Preface and Introduction

“Globalization” has become the all-purpose cause of our troublesand opportunities. Among the basic questions about its impact on public policyand human welfare, two are of great interest to both scholars and policymakers:

1. Is the nation-state eroding as a unit of social-science analysis andas the center of political action?

2. Do capital and labor flows across national boundaries threaten thesocial and labor policies of the rich democracies – especially jobprotection and good earnings and welfare-state benefits, such asgovernment-guaranteed universal pensions and health insurance?

Because these questions assume that globalization gives countries with low laborcosts and lean social policies a competitive advantage over their rivals, wemust give an estimate regarding a third question:

1. Leaving aside the net contribution of the welfare state and laborpolicies to such values as dignity, security, equality, family well-being,social integration, and political legitimacy, what are the net effects ofthe welfare state, social policies, and job protection on productivity andeconomic performance?