NEW welfare and inequality in marketizin

PREFACE While there has been great interest in East Asia’s economic performance and its implications for comparative political economy, attention to pat-terns of welfare and inequality i

Welfare and Inequality

in Marketizing East Asia

Jonathan D London

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PREFACE

While there has been great interest in East Asia’s economic performance and its implications for comparative political economy, attention to pat-terns of welfare and inequality in the region’s political economies has been largely conined to specialist academic and policy literatures While these literatures have vastly improved our understanding of patterns of welfare and inequality in East Asia, rarely have they done so in ways that inform comparative understandings of the region’s political economies or contribute to the theoretical development of comparative political econ-omy more broadly This book is premised on the assumption that wel-fare and inequality—and, more precisely, the mechanisms that generate them—are central to the analysis of comparative political economy and that an analysis of the recent history of welfare and inequality in East Asia can both enhance our understanding of the region’s political econo-mies and contribute to a more adequate theorization of welfare, inequal-ity, and comparative political economy in a variety of world historical settings

This book addresses the comparative political economy of East Asia

in the context of late 20th and early 21st century marketization—under-stood as an historic and dramatic acceleration in the world-scale expan-sion of markets and market relations that has gained force since the early to middle 1980s and which has transformed social life everywhere East Asia has igured centrally in this contemporary instance of marketi-zation This study traces the manner in which marketization has regis-tered across the region’s diverse social landscape and explores how it

London, J.D., 2018 Welfare and Inequality in Marketizing East Asia London Palgrave Macmillan

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has shaped welfare and inequality across the region It does so through

an approach that views contemporary East Asia’s political economies

as dynamic, globally-embeded social orders and embraces the spirit of Charles Tilly’s (1984) meta-theoretical explorations of “big structures, large processes, and huge comparisons.” Situated in the world-historical context of late 20th and early 21st century marketization, the book employs individualizing, universalizing, and variation-inding modes

of comparison to probe the dynamic properties of the region’s political economies as social orders in order to better understand how marketiza-tion—in combination with other factors—has shaped welfare and ine-quality outcomes within them

Until very recently, literature on the political economy of East Asia has reflected a narrow and by some accounts excessively “productionist” concern with the political economy of growth (or capital accumulation), and with such related concerns as trade and state capacities for indus-trial promotion In the aftermath of the global inancial crises of 1997 and 2008 literature on the political economy of East Asia has somewhat broadened its concerns, evidenced most strikingly by the increased inter-est in “governance” and, more speciically, the relation between institu-tions and economic performance over time

But not only this After decades of relative inattention to welfare and inequality, the crises of 1997 and 2008 have occasioned an increased attention to these themes, reflecting a belated recognition of their sig-niicance, both to development in general and to the “political economy

of hard times” the crises brought on in particular Indeed, since 2008

in particular, ‘social protection’ and ‘inclusive growth’ went from the status of buzzwords and (too often) policy afterthoughts to hegemonic discourses and policy agendas in the development ield reshaping, if not the underlying dominant ideas and practices, then at least the manner in which development is presented, represented, and promoted

The mounting concern with inequality, social protection, and inclu-sive growth in East Asia is warranted While marketization has been associated within certain gains in living standards, economic growth and the beneits it has produced have been highly unequal across and within countries In most of the region, magnitudes of inequality and the absence of adequate social protections appear to have been highly dam-aging, both to future growth prospects and the wellbeing of large shares

of the population

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PREFACE ix

By in large, the social protection and inclusive growth agenda has been embraced across the region, at least at a discursive level While states and ruling parties in the region are not equally committed to the promotion of welfare, promoting more inclusive economic growth and broad-based improvements in living standards typically feature among the core stated aims of East Asian regimes, regardless of their political orientation This reflects both the broad appeal and political maleability

of inclusive growth rhetoric At the same time, interests of East Asian regimes in inclusive growth and the challenges East Asian political econ-omies face today with respect to the promotion of growth and welfare are of a distinctly different nature than those that featured in debates about welfare state development This owes to vast differences both in their institutions and in the different circumstances, timing, and pace of their integration into processes and institutions of the rapidly changing global political economy

