paper

Population Health in a Globalized World:
How the Future will not be like the past … and why it matters
Ted Schrecker (tschrecker@sympatico.ca)
Institute of Population Health, University of Ottawa, Canada
Presented at Annual Convention of the International Studies Association
San Francisco, March 2008
DRAFT ONLY: This paper is a work in progress. Comments are actively encouraged, but
please do not quote or cite without the author’s agreement
1. Introduction: The Best of Times, the Worst of Times?
Today’s world is characterized by dramatic disparities between the health of people in rich and
poor countries. In Canada, just six children out of every 1,000 can expect to die before the age
of five; in the low-income countries where 2.4 billion people live, the figure is 114 children out
of every 1,000. In Canada, the lifetime risk that a woman will die from complications of
pregnancy and childbirth is one in 11,000; in Niger, one of the world’s poorest countries, it is
one in seven (Say, Inoue, Mills & Suzuki, 2007).
Many such disparities can be traced to economics, starting with access to health care.
Low-income countries spend just $24 per person per year on health care, while in high-income
countries the figure is almost $3,700 (Health, Nutrition and Population Group; accessed Dec. 31,
2007). Although the importance of access to health care must never be underestimated, it is just
part of the picture. Emerging understandings of social determinants of health – conditions of life
and work that make it relatively easy for some people to lead long and healthful lives, and all but
impossible for others – show that inequalities in access to health care are strongly congruent
with health-destroying lack of access to other basic needs. According to United Nations figures,
more than 800 million people are chronically undernourished, and the World Bank estimates that
roughly a billion people live in absolute poverty. The interaction of multiple forms of
deprivation underscores the wisdom of the observation “that many of the most devastating
problems that plague the daily lives of billions of people are problems that emerge from a single,
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fundamental source: the consequences of poverty and inequality” (Paluzzi & Farmer, 2005): 12).
The development, poverty reduction and global health agendas therefore should be regarded as
inextricably linked and interdependent.
Some reassurance can be found in recent policy developments. According to UNAIDS,
in just the three years from 2003 to 2006, the estimated number of people receiving ART in lowand
middle-income countries quintupled, from 400,000 to just over 2 million; in sub-Saharan
Africa, where the need is greatest, the number of recipients of ART increased 13-fold (UNAIDS,
2007). This is a success story the life-saving significance of which must not be neglected.
Development assistance for health rose from approximately $2 billion in 1990 to $12 billion in
2004, the most recent year for which figures are available (Schieber, Fleisher & Gottret, 2006).
Reassurance could be found, as well, in adoption of the Millennium Development Goals and
associated targets: “the world’s biggest promise” (Hulme, 2007). Three MDGs are explicitly
health-related, and four others directly address crucial social determinants of (ill) health. In
2005, two high-profile syntheses of research evidence on development policy each called for an
approximate doubling of development assistance spending in order to improve the prospects for
achieving the MDGs (Commission for Africa, 2005; UN Millennium Project, 2005). At the very
least, these two reports and Sachs’s subsequent analysis of the savage arithmetic of government
budgeting in low-income countries (Sachs, 2007) should have lifted the burden of proof from
those who advocate increased resource transfers from rich countries to poor, placing it instead on
sceptics who invoke the limited “absorptive capacity” of recipient countries or insist that health
systems and social provision must be “sustainable” in the sense that they do not rely on external
resources. The Millennium Project, in particular, went further: for instance, linking “poverty
traps” that inhibit national development to such macro-level variables as the continuing
inadequacy of external debt cancellation and lack of developing country access to export markets
in the industrialized world. Establishment of the Commission on Social Determinants of Health
(CSDH) by the World Health Organization (WHO) in 2005, and the Commission’s focus on the
explicitly normative concept of health equity, can be read as indicating a long-overdue
recognition that the Organization must move beyond the biomedical model and the provision of
advice by physicians to active engagement with social and economic policy, in the spirit of its
much-neglected constitutional and historical commitments (Brown, Cueto & Fee, 2006).
