Skip to main content

What are the Implications of Globalisation and Global Crises for Policymaking and for Economics and Political Outcomes in Western Democracies?

What are the Implications of Globalisation and Global Crises for Policymaking and for Economic and Political Outcomes in Western Democracies?

with Vera Troeger

This is a new theme that builds on work done in Theme 2 during phase 1 of CAGE's research programme 2010-14. During this phase research focused on the implications of tax competition for capital mobility and viability of welfare state policies in OECD countries as globalisation has intensified. Key findings are that the notion of a race to the bottom is incorrect for various reasons including that capital is only imperfectly mobile, that the welfare state is generally financed by transfers within labour’s share of national income, that path dependency limits welfare-state reforms, and that mobile capital is attracted by a number of factors which can offset higher tax rates (Plumper and Troeger, 2012; Troeger, 2012). The research highlights the differing exposure to globalisation threats of small and large countries and of liberal and coordinated market economies among European countries.

During phase 2 (2015-19), research on these issues will be deepened and extended using the methods of quantitative political science by bringing together researchers using formal analysis and econometrics to investigate issues which are deeply political in that they involve contentious policy choices and are conditioned by political institutions. Topics to be studied in this new theme include the implications of globalisation and economic crises for voter preferences in different types of economy and taking account of variations between potential ‘winners’ and ‘losers’ regarding market integration, redistribution and welfare spending, as well as much more detailed investigation of the dimensions of the responses available to CMEs and LMEs.