Reassessing the relationship between globalization and welfare: Welfare spending and international competitiveness in less-developed countries

This thesis challenges the conventional wisdom that government welfare spending in his contemporary era of globalization must be sacrificed for the sake of improving international competitiveness. Using the panel data for 44 less developed countries (LDCs) and the fixed-effects methods, it is revealed that LDC fiscal policy choices do not adversely affect their competitiveness. Rather, it is international market conditions and the indiscriminate behavior of international investors that are stronger determinants of LDC's national competitiveness and, subsequently, their level of economic globalization.;These findings provide sufficient justification for scholars and policymakers alike to reassess their claim that welfare state spending is inefficient and erodes a nation's competitiveness in global markets.