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On the other hand, I still spend a great deal of time slowly and carefully explaining why
poverty, however defined, and economic insecurity are hazardous to health, to people who are
themselves at zero risk of those conditions. (I do not repeat the explanation here.) After
development issues, African development in particular, occupied centre stage at the G8 Summit
in 2005, they lost much of their salience; a Council on Foreign Relations Task Force commented
approvingly in 2006 that, post-Gleneagles, “humanitarian interests” have been supplanted by
such concerns as energy security and terrorism. If these aren’t invoked, the Task Force warned
ominously, it will be “exceedingly difficult, in the face of growing budget pressures in the
United States, to maintain and deepen promising commitments for development, HIV/AIDS, and
security initiated in the past several years” (Lake, Whitman, Lyman & Morrison, 2006). (The
fact that those budget pressures exist because of the Bush government’s simultaneous pursuit of
a ruinously expensive foreign war and tax cuts for the ultra-rich went unacknowledged.) Many
recent assessments conclude that the MDGs and associated targets are unlikely to be met, most
conspicuously but not only in sub-Saharan Africa (Wagstaff, Claeson et al., 2003; United
Nations, 2007). The MDGs, while ambitious when viewed against the background of past
development policy, are modest when measured against the scale of unmet health-related basic
needs.1 And in several cases, achieving the Goals on the basis of national averages might still
mean little or any improvement in the situation of the worst-off groups within a particular society
(Gwatkin, 2005; Moser, Leon & Gwatkin, 2005).
Here I do not assess the substantive adequacy of recent efforts to integrate the
development, poverty reduction and global health agendas; these assessments have been
provided elsewhere (see e.g. Schrecker, Labonte & Sanders 2007; Labonte & Schrecker, 2007a;
Labonte, Schrecker & Sanders 2008). Instead, I take a future-oriented approach to the prospects
of those agendas, reflecting on some of the findings and conclusions of the Globalization
Knowledge Network that supported the work of CSDH.2 I start from the premise that
1 The MDG poverty reduction target involves reducing by half between 1990 and 2015 the proportion of
the world’s people living below the World Bank’s contentious $1/day poverty line (actually, about $1.50
in today’s funds). Philosopher Thomas Pogge (2004) has commented on the modesty of this target when
viewed against a background of expanding global affluence. Another MDG target involves improving the
lives of 100 million slum dwellers per year by 2020, yet it is estimated that if present trends continue, 1.4
billion people worldwide will be living in slums in that year (UN Millennium Project Task Force, 2005).
2 I served as Hub coordinator of that Network and was one of the authors of its final report (Labonte et
al., 2007). However, all views expressed here that are not clearly attributed to cited authors are
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globalization, defined as “a process of greater integration within the world economy through
movements of goods and services, capital, technology and (to a lesser extent) labour, which lead
increasingly to economic decisions being influenced by global conditions” (Jenkins, 2004: 1), is
a central element of the international and domestic policy environment. Sections 2 and 3 of the
paper are primarily descriptive: I argue, based only on a subset of the available evidence, that
what we know about globalization suggests not only a future of increased inequality and
polarization of income, wealth and economic opportunities within and across national borders,
but also serious constraints on policy initiatives that would compensate for globalization’s
polarizing tendencies. Section 4 is more analytical and also more tentative: I consider the
political plausibility of the Globalization Knowledge Network’s core policy prescription for
“redistribution, regulation and rights” as a necessary check on the unfettered operations of the
global marketplace, providing the outlines of an agenda for future research that incorporates not
only the dynamics of globalization at a supra-national level but also the less carefully studied
impact of globalization on changing allegiances and distributions of resources at the level of
domestic politics. Section 5 concludes, rather pessimistically.
2. Is Globalization Good for You?
It has been claimed that “globalization is good for your health, mostly” because countries that
integrate into the global economy more rapidly (e.g. through trade liberalization) experience
more rapid growth and are therefore better able to reduce poverty (Feachem, 2001). This
argument has numerous and well documented weaknesses (for a summary see Labonte &
Schrecker, 2007b). Globally, progress toward poverty reduction remains modest against a
background of unprecedented abundance and the definition of poverty usually adopted for
purposes of measurement, the World Bank’s $1/day and $2/day poverty line, is regarded as
seriously inadequate by many observers (Chen & Ravallion, 2004; United Nations Economic
Commission, 2004: 76; Kawachi & Wamala, 2007). Even using the World Bank’s contentious
thresholds, poverty increased substantially in sub-Saharan Africa during the 1980s and 1990s.
exclusively my own and not those of the Network’s members, the Commission on Social Determinants of
Health, or WHO.
