Political Economy Crisis

Eriko Francis^*
*Correspondence: Eriko Francis, Graduate School of Social Studies, New York, USA, Email:

Description

The aftermath of the global financial crisis put welfare states and other forms of capitalism to the test once more. Governments have been pushed to explore significant welfare reforms and execute flexibility-enhancing measures more than ever before in order to improve financial solvency and economic performance. However, the crash was not only a spatially unequal process in its inception, but it also resulted in haphazard or uneven policy responses. As a result, the downturn's socioeconomic effects and political responses differed significantly between countries. Nonetheless, some common trends in outcome metrics have emerged. The grouping of industrialized countries into distinct political and economic systems has been one of the most lasting themes of political economy research. The 'worlds of welfare' and 'varieties of capitalism' approaches, which are commonly referred to as 'worlds of welfare' and 'varieties of capitalism,' are founded on the premise that countries may be defined by the types and combinations of policies, institutions, and ideologies they utilize. The worlds of welfare method examines the level of decommodification, social stratification, and the roles of the state, market, and family in defining and responding to social needs, with a focus on distinctions in welfare state systems. The variations of capitalism approach highlights how different production systems provide different forms of comparative advantages, which serve to sustain divergent capitalism models.

Both typologies assume not only that developed countries can be classified into different types of welfare regimes and production systems, but also that each welfare or production model has a qualitatively different development trajectory, producing different types and degrees of outcomes when compared to other models, even during economic downturns. The research on route dependency emphasizes numerous paths of national development, institutional durability, and consistency. In layman's words, route dependence suggests that meaningful change gets more difficult to achieve as time passes. Path dependence is a term used in the political science literature to describe political trajectories that are resistant to change due to the self-enforcing character of institutions. Path dependence is a term used in comparative political economy to describe the persistence (inertia) of historically entrenched institutions, or the belief that differences in the size, structure, and outcomes of welfare regimes are a result of the individual route each one takes. Welfare states are seen as heterogeneous and resistant to change in this environment. Their development paths have been 'locked-in' over time, making it difficult to diverge from them, especially in the face of common external factors that some see as propelling all countries toward the same practices and outcomes. This has sparked a debate about whether welfare and production systems are convergent due to common forces, or whether the path-dependent feature of institutional evolution still exists. For many years, comparative welfare scholarship has used his typology to classify the welfare state along three dimensions: decommodification (the degree to which market dependency is reduced through state entitlements), modes of social stratification (the idea that different regime types manifest varying degrees of inequality), and the relationship between the state, market, and/or family in the production and management of social well-being (a balance that typically varies across countries). This classification scheme is supposed to allow us to identify dimensions of variation within welfare regimes, dimensions that are explicit and narrow enough to be operationalized in a comparison of three ideal welfare cases—the typical liberal, conservativecorporatist, and social democratic welfare regimes.

The liberal welfare state ensures that its residents have a basic level of social safety. This is done to make the most of market forces. In welfare provision, liberal regimes emphasize personal responsibility and deservingness of market assistance. As a result, benefits are minimal, social assistance is means-tested, and wage negotiating processes are decentralized, allowing the private sector to reach its full potential. Liberal regimes strive to ensure that everyone who is able to work does so and earns a living by participating in the free market. As a result, social policy aims to maximize market efficiency and individual autonomy. In this paradigm, a system of administrative surveillance monitors and enforces social assistance eligibility determinations. The liberal welfare state ensures that its residents have a basic level of social safety. This is done to make the most of market forces. In welfare provision, liberal regimes emphasize personal responsibility and deservingness of market assistance. As a result, benefits are minimal, social assistance is means-tested, and wage negotiating processes are decentralized, allowing the private sector to reach its full potential. Liberal regimes strive to ensure that everyone who is able to work does so and earns a living by participating in the free market. As a result, social policy aims to maximize market efficiency and individual autonomy. In this paradigm, a system of administrative surveillance monitors and enforces social assistance eligibility determinations. Economic downturns present problems and limits that are distinct from, and maybe more significant than, other pressures on the welfare state. Economic crises, on the other hand, tend to affect countries differently due to varying political-economic capacity and welfare regime vulnerabilities to external shocks. In many nations, there was a unidirectional convergence toward bad outcomes in the post-crisis period. It's not impossible, though, that the type of welfare or production regime makes a difference [1-5].

Conflict of Interest

None.

References

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