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THE GLOBAL CRISES AND THEIR IMPACT- The Future of Welfare State. Juho Saari Professor University of Kuopio, Finland juho.saari@uku.fi. I. DIFFICULT TIMES. The global recession is becoming more likely regardless of stimulus packages.

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the global crises and their impact the future of welfare state

THE GLOBAL CRISES AND THEIR IMPACT- The Future of Welfare State

Juho Saari

Professor

University of Kuopio, Finland

juho.saari@uku.fi

(c) Juho Saari 2009

i difficult times
I. DIFFICULT TIMES
  • The global recession is becoming more likely regardless of stimulus packages.
  • It will last at least three to four years, and will result in major adjustment in employment and industries.
  • Massive social costs of creative destruction and economic transformation .
  • But the majority of individuals and companies will probably survive intact - the winners will be better-off.
  • A few good news in the field of social development.

(c) Juho Saari 2009

2 the challenges of public economies
2. THE CHALLENGES OF PUBLIC ECONOMIES
  • Excessive public deficits in most advanced societies/economies - but not everywhere, indicating major shifts in a global system;
  • Public economies in additional heavy debts for 10-20 years.
  • The crowding out of social expenditure and ODA of public expenditure in many growth-oriented economies/societies.
    • Fiscal stimulus, national innovation systems, growth and employment policies, education
    • Tax cuts? (we are all Keynesians now)
  • The collapse or cut-throat competition of the charities.

(c) Juho Saari 2009

3 this can be a window of opportunity
3. THIS CAN BE A WINDOW OF OPPORTUNITY
  • The recession also means opportunities. Q: who shall be able to exploit this opportunity socio-politically?
    • How to protect ODA and social expenditure?
  • At least temporarily changing the balance of power in capitals and the BW institutions between different policy proposals.
  • The state will invervene and regulate financial markets and some industrial sectors more efficiently, and will become a major shareholder in many industries.
  • Historical evidence indicates that the rapid world systems, socio-economic and institututional transformations stimulate new thinking in social development.

(c) Juho Saari 2009

4 a case of finland a successful adjustment of comprehensive social policy is possible
4. A CASE OF FINLAND:A successful adjustment of comprehensive social policy is possible.

(c) Juho Saari 2009

5 reinventing the wheel i a policy paradigm for social development
5. REINVENTING THE WHEEL I - A policy paradigm for social development
  • A semi-new paradigm in development thinking on the institutional design of the markets and public policies: focus on adaptive efficiency.
  • In advanced economies (at least) national models with policy complementaries are quite path-dependent structures - one size/policy package does not fit for all.
  • Something to learn?: Scandinavian models are (still) effective in combining competitiveness, sustainable development, employment, and social cohesion.

(c) Juho Saari 2009

6 reinventing the wheel ii agenda setting for social development
6. REINVENTING THE WHEEL II - Agenda setting for social development
  • POLICY COORDINATION: Flexicurity - labour relations, active labour market, life-long learning, social policy
  • LONG TERM-THINKING: Life cycle approach revisited - distribution over a life cycle with a stronger redistibution towards families with children.
  • UNCERTAINTY - families, labour markets, housing, and indebtedness.
  • PROPERTY RIGHTS : Asset based social policies - New sources of resources to households.
  • SUBJECTIVE WELL-BEING: Focus on relative differences and competition.

(c) Juho Saari 2009

7 reinventing the wheel iii framing new policies
7. REINVENTING THE WHEEL III - Framing new policies
  • It matters how people and organisations interpret new policies.
  • How policies are frames is crucial for positive feedback and trust.
  • Common policies need coherent messages from the ministries of social affairs to the ministries of finance, and in-between the regional and global institutions.
  • Strong connections to sustainable development policies.

(c) Juho Saari 2009

as an example how to promote subjective well being
As an example, how to promote subjective well-being
  • More positive expectations to limit the impact of adaptive preferences.
  • Smaller social differences to limit the rat race.
  • More legitimacy of social policy institutions to allow flexibility.
  • More trust towards the government to make reform-making possible.
  • More voluntary work to support social connections.

(c) Juho Saari 2009

thank you
THANK YOU

(c) Juho Saari 2009