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Admittedly, some countries such as Vietnam and China have achieved impressive growth
rates and poverty reduction track records while opening their borders to imports and foreign
investment and rapidly deregulating domestic markets. However, they and other fast-growing
Asian economies were selective about the process of economic integration, and retained a
considerable degree of state control over economic development. Conversely the growth
performance of Latin American economies, many of which were the most enthusiastic adopters
of neoliberal economic prescriptions, was weaker after 1980 than during the preceding “era of
import substitution, protectionism, and macroeconomic populism” (Rodrik, 2007), and poverty
in Latin America, measured with reference to actual in-country costs of meeting nutritional
needs, was more widespread in 1999 than in 1980 (United Nations Economic Commission,
2004: chapter 1; Sáinz, 2006). The Chinese and Vietnamese experiences further show that
marketization of the domestic economy has drastically increased the cost of health care, and
reduced accessibility, for much of the population (United Nations Country Team Viet Nam,
2003; Akin, Dow & Lance, 2004; Akin, Dow, Lance & Loh, 2005; Sepehri, Chernomas &
Akram-Lodhi, 2005; Dummer & Cook 2007; Meng 2007). Indeed, economic growth has proved
a remarkably ineffective mechanism for reducing poverty (Woodward & Simms, 2006).
An innovative econometric exercise that studied relations among globalization, growth
and health using data from 136 countries was commissioned for the Globalization Knowledge
Network (Cornia, Rosignoli & Tiberti, 2007). The authors first identified five main influences
on mortality, the most basic (ill) health outcome: material deprivation; psychological stress;
unhealthy lifestyles; inequality and lack of social cohesion; and technical (i.e., medical) progress.
They then identified a range of variables that affect these influences, classifying the variables as
either (a) related to policy choices made in the context of globalization (e.g. GDP growth,
income distribution, immunization rates); (b) endogenous, and therefore unrelated to
globalization for purposes of the analysis (medical progress); or (c), describable as “shocks” (e.g.
wars and natural disasters, HIV/AIDS). The final stage of their analysis consisted of a
simulation that compared trends in life expectancy at birth (LEB, the most basic population
health indicator) over the period 1980-2000 with those that would be predicted based on a
hypothesized counterfactual set of assumptions in which trends in all the relevant variables did
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not follow the actual 1980-2000 pattern, but rather remained at the 1980 value or continued the
trend they followed over the pre-1980 period.3
The simulation indicated that, on a worldwide basis, over the period 1980-2000 effects of
globalization cancelled out most of the progress toward better health (as measured by LEB) that
was attributable to the diffusion of medical progress. The effects of shocks (wars, natural
disasters and AIDS) combined with globalization to result in a slight worldwide decline in LEB
as compared with the counterfactual. Regionally, the most conspicuous declines in life
expectancy relative to the counterfactual occurred in the transition economies and the former
Soviet Union (where globalization accounted for essentially the entire decline) and sub-Saharan
Africa (where globalization contributed almost as much as the AIDS epidemic to a decline of
nearly nine years in LEB, despite the benefits from medical progress). It can be objected that the
diffusion of medical progress is at least partly a consequence of globalization, rather than an
endogenous variable; in other words, that the analysis overstates the negative consequences of
globalization. However, trends like the decline of access to health care in China and Vietnam
and the stagnation of immunization rates in sub-Saharan Africa, affected by such phenomena as
declining commodity prices, debt crises, and structural adjustment conditionalities, suggest that
the diffusion of medical progress may be occurring in spite of globalization rather than because
of it. Conversely, the treatment of HIV infection as a shock analogous to natural disaster can be
seen as problematic, because of evidence linking vulnerability to HIV infection with
globalization by way of (a) poverty and economic insecurity (Wojcicki & Malala 2001;
Wojcicki, 2002; Schoepf, 2004; De Vogli & Birbeck, 2005) and (b) precarious income increases
experienced in conjunction with global diffusion of Western fashion and consumer goods
(Smith, 2000; Luke, 2005; Stoebenau, 2006; Mishra et al., 2007). Use of life expectancy rather
than more nuanced data on illness and quality of life also introduces uncertainties, although these
are unavoidable given data limitations. The authors admit the problems associated with lack of
data and selection of globalization-related variables and data sets, warning that “the
establishment of a causal nexus between globalization policies and health cannot be but
tentative” (Cornia et al., 2007: 1). Nevertheless, the study represents a highly credible challenge
3 Thus, it was assumed in the counterfactual (for instance) not only that income distribution within
countries, one of the globalization-related variables, did not change over the period 1980-2000, but also
that there was no progress in medical technology and that HIV incidence remained at its 1980 level.
