Globalization and the Future of Social Protection
IMF Working Papers, January 1, 2000
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- Globalization and the Future of Social Protection
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Bibliographic details
- Authors: Vito Tanzi
- Published: January 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451842890.001
Summary thesis
- Social protection in industrial countries has been provided through regulations, tax expenditures, and public spending.
- The paper argues that globalization will affect governments’ ability to continue providing this social protection at the level of recent decades.
- The paper concludes that the welfare states need to look for alternative ways to provide social protection.
Mechanisms that will reduce tax revenue (as identified in the paper)
- Tax competition among jurisdictions.
- Ballooning electronic commerce.
- Increased mobility of the factors of production.
Projected impact on public finance and social protection
- These mechanisms will likely cause significant falls in tax revenue in future years.
- Reduced tax revenue undermines the existing mix of regulations, tax expenditures, and public spending used to fund social protection in industrial countries.
- The cumulative pressure from tax competition, e-commerce, and factor mobility implies that maintaining social protection at recent-decade levels will be increasingly difficult under current modalities.
Policy implications and recommendations
- Welfare states should look for alternative ways to provide social protection in response to revenue pressures from globalization.
- Implicit recommendation to reassess reliance on tax expenditures and revenue bases vulnerable to cross-border competition and digitalization.
- Necessity to consider structural or institutional reforms in social protection delivery consistent with reduced and more volatile tax revenue.
Globalization and the Future of Social Protection — Vito Tanzi, IMF Working Paper No. 2000/012.
Content in this bundle
- Globalization and the Future of Social Protection - WP/00/12