Should Countries Engage in a Race to the Bottom? The Effect of Social Spending on FDI

This paper examines the effect of social spending in developing countries on foreign direct investment (FDI). Existing studies on the race to the bottom in social services attempt to discern the extent to which FDI affects social expenditure. However, it remains an open question whether FDI is actually attracted to lower spending levels. We find no indication that FDI is repelled by social spending; indeed there is strong evidence that investment is associated with greater programmatic emphases on health and education. These findings have important implications for leaders seeking to attract investment and for those attempting to expand social programs.

The Tea Party and Social Movements

The recent rise of the Tea Party movement has added a new dimension to our discussion of domestic politics. The main question is: what effect will the Tea Party have on the political landscape? The best way to answer this question is to place the Tea Party in historical and theoretical context, in order to discuss what type of social movement the Tea Party is and what impact it might have. To this end, I will define and discuss the two major literatures in socialmovement theory: Issue Evolution and Political Process theory. This theoretical framework will provide the basis for a more concrete definition of the Tea Party movement itself. I will attemptto define the Tea Party movement based on its demographics, goals and political successes and will discuss it within the context of this theoretical framework. In addition, I will discuss four landmark social movements within our country’s history through the lens of the theoretical framework. I have found that successful movements rely on a combination of internal organizations and networks and external political opportunities to achieve and maintain nationalrelevance. In the end, I will come to the conclusion that the Tea Party will not likely have a major lasting impact on the political arena. It lacks key parts of the internal structure that makes some movements, such as the Civil Rights movement, so influential. But in the short term it will succeed in pushing the Republican Party towards a more fiscally conservative position.

A Historical-Institutional Study of the Welfare Systems in the United States and Sweden: Net Social Wage Approach

In this study I first look at the historical developments of the welfare systems in Sweden and the United States to understand why these countries have produced two distinct systems over the years. After understanding their historical context I turn to the question of the relationship between the welfare system and economic growth. Policy makers and the mainstream media commonly cite the critique that through government deficit and public debt, welfare systems are a drag on the economy. By calculating the net social wage, the difference in taxes paid and benefits received by workers, I test this hypothesis to see if welfare systems are self-financed by the workers. My findings demonstrate that the net social wage has been negative in the U.S. from 1962 to the early 2000s and in Sweden from 1965 to 2012. This shows that the welfare systems are entirely self-financed by the workers for the full period in Sweden and until the recent financial crisis in the U.S.