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to the macro-level story about globalization’s health benefits, notably including those in the
“growth superstars,” India and China (Cornia et al., 2007: 27).
3. “Disequalizing” globalization: labour markets and financial markets
A valuable starting point for this discussion is provided by Birdsall’s observation that “global
markets are inherently disequalizing” and their operations are “asymmetrical” in several ways,
favouring those individuals and countries already well endowed with assets and able to use their
resources to shape the rules of the international economic order (Birdsall, 2006: 18-32) . Birdsall
was primarily concerned with trade policy, but the observation is applicable to all globalization’s
channels of influence. Here I discuss only two: globalization’s transformation of labour markets
and the growing disciplinary power of financial markets. My intention here is not to describe the
full range of pathways by which globalization increases disparities in access to social
determinants of health, which in a preliminary way has been done elsewhere (Labonte &
Schrecker, 2007c), but to combine selective description with an indication of how constraints on
policy initiatives to reduce those disparities may be intrinsic to the processes in question.
A genuinely global labour market is gradually emerging (World Bank, 1995; World
Bank, 2007b), as production is reorganized across multiple national borders, in networks that
now involve not only the multiple subsidiaries and affiliates of transnational corporations
(TNCs), but also contractual relationships with external suppliers and service providers
(‘outsourcing’): what might be called the Nike model (Donaghu & Barff, 1990; Barff & Austen,
1993). The result is an increasingly fine-grained process of “slicing up the value added chain”
(Krugman, 1995) in production networks that locate each step of the process where it contributes
most to overall returns while reducing risks (Sturgeon, 2001). To understand the logic and the
importance of this process contrast it, as Krugman does, with Ford Motor Company’s iconic
River Rouge plant where every step of the process of manufacturing an automobile from
steelmaking to final assembly was carried out at a single location. Today’s automobiles, and
many other manufactured products, are likely to contain components and subassemblies
manufactured in a multitude of countries, often by firms with no relation to the parent company
beyond a time-limited contract (Sturgeon, 2002; Dicken, 2007: 278-346). The World Bank
warned at the end of the 1990s that the “open production environment” created by global
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reorganization of production “mercilessly weeds out those centers with below-par
macroeconomic environments, services, and labor-market flexibility” (World Bank, 1999: 35-36,
50). Among the centres subjected to such weeding: northern Mexico, which lost some 300
export-oriented manufacturing plants to China between 2001 and 2003 (Anon., 2003). An effect
of particular importance is the concentration of power among firms at the top of buyer-driven
commodity or value chains, which can appropriate much of the value generated in the production
process while forcing suppliers to compete against one another, often on the basis of their labour
costs. This model is most closely associated with the apparel industry, but is also evident in food
production and marketing and with respect to the operations of Wal-Mart, whose business model
is now distinctive enough to be a topic of research in its own right (see e.g. Ross, ed., 1997;
Faiguenbaum, Berdegue & Reardon, 2002; Gereffi, Humphrey & Sturgeon, 2005; Hearson &
Eagleton, 2007; Hays, 2003; Goodman & Pan, 2004; Appelbaum & Lichtenstein, 2007).
