, World Bank Policy Research Working Paper 3069.
[36]             Escandell and Ceobanu, ‘Anti-Immigrant Sentiment and Welfare Regimes in Europe’, Centre for Comparative Immigration Studies Working Paper 178.

This article was originally published in the Oxford Left Review Issue 7

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