Deconstruction of the Welfare State: The Impact of Globalization and Technological Factors

Abstract

The article aims to investigate the processes of deconstruction of the institution of the welfare state under the influence of such new challenges as economic globalization and technological revolution. The study is based on the methodological tools of neo-institutionalism. Principal exogenous and endogenous reasons for the crisis of the welfare state institution are determined. Economic globalization and technological progress are designated as decisive factors conditioning the deconstruction of the welfare state. It is stated that irrespective of the welfare state model, nowadays they all are reformed towards the activation of a working-age person and the establishment of the state of social investments. Currently the configuration of the welfare state is specified by its commitment to stimulating competition and developing the self-initiative of citizens in terms of ensuring their own prosperity. It is highlighted that economic globalization and technological progress should not be considered exclusively from the standpoint of risks for the welfare state. These two factors are identified as stimuli for further evolution of the welfare state institution for the sake of its moving out of prolonged stagnation and preserving itself as a political institution, albeit in the upgraded model. Key words welfare state institution; deconstruction of the welfare state; economic globalization; platform economy; technological progress; Industry 4.0