In high-income countries, reorganized production and technological change, driving by
investors’ expectations of higher returns, have resulted in a precipitous drop in the demand for
‘unskilled’ workers and in their incomes (Nickell & Bell, 1995). The integration of growing
numbers of people in India, China and the former transition economies into the global
marketplace will roughly double the size of the global labour force. Many observers conclude
that this will mean sustained, worldwide downward pressure on wages (Woodall, 2006; Ferguson
& Schularick, 2007). The World Bank view is more sanguine, holding that wage increases “will
create space for low-income countries to move into the lowest-skill activities vacated by
producers in the large emerging countries” (World Bank, 2007b: 102). Over time, some firms in
developing countries may be able to ‘move up the value chain’ within global production
networks based on sources of competitive advantage that go beyond low wages and flexible
working conditions; firms that once carried out contract manufacturing for producers of namebrand
electronic products may even become their competitors (Arrunada & Vazquez, 2006).
However, it is not clear (to put it mildly) that all firms or countries will be able to pursue such a
strategy successfully (Kaplinsky, Morris & Readman, 2002; Nadvi, 2004) or that even when
firms succeed the benefits will be shared by their workers.
Worldwide, some workers are far more vulnerable than others. Robert Cox has argued
that globalization divides labour forces into a hierarchical structure of “integrated, precarious,
and excluded” workers (Cox, 1999). The usefulness of this typology is confirmed (for instance)
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by 1997 survey data from Brazil, Chile, Colombia, Costa Rica, El Salvador, Mexico, Panama
and Venezuela showing that “the occupational structure has become the foundation for an
unyielding and stable polarization of income,” with lower income personal service, agricultural,
commercial and industrial workers making up 74 percent of the working population; an
intermediate stratum of technicians and administrative employees 14 percent, and higher-income
professionals, employers and managers just 9 percent (United Nations Economic Commission,
2000: 61-91). Analysis of these data links “the need to participate competitively in the world
economy” to labour market deregulation, increased flexibility, and the growth of economic
insecurity (United Nations Economic Commission, 2000: 93-102). Similar descriptions of
labour market polarization and the associated precariousness of livelihoods can be found in
recent studies of the Asian context (United Nations Economic and Social Commission, 2006;
Asian Development Bank, 2007: 304-311) Indeed the World Bank has projected that despite
optimistic predictions for global growth and the expansion of a global middle class, about which
more later, changes in the opportunities available in labour markets will lead to increased
economic inequality in countries accounting for 86 percent of the developing world’s population
over the period until 2030, with the “unskilled poor” being left farther behind (World Bank,
2007b: 67-100). 4 The next section of the paper raises the question of how this polarization is
likely to affect political allegiances.
Adding to globalization’s disequalizing effects, while the ‘skilled’ and credentialed are
increasingly mobile across national borders, notably within corporate structures, those with
limited education routinely find their options restricted to “survival circuits” of low wage labour,
the end points of which are instantiated by reliance on undocumented Mexican and Central
American workers in parts of the United States, and more generally by the proliferation of deadend
jobs driving taxis, delivering restaurant orders, caring for children and cleaning buildings in
the ‘global cities’ that are the control centres of the world economy (Sassen, 2002; Seifert &
Messing, 2006). Meanwhile, in at least some high-income economies this pattern is
accompanied by rising economic insecurity throughout the labour force and a concentration of
4 The distinction between skilled and unskilled workers is problematic, although it is widely used in the literature,
for at least two reasons: (a) in conventional usage it does not appear to have any clear relation to the complexity of
the tasks involved (Levy & Murnane, 2006), although a notable exception is Grossman & Rossi-Hansberg (2006),
and (b) it focuses attention on characteristics of the individual rather than on the social environment and factors
affecting stratification.
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labour incomes at the very top of the income scale: the emergence of the “working rich”
(Duménil & Lévy, 2004; see for background Saez, 2005; Mishel, Bernstein & Allegretto, 2007;
Yalnizyan, 2007). Although the extent to which this last phenomenon can be attributed to
globalization is contestable, its influence on the political viability of policies to counter
globalization’s impacts is less so.
Development researchers are familiar with the conditionalities attached to structural
adjustment lending from the World Bank and the IMF, and with the frequently destructive
effects on social determinants of health. Those conditionalities are now complemented, and
sometimes replaced, by “implicit conditionality” created by hypermobile capital in global
financial markets (Griffith-Jones & Stallings, 1995). The size of the resource flows in question
can be understood from the fact that, while the total value of foreign direct investment (to build
new production facilities or acquire existing assets) in 2006 was $1.2 trillion, the daily value of
foreign exchange transactions on the world’s financial markets is now estimated at $3.2 trillion
(United Nations Conference, 2007; HiFX Foreign Exchange, 2007).
