Abstract
Mason M.S. Kim’s work is a perceptive analysis of the unique nature of welfare arrangements in capitalist East Asia. The book aims to refine the dominant theoretical framework of ‘productivist welfare capitalism’ proposed by Ian Holliday in view of the continuity and change in contemporary East Asia.
Scholars have long held that East Asian states have an overwhelming policy bias in favour of economic development and human capital formation (the productive component of welfare) than social welfare benefits (the protective component of welfare). However, the single-lensed productivist perspective is not comprehensive enough to account for the dynamism of East Asian welfare states. While exhibiting similarities as productivist welfare states, it is argued that East Asia has developed an institutional divergence within the productivist framework. The study covers both Northeast and Southeast Asia encompassing 11 countries (Japan, Korea, Taiwan, Hong Kong, Singapore, Indonesia, Malaysia, Philippines, Thailand, Vietnam and China). The intra-regional typology of productivist welfarism is arrived through a cluster analysis of the relevant dataset.
Identifying redistribution and market efficiency as ‘steering gears’ of policy doctrines, the author applies them as conceptual dimensions to measure the extent to which the East Asian welfare states vary institutionally. In order to understand the real scope and full nature of social protection, the study evaluates both expenditures and institutional design. Most East Asian nations adopt an optimal mix of social protection schemes ranging from government-financed, compulsory contributory to voluntary contributory in weaving a social safety net for the citizens.
Based on the empirical treatment of the relevant dimensions, the study uncovers three sub-types of productivist welfare capitalism going in three distinct directions––risk pooling, self-help or a combination of both. The first model is termed as inclusive productivist welfare (IPW). The expansion of social insurance schemes is regarded as an inclusive move to protect unskilled labour as the economy becomes more diversified. While eliciting an increase in government spending on redistributive strategies, the shift is nowhere akin to a Scandinavian type of welfare capitalism; the overarching goal is still economic development. The most prominent examples are Japan, Korea, Taiwan, Philippines and Thailand (1988–1992). The second type of productivist welfare capitalism is referred to as the market productivist welfare (MPW) model. The market-orientation reigns supreme in this type and efforts are directed to minimise governmental financial responsibilities for social protection. Highly open economies of Singapore, Hong Kong (2003–2007) and Malaysia have made use of this model of welfare in relying on individual savings schemes. The last type is the dualist productivist welfare (DPW) model. This sub-type involves the simultaneous adoption of both inclusive and market-oriented measures for social protection. The dualist welfarism generates the institutional fragmentation of social protection in nations with large formal–informal and rural–urban gaps. The formal sector workers and urban residents are protected by social insurance schemes while the informal-sector workers and rural dwellers are provided with individual savings plan or limited social insurance benefits. The cluster of nations includes China, Hong Kong (1988–1992), Indonesia, Vietnam and Thailand.
In examining the causal mechanism of the institutional varieties of the East Asian welfare regime, the author employs a cross-sectional time-series analysis to assess the influence of economic openness and political pressure. East Asian nations show divergence in terms of exposure to foreign investment and trade and the type of financial system, which makes them either market-distorting economies or market-conforming economies. The market-distorting economies are more or less immune from market fluctuations and thus only concerned with the protection of industrial workers against social contingencies. On the other hand, the market-conforming economies have the overwhelming need to maintain global market competitiveness which makes self-help measures of social security a more viable option. While economic openness may lead to adoption of divergent social policies, the expansion of social protection is driven by the democratic transition and the concomitant bottom-up political pressure that gives more agency to citizens in policy processes and changes the nature of governance from control to accountability. Democracies, being more vulnerable to political pressure, are more likely to use inclusive methods of social protection than their authoritarian counterparts.
The last section of the book looks at the qualitative case studies to substantiate further the quantitative analyses. The cases include Korea’s inclusive approach, Singapore’s market-oriented strategy and China’s dualist arrangement. The study reviews the institutional features of the social protection programmes in each country-case focusing on old-age pension and healthcare to delineate the pattern of risk-pooling and self-reliance. In addition, the political-economies of the three nations are examined to assess the influence of economic openness and political pressure on the formation of the particular variant of productivist welfarism. South Korea’s inclusive bent in social welfare is an outcome of the market distorting economic strategies and the gradual process of democratisation at the political level. Singapore’s social policy development explicates the market oriented welfare regime as a result of a high degree of economic openness and a relatively authoritarian political structure. In the case of China, the productivist world of welfare is epitomised in a dualist structure—inclusive (risk pooling through social insurance) and market-oriented (self-reliance through mandatory individual savings). The regional fragmentation economic development and political stability has reared a dualist response in terms of social protection.
In the concluding chapter, the author sifts through the prospects of the three-model typology coping amidst the forces of globalisation, inequality, unemployment, demographic transition and social instability. The galvanising effect of the new rising challenges is proposed to be mediated by domestic politics, the assessment of which is too early to predict but can stimulate meaningful and constructive future research.
In all, while the theoretical and empirical significance of the work in understanding the institutional variation in East Asian welfare states cannot be downplayed, the empirical testing seems more robust than the theoretical underpinning. Moreover, the appraisal of the theoretical sophistication of dominant theories on the subject is not only limited but also orchestrated to fit the argument. Nevertheless, the study has to be credited for its bold and innovative approach in unearthing the nuanced variations across a relatively less-studied regional grouping.