## Globalization and the Future of Social Protection

_IMF Working Papers, January 1, 2000_

## Source details

**Canonical URL:** [Globalization and the Future of Social Protection](https://www.imf.org/en/publications/wp/issues/2016/12/30/globalization-and-the-future-of-social-protection-3412)

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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

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### 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.*

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## Content in this bundle

- **Globalization and the Future of Social Protection - WP/00/12**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/globalization-and-the-future-of-social-protection-3412_