The 24/7 global financial marketplace, its effects magnified by a diversity of largely
unregulated financial instruments (see e.g. Erman, McNish, Perkins & Scoffield, 2007), can
generate financial crises like those that affected Mexico in 1994-95, several Asian countries in
1997-98; Argentina in 2001-02 and perhaps a wider range of countries and classes at this writing
(March 2008). Such crises plunge millions of people into poverty and/or the informal economy,
damaging health as income losses lead to undernutrition and reduced access to health care
(Hopkins, 2006). These effects may be compounded by austerity measures needed to reassure
financial markets or the IMF, although considerable inter-country variation is observable in this
respect, and prolonged by the fact that employment recovers much more slowly than GDP in the
aftermath of financial crises (van der Hoeven & Lübker, 2005). The former Managing Director
of the IMF, writing in the aftermath of the Mexican peso crisis of 1994-95, referred to the “swift,
brutal and destabilizing” consequences that ensue when policies are not “deemed basically
sound” by investors (Camdessus, 1995). This blunt observation about the power of markets is
notable for its author as much as for its content, which is now almost universally acknowledged.
Somewhat less spectacular, but perhaps just as important in terms of social determinants
of health, is the effect of financial markets on domestic redistributive policies. Apparently
concerned about policies that might be adopted by the Workers’ Party in Brazil (in advance of
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the 2002 elections) or the African National Congress in South Africa (after democratization),
investors drove down the value of national currencies by roughly 40 percent in each case,
arguably leading the governments in question at least temporarily to accept high unemployment
and limited social expenditure rather than risk further depreciation of their currencies (Goldfajn,
2003; Evans, 2005; Koelble & Lipuma, 2006). In South Africa, the result was ”dismal
development and excellent macroeconomic outcomes” (Streak, 2004), with the former including
negative employment growth in every year between 1996 and 2000 and an official
unemployment rate of over 30 percent; unofficial unemployment rates, using a broader measure,
were and are considerably higher (Kingdon & Knight, 2005). Layna Mosley, one of the most
accomplished investigators of how global financial markets actually work (Mosley, 2003),
concludes that “those societies most in need of egalitarian redistribution may have, in terms of
external financial market pressures, the most difficulty achieving it” (Mosley, 2006: 90).
Further complicating the picture, it is often difficult to distinguish between the effects of
such external pressures and those of actual or anticipated domestic capital flight – defined by
Beja, 2006 (p. 265) as “the movement of capital from a resource-scarce developing country to
avoid social control,” which can mean taxation, regulation as well as a variety of economic
policies favouring, e.g., productive investment rather than speculation. The Mexican financial
crisis of 1994-95 was generated not only by US investors selling Mexican securities, but also by
wealthy Mexicans who shifted into US dollar-denominated assets in anticipation of devaluation
(US General Accounting Office, 1996). Generically, the capital flight constraint on public policy
is illustrated by John Williamson’s comment that “levying heavier taxes on the rich so as to
increase social spending that benefits disproportionately the poor” is conceptually attractive, but
“it would not be practical to push this very far, because too many of the Latin rich have the
option of placing too many of their assets in Miami” (Williamson, 2004). A discussion of
Chilean social policy to which I return later in the paper notes that fear of capital flight provided
a “powerful constraint on a more vigorous pursuit of the government’s social equality
objectives” between 1990 and 2000 (Teichman, 2008: 450). The constraint is important because
calculations for Latin America, a region where levels of intra-national economic inequality are
persistently among the world’s highest (Hoffman & Centeno, 2003) show that even a little
redistribution of income through progressive taxation and targeted social programs would go
farther in terms of poverty reduction than many years of solid economic growth (Paes de Barros
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et al., 2002; see also de Ferranti, Perry, Ferreira & Walton, 2004). Although the emergence of
Miami as a regional financial and business centre increases opportunities for capital flight in the
Latin American context, the problem affects developing and transition economies in most
regions of the world (see e.g. Loungani & Mauro, 2002; Ndikumana & Boyce, 2003; Beja,
2006). Needless to say, most people in such economies do not have the option of diversifying
into foreign assets, so access to opportunities for capital flight has a strong polarizing influence
quite apart from the constraints that capital flight imposes on domestic policy.
