Jahn Detlef

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Detlef, Jahn. 2006. Globalization as ‘Galton's Problem’: The Missing Link in the Analysis of Diffusion Patterns in Welfare State Development International Organization 60(2):401-431. pdf. ‘Galton's Problem’, first explored by anthropologists and statisticians in 1887 and not solved until the 1990s, is a problem everywhere in the social sciences and the natural world, where things are not rigid or controlled, as in experiment, but interactive. Without this idea, of interactive or social processes, you cannot grasp what is going on in our world, at every level. Until recently, anthropology has retreated from this problem, falling back on our subjectivities to try to understand what we study.

This is a reading cited in DRW's - Human Social Complexity and World Cultures 2009 course.

Problem and data: (The example of) Globalization and Social Welfare in advanced economies

Detlef argues that globalization is a diffusion process that needs to be taken into account in cross-national studies, and is usefully studied with recourse to Galton's problem and autocorrelation techniques for including diffusion effects in testing hypotheses. He studies the social expenditures of welfare states in the "EU member states" (except Spain, Portugal, Greece, Luxembourg, and Austria) along with Switzerland, United States, Canada, New Zealand, Australia, and Japan. "Austria and Norway were excluded because no sufficient expenditure data is available for the 1980s." Imputing the data for these two countries, as in similar investigations, "is problematic in this case because predicted values would smooth the trends for the 1980s, which in turn would bias the results in favor of my argument." (DRW: This is not the case in the methods we will use in Anthro 174AW). "However, analyses conducted with these two countries came to similar results. I excluded Spain, Portugal, Greece, Iceland, and Luxembourg because they were missing numerous data, and because they were not considered in most of the other established studies in the field" (Detlef: p. 413).

Prior views by other authors

Conclusions on welfare spending trends from other authors are given (p. 405):

“it is clearly the case that by most measures of social welfare spending, programmatic characteristics (e.g., social insurance replacement rates) and public-private mixes, the welfare states of advanced democracies have not been dismantled or dramatically retrenched.”
“the conventionally hypothesized globalization dynamics are absent. Internationalization has no systematic impact on welfare policy change.”
Huber and Stephens also confirm this general pattern but see some indicators in specific areas of retrenchment in the second half of the 1990s

"However, do these statements hold true when one continues the analysis beyond the early 1990s?"

Three models for hypotheses set out tested by Detlef

Detlef tests the following empirically, taking into account a measure of globalization as diffusion (p. 403), i.e., degree of reorientation of policymaking and marketing actors in interactions between states (p. 404):

The efficiency hypothesis is that increasing globalization pressures states to stay competitive in the world market, i.e., a race to the bottom in social expenditure.
The compensation hypothesis is the opposite: governments are forced to compensate those affected by internationalization.
The convergence hypothesis, compatible with efficiency but not compensation, is that domestic policies become more similar: the economists' law of one price.

Findings

Without appropriate measures for Galton's problem (interstate network interactions that very through time)

None of the variables held to affect changes in social expenditures are significant except for economic shocks and volatily of expenditures, i.e., changes without trends.
Adding autocorrelation for the shift to openness, shown for 1990-1993, economic shocks are no longer predictive, but volatility in trade, unemployment and pensions are predictive along with weakness in left parties and corporatism. This is a period when spending goes up.
Similarly for the shift to turbulance after 1993 except that volatility in unemployment drops out as a predictor.
Prior to these two periods, the crisis of the early 1980s, by contrast, is one of retrenchment. Then there follows an upturn in spending (1990-93) followed by a downturn (1994-2001).

Doug 13:34, 24 September 2009 (PDT) Students ! please add comments

Conclusions

The trends, given autocorrelation, are:

path dependency before the breakpoints (1990 and 1993)
convergence after

And

Support for the efficiency hypothesis: interaction pressure no longer leads to increasing social expenditure after the breakpoints but the opposite (decreasing expenditure: social expenditure is severely cut).
The impact of parties that once supported welfare state spending is reversed by the turning points.
The EU variable per se has no effects, as do Corporatism and Veto Points for consensus democracies.

Diffusion and functionality as causal

"Comparativists ignored the role of diffusion too often." (p.46)
"Previous analyses of globalization have concentrated on its functional consequences and have produced ambiguous findings. Treating globalization as a form of diffusion shows that it has increased significantly during the past two decades. This in turn illustrates a new logic of politics of industrialized nations: international, not domestic, imperatives increasingly determine social policy. When one evaluates the impacts of three potential break points, it becomes clear that retrenchment, which took place before the mid-1980s for most of the OECD countries, is not correlated with diffusion and globalization. The other two break points come to rather similar conclusions: they indicate that diffusion (and therefore globalization) became relevant after the respective break points." (p.46-47)
"...globalization has a systematic impact on domestic policy."
"An entirely functional analysis is blind to the impact of diffusion, but an analysis that postulates the primacy of diffusion is unable to identify and specify

functional impacts. Only a combined analysis of function and diffusion is able to identify the relationship and relevance of both factors.

"The findings of this article clearly confirm a trend in social expenditure that favors the “race to the bottom” hypothesis+ The concept of diffusion, however, merely implies that individual governments became similar to each other in their social spending. It does not imply a universal decline of the welfare state. In principle, diffusion can also work in the other direction."

Commentary in hindsight

Diffusion did also work in the other direction in the 2008 election of Obama. The causalities here -- what affects social welfare -- are subject to change and to Galton's problem effects of autocorrelation (interactions among actors and social units) that may shift from path dependency to convergence under pressure of globalization and back to divergence as globalization passes an implosive breakpoint.