Joseph Wong in chapter 3 of this book examines the gradual change of three Asian states namely Taiwan, Japan and Korea from developmental states to states that care for the welfare of its citizens. He examines the post war period, the decade of 1980’s and the period of 1990’s with a view of demonstrating the change that occurred. He makes the case that the three states engineered social welfare policies after the 1990’s contrary to expectations. This review seeks to explore the change and a reflection of these changes as enumerated by Wong. Further, the review shall explore the questions that arise in this context and express a personal opinion over the same questions.
It appears that the states in East Asia namely Taiwan, Japan and Korea shifted their policy from being developmental states to welfare states in the post war period. The nations are credited for showing great resilience and recording strong performance in the economy in the period after the war. The states have also been lauded for the shift from being welfare state laggards to being welfare oriented. It is the case that the three states overly focused on development at the expense of showing concern and supporting the vulnerable in the society in the period preceding the war. This pre-war period was characterized by these countries placing high premium on aggregate growth which was achieved by investing in industrialization. They lost sight of the fact that all persons are not economically endowed to be able to sustain themselves and they thus require some intervention or aid by government. There was absence of social programs during this period which left the poor, more vulnerable.
Instructively, the social policy regimes present in these countries was predicated on the Bismarckian welfare state system where the countries adopted socio-insurance schemes. This surely does not act to help the very vulnerable who have little or no income. On reflection, such a scheme tends to relegate the vulnerable even further down the drain. This is because a social insurance model is not the normal welfare program provided by government through taxation. Rather, in a social insurance scheme, the responsibility of paying insurance premiums is placed on the individual. For instance, take the case where the individual required to pay these premiums is a destitute whom the scheme is intended to secure and protect. The upshot of such a program is that it tends to fail the same people even the more. Such schemes only serve to benefit the well-off who can afford such a program to the exclusion of the vulnerable.
At the turn of the consequent 1990 decade, the states shifted from their development oriented approach and embraced social policies. The nations initiated social spending measures which were marked by an increase in such spending. An interesting perspective on the whole issue is the confounding of conventional wisdom that suggests that a welfare state is bound to lag behind economically. Contrary to this, this period was also marked by increase in economic growth. It is similarly peculiar that these states adopted social programs and policies without pressure from any strong leftist parties or strong labor movements. It is also remarkable that attempts to relegate social protection schemes that are in the states have been resisted at every moment.
A number of questions arise from this paper by Wong as to the shift of the states from developmental states to welfare states. The first question that emanates from this paper is the issue of whether a government should be concerned with welfare programs at the expense of development. It is often touted, and with much validity, that a nation bent on expanding its social programs and increasing social spending is likely to lag behind in economic development. This is for the simple reason that money that would otherwise be spent in investing in development is channeled to initiating social programs. The period preceding the 1990’s in East Asia was characterized by low level of social spending with a focus on economic development.
Nonetheless, at the turn of 1990, Taiwan, Japan and Korea tremendously increased their social spending levels and initiated other programs aimed at securing the vulnerable. In answer to the question, it is important to examine the background against which the three states transformed into being welfare states. The three states experienced economic difficulties and instability in the 1990’s. In particular, Japan’s bubble economy burst, South Korea was hit by the 1997 Asian Financial Crisis while Taiwan faced strong competition from cheap produce from China. More so, there was a rise in unemployment levels in turn exposing more people to economic uncertainty. This situation necessitated the putting in place of social protection measures. A nation may turn its blind eye and deaf ear to the vulnerable in the quest for economic development. On the contrary, a nation may close its eyes to the development opportunities to be lost and initiate measures to protect its vulnerable persons. Both options have consequences. At a personal level, I hold the view that a nation should strive to be a welfare state so as to protect its vulnerable. It is the responsibility of government to ensure that its people, whether poor or rich, are well catered for. Just like the taxation system serves to redistribute wealth, so must a nation do through its social programs. In addition, continued neglect of the poor and the vulnerable is counterproductive in the sense that the vulnerable may engage in crime and other ills thereby negating the gains accrued from development.
Another question worth consideration relates to the socio-insurance model or scheme as practiced by the three states in the 1980’s and its efficacy. The three Asian states had social insurance schemes to serve the purpose of attending to the welfare of its people. This model also manifests in modern day through the taking of insurance schemes more so for the employed. Persons covered by such a scheme may receive say, medical care or education fee from the insurance provider. Nonetheless, questions abound over the efficacy of such a scheme in protecting a country’s vulnerable. Such a practice must be contrasted with the universal health care scheme initiated recently by President Obama which caters for all persons whether employed or not. It is also instructive that during this period, a majority of people in these states were either self-employed or unemployed. At an individual level, I would state that such a measure is inadequate for the simple reason that such a scheme only serves those people with an income. This is a contradiction of the very purpose of the program as the vulnerable are excluded.
The third question to consider is whether the institution of democracy in a nation has an effect on the transformation of a developing state to a welfare state? Wong argues that democracy does play a part in this transformation but only to a certain extent. It is my personal opinion which concurs with Wong’s that democracy is only a springboard to this transformation and no more. An examination of the three states reveals that democracy per se is inadequate in fuelling the transformation. Other democratic nations are still pursuing development oriented policies with little or cosmetic social policy programs. Several factors such as economic instability, ideological flexibility and economic capacity are responsible for such transformation.