4. Population health and the possibilities for redistributive social policy
The preceding discussion suffices to make the case (a) that, paraphrasing Birdsall, the problem
with globalization is not market failure but market success, and therefore (b) that without
decisive policy intervention, globalization is likely to lead to increased health disparities by way
of multiple pathways involving economic polarization. Against this background, the
Globalization Knowledge Network borrowed terminology from a followup to the Copenhagen
Social Summit by the Finnish social policy research unit STAKES to call for a generic response
by way of the “three R’s”:
“• systematic resource redistribution between countries and within regions and countries
to enable poorer countries to meet human needs,
• effective supranational regulation to ensure that there is a social purpose in the global
economy, and
• enforceable social rights that enable citizens and residents to seek legal redress”
(Deacon, Ilva, Koivusalo, Ollila & Stubbs, 2005).
What are the prospects for implementing this prescription, within national borders and at the
level of supranational institutions? Multiple research questions need to be addressed; here I
focus here on the prospects for redistributive social policy within countries, keeping in mind that
many of the same political feasibility issues attach to regulation (e.g. of employment relations)
and rights (e.g. to social provision or health care).
Evidence does not support a fatalistic view that globalization simply prevents
implementation of the three R’s. Industrialized countries, including some archetypal small open
economies, vary by an order of magnitude in the prevalence of child poverty (measured using a
standard designed for cross-national comparison); globalization has not precluded diversity of
labour market arrangements and social policies, some of which are highly redistributive
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(UNICEF, 2005). At the same time, social protection institutions in these countries have been
experiencing pressures for retrenchment. Some evidence suggests that even the most effective of
such institutions have only been able to prevent inequalities in market incomes during (roughly)
the post-1980 period of contemporary globalization from widening (Kenworthy & Pontusson,
2005). In other countries, Canada for instance (Heisz, 2007), the redistributive effect of tax and
transfer programs has decreased dramatically. Further, as Mosley reminds us, financial markets
do not allow most low- and middle-income countries a comparable degree of policy flexibility.
Conversely, constraints on the ability of national and subnational governments to reduce
the destructive impacts of the global marketplace may arise from several sources in addition to
the operation of financial markets, although the prospect of capital flight will often lurk in the
background. The following discussion is highly stylized, but provides a starting point for further
inquiry and the generation of more specific hypotheses.
Many existing regimes of regulation and social provision arose as provisional settlements
of domestic distributional conflicts, mainly although not only those between labour and capital.
Global reorganization of production may free capital from the imperative of negotiating such
settlements at the national level because of the option of relocating production elsewhere,
simultaneously enhancing capital’s bargaining power relative to labour within national
boundaries (Bronfenbrenner, 2000).5 Indeed, strong pressures exist toward economic and social
policy convergence on the ideal type of the competition state, “[t]he main focus of [which] is the
promotion of economic activities, whether at home or abroad, which will make firms and sectors
located within the territory of the state competitive in international markets” (Cerny, 2000: 136).
Cerny draws the provocative analogy with interjurisdictional competition for investment in the
United States, suggesting that national governments, deprived by globalization of many onceeffective
policy instruments, now must compete for investment in a similar way. Against this
argument, it must be stated that a series of cross-national econometric studies failed to find any
statistical support for the claim that globalization, as measured by openness to trade and foreign
direct investment, has negative consequences for institutionalizing core labour rights as
identified by the International Labour Organization; indeed some effects tended to be positive
5 This is one of several weaknesses in the argument that globalization can be managed equitably by way
of a “global social contract”: even if the necessary institutional structures existed, capital has few
incentives for entering into such a contract analogous to those that exist when distributional conflicts must
be resolved within national borders, and many to resist it.
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(Neumayer & De Soysa, 2005; Neumayer & De Soysa, 2006; Neumayer & De Soysa, 2007).