Despite its many contributions, literature on social protection and inclusive growth in East Asia does not offer a satisfying account of mech-anisms shaping patterns of welfare, inequality, and mobility in the con-text of marketization In part this stems from the tendency of the social protection and inclusion literature to view the world through the soci-ologically thin and politically anodyne market-irst standpoint of inter-national development agencies This results in ahistorical, apolitical, and undersocialized accounts that are by and large incapable of explain-ing the genesis, conduct, and outcomes of state policies Beyond this

we observe that East Asia states have promoted policies and discourses under the banners of social protection and inclusive growth to suit a wide range of purposes, and that the character and results of these efforts

do not always conform to stated aims More generally, the literature does not attend suficiently to the dynamic social properties of the local and global contexts within which social protection and economic policies and their outcomes unfold

The determinants of welfare and inequality within market economies

is, of course, the subject of a large specialist literature Within the schol-arly literature on social policy, literature on welfare regimes is of particu-lar interest as it has sought to illuminate properties, determinants, and effects of institutions governing welfare and inequality Largely cordoned off from more general debates on political economy, the welfare regime framework has nonetheless fostered a rich and often productive debate

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about the determinants of welfare and inequality across countries And yet welfare regime theory remains controversial

Preliminary extensions of welfare regimes concepts to East Asia that construed welfare institutions’ properties mainly as outgrowths of the region’s cultural features vastly overstated similarities across coun-tries while neglecting differences and understating other influential factors Later accounts of East Asia welfare regimes avoided these pit-falls, but soon appeared to repeat pathologies of the earlier literature

on European and North American welfare states, whether by painting excessively static and internally homogeneous representations of what are in reality dynamic and internally variegated institutional complexes

or by succumbing to the temptation of endlessly lumping and splitting the region’s political economies into putative ‘welfare regime types.’ In seeking to avoid these pitfalls, some analysts have taken a more general approach to comparison centred on the distillation of generic socioeco-nomic and institutional features of ‘meta-welfare regimes’ across wealthy, middle income, and income poor contexts While this approach has much to recommend, it effectively glosses over qualitative differences across countries, averting their eyes from mechanisms driving welfare and inequality outcomes in and across speciic historical settings

Still other analysts of welfare regimes have suggested the need for a

‘real typical’ (versus ideal typical) approach that is more concerned with the features of speciic countries than the generation of alleged welfare regime types This approach also has merits Indeed, the production of case studies of welfare and inequality remains indispensable to efforts to understand and explain experiences across countries And yet if our aim

is a comparative analysis, an ideographic approach trained on individual countries has obvious limits Such limits become especially salient in the context of efforts to understand and explain how social relations and processes occurring globally register across and within nationally-scaled political economies and its practical, methodological, and theoretical implications

As a political economy perspective focused squarely on the determi-nants and effects of institutional arrangements governing welfare and inequality, welfare regimes analysis retains analytic advantages over lead-ing approaches in comparative political economy, but its promise as an analytic framework requires that its explanatory aims not be subordi-nated to typological ones; that its sociological analysis be enhanced; and that its scope be broadened and deepened to better integrate an analysis

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of the political economy of the world market and its relation to social life in national and subnational spaces Seeking to build on the strengths

of welfare regimes analysis while avoiding its pitfalls, I call off the search for ideal-typical welfare regime types in favor of a more inductive and encompassing approach trained on the manner in which welfare and ine-quality are produced in speciic historical settings

On the whole, despite a growing interest in institutions, welfare, and inequality, and notwithstanding the many contributions of theoretical lit-erature on welfare regimes, we nonetheless lack a well-elaborated theo-retical account of the determinants of welfare and inequality in relation

to broader processes of social and institutional transformation associ-ated with marketization While case studies have shed light on how these processes have played out in speciic country contexts, we are missing a regionally-scaled view of how intersections of global, national, and sub-national forces have affected welfare and inequality across and within the region’s diverse political economies Recognizing the enormity of such

an account, this volume takes only preliminary steps forward in address-ing this gap

This book contends that a more adequate theorization of welfare and inequality in marketizing East Asia requires an encompassing approach trained on continuity and change in the social constitution of political economies Rather than replacing narrow analyses of the political economy

of growth with similarly narrowly-focused studies of welfare or inequal-ity, we can explore the manner in which the broad array of social relations and processes associated with marketization bear mechanisms underpin-ning growth, welfare, and inequality across time and place The typologi-cal search for ideal-typitypologi-cal “worlds of welfare” that has been at the centre

of the literature on comparative welfare regimes is jettisoned in favor of

an inductive approach focused on the dynamic attributes and development

of social relations within countries, understood as nationally-scaled social orders

