New contexts, different patterns? A comparative analysis of social spending and government health expenditure in Latin America and the OECD

Abstract

Much of our knowledge of the development of the welfare state centers on historical contingencies that characterized the industrial, political, and demographic context of Western Europe and North America. However, young welfare states in developing countries are emerging in response to different pressures than those faced by early welfare state; while globalization influences both young and established welfare states. Using newly released data for Latin America, this article provides a systematic comparison of social spending, spending on welfare and social security and government health spending in the OECD and Latin America and the Caribbean in the 1980s and 1990s. Results from cross-section time-series models indicate that the logic of industrialism welfare state approach is useful for examining social spending in Latin America. Namely, unemployment is associated with higher levels of social spending and spending on welfare and social security in both regions while a larger proportion of elderly population is associated with higher spending in Latin America. Globalization in the form of trade openness is associated with lower spending in the OECD across outcomes. In Latin America and the Caribbean the presence of international financial institutions powerfully pattern health and social spending: decreasing spending on welfare and social security and increasing health spending.