The pursuit of growth. Growth regimes, growth strategies and welfare reforms in advanced capitalist economies

Abstract

In this article, we develop an analytical framework to study how economies and welfare systems have been adapted to the common challenges of post-industrialization, financialization, and the knowledge economy. We show that, despite the global interconnectedness of modern economies, national trajectories of growth and policy-making remain distinct. Our explanation focuses on the pursuit of different growth strategies in contemporary advanced capitalist economies. Growth strategies are in large parts welfare reforms. Governments use the policy tools of the welfare state such as employment policy, housing policy, pensions, minimum wages and education as facilitators for growth. They pursue them in different ways depending on the growth regime their economies are embedded in. The articles starts with an overview of two key concepts used to build our argument: i) the complementary relationship between national growth and welfare regimes and ii) growth strategies through which growth and welfare regimes are reformed in the new era of globalization, ICT and financialization driven growth. It then provides an overview of five main ideal-typical growth regimes that have developed in advanced capitalist economies: the dynamic services export-led growth regime, the high-quality manufacturing export-led, the FDI-financed export-led, the financebased domestic demand-led and the public-financed domestic demand-led ones. Finally, it analyses the ties between growth strategies and welfare reforms and thus identifies five main types of welfare state reforms strategies: dualization of welfare, social investment, fiscal and social attractiveness, commodification of welfare, and social protectionism. Within the Eurozone, because of external pressure, the latter strategy has been transformed into a «competitive impoverishment» strategy for Southern European countries.