This book construes East Asian countries as globally embedded and internally variegated social orders: dynamic, non-teleological social enti-ties organized on the basis of political settlements and inter-institutional regimes that more or less stably integrate processes and relations of dom-ination, accumulation, and social reproduction upon which the mainte-nance, reproduction, and potential transformation of political settlement depend The development of social orders does not follow a functionalist

or self-equilibrating logic While social life within social orders is subject

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to the influence of conditions and influences inherited from the past, the development of social orders—like all social life—is contingent The worldwide expansion of markets and market relations that form the con-text of this study provides a particularly interesting setting in which to explore how local and global processes, actors, and interests shape the development of social orders and the manner in which this acts on wel-fare an inequality Following such an approach, discussions of welwel-fare and inequality can be more readily integrated into the more general litera-tures on comparative and global political economy

This book explores how interests governing East Asian political econ-omies have aimed to cope with the challenges the expanding world mar-ket presents by training attention on the intersection of global, national, and subnational processes that shape politics, economic life, and welfare and inequality across political economies It is argued that across East Asia, political economies that may appear similar in terms of their social policies and their broad embrace of ‘productivist’ social policies, particu-larly when viewed from the perspective of isomorphic policy diffusion, are in practice governed by fundamentally different social logics owing

to the character of power relations and social domination that have governed these political economies and undergirded their institutional development from the colonial and anti-colonial periods, through the post-colonial period of state building, and up to the present era of mar-ketization These differences, I contend, produce distinctive welfare and inequality outcomes

Since the comparisons this book develops are admittedly large, it -pro-vides limited, stylized accounts of how social relations within countries and at the level of the global political economy have shaped political and economic institutions and social policy regimes over time It analyzes the development of social policy regimes and the implementation and out-comes of social policies themselves and places these developments within national and local contexts in broader regional and global political con-texts As for the interrelation between global and local: while global capi-talism is not new, virtually all analysts of political economy agree that the last three decades of its history have seen a marked uptick in the expan-sion and deepening of market relations Given East Asia’s diversity, it is not surprising that this process of marketization has registered differently across and within different political economies and has indeed varied in its effects on social life across countries

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This book is put forward as a broad statement of view As indicated in the title of the irst chapter, construing East Asian countries’ experiences over the last three decades as ‘great transformations’ is perhaps the most succinct way of both capturing the scale, scope, and signiicance of mar-ketization across the countries of East Asia while also reflecting the intents

of this volume, which is to generate insights into the political and eco-nomic determinants of welfare and inequality during a particular moment

in world history The irst six chapters of this second part establish the empirical and theoretical context and contribute to the critique and fur-ther development of theoretical perspectives on welfare and inequality, growth and governance, social protection and inclusive growth, welfare regimes, and properties of social orders The comparative analysis pre-sented in the second half of the book can be no substitute for insights of country specialists and does not pretend to be Instead, these studies pre-sent a irst iteration of a particular way of understanding and accounting for the determinants of welfare and inequality across and within countries Throughout, the book suggests ways analysts of comparative political economy, marketization, and welfare and inequality of different theoreti-cal persuasions can have a common debate about common interests Leiden, The Netherlands

October 2017

Jonathan D London

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CONTENTS

Part I Welfare, Inequality, and Marketization

1 Great Transformations 3

2 Welfare, Inequality, and Marketization 45

3 Welfare, Growth, and Governance 83

4 Marketization, Protection, and Inclusive Growth:

5 Rethinking Welfare Regimes 137

Part II Social Orders and Marketization in Process

6 Welfare, Inequality, and Varieties of Social Order 173

7 Developmental Welfare States?: Korea and Taiwan,

Hong Kong and Singapore 223

8 Welfare, Clientelism, and Inequality: Malaysia and

Thailand, Indonesia and the Philippines 269

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9 Welfare and Inequality in Market Leninism:

10 Afterword: Welfare and Inequality in

Marketizing East Asia 373

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