However, the authors are clear about the limited inferences that can be drawn from their
findings, which cannot be applied to outcomes as distinct from process-related variables. “It is
entirely possible of course, perhaps even likely, that globalisation boosts the bargaining power of
capital at the expense of labour, which would put downward pressure on outcome-related labour
standards such as wages, working times and other employment conditions. These have not been
the subjects of our analyses” (Neumayer & De Soysa, 2007: 1532).
In many low- and middle-income countries globally oriented economic elites (cf. Jones,
1998; Flynn, 2007) are emerging. Their interests are much more closely aligned with those of
their counterparts in the high-income world than with their compatriots’; their fortunes are tied to
alliances with TNCs, and in an increasing number of cases to building them. What happens a bit
lower on the economic pyramid may be just as important. In the study that predicted an increase
in labour market inequalities in most of the developing world, the World Bank envisioned the
emergence of a global middle class: “in 2030 more than a billion people in developing
countries,” as compared to 400 million in 2000, “will buy cars, engage in international tourism,
demand world-class products, and require international standards for higher education.” The
members of this expanding middle class will be globally oriented as consumers, and often in
their relation to the productive process as well. The Bank’s rosy view of the implications for
social policy is that “[a]s average incomes rise, the number of poor will shrink and the tax base
will grow, making effective assistance easier to provide and social safety nets a viable remedy
for increasing inequality” (World Bank, 2007b: 69).
But will the new middle class be willing to share? It would seem unwise to presume this.
A vision at least as plausible as the World Bank’s, lent added credibility by the rapid pace of
urbanization in the developing world, is of a future in which more and more places come to
resemble present day São Paulo, where world-scale wealth and extreme poverty coexist; the
ultra-rich commute by helicopter in order to avoid the tedium of traffic congestion and the
possibility of carjacking; and at least segments of the middle class retreat to fortified enclaves
while enthusiastically supporting criminalization of the poor (Caldeira, 2000; Romero, 2000;
Wacquant, 2003).
A further factor is the diffusion of neoliberal ideology, which is sufficiently central to the
process of globalization that some authors refer to neoliberal globalization or simply to
15
“neoliberalization.” (Harvey, 2005; see also Eide, 2005). Neoliberalization was, and to a
considerable degree continues to be, aggressively promoted internationally by right-wing
governments and key multilateral institutions like the World Bank.6 Harvey (2006) argues
convincingly that it should be understood as a strategy for recapturing class power both
domestically (i.e., within the United States) and internationally. At the same time, ideology
cannot be reduced to its historical origins or congruence with material interests; within domestic
policy contexts it operates in part as an independent variable, conditioning judgments about
feasibility and desirability. Important illustrations are provided by Canadian legal scholars
Fudge & Cossman (2002), who identify multiple dimensions of “privatization” as a set of
assumptions about the appropriate locus of responsibility for social problems and social
provision, and Schild’s more historically grounded analysis of how contemporary Chilean social
policy and the perspectives of civil society organizations reflect an equation of citizenship with
active individual participation (as a producer and consumer) in markets, rather than with
participation in collective choices as a member of a polity. “Neoliberalism is understood here
not just as a political economic reality, but also as a political project intent on re-regulating
society through the rationality of the market and that ultimately depends on techniques for the
self-regulation of individuals” (Schild, 2007: 180).
How do these hypotheses (some would call them conjectures) fit with the available
evidence? Since as stated earlier my primary objective is to explore areas for further inquiry, I
consider only one example: the large-scale conditional cash transfer (CCT) programs such as
Oportunidades (Mexico), Bolsa Família (Brazil) and Chile Solidario that have emerged as key
elements of Latin American social policy. CCTs are programs targeted at the desperately poor in
which small cash transfers are tied to such measures as ensuring school attendance, health
checkups for children, or non-participation in child labour. Latin American CCTs are widely
cited as success stories.7 As part of a substantial increase in social expenditure in Latin America
(Sáinz, 2006), they have led to short-term improvements in health indicators (Gertler, 2004;
6 An especially striking example that post-dates the era of structural adjustment is the Bank’s
extraordinary social protection sector strategy document, which redefines the task of social policy as
social risk management starting from the premise that “In an ideal world with perfectly symmetrical
information and complete, well-functioning markets, all risk management arrangements can and should
be market-based (except for the incapacitated)” (Holzmann & Jörgensen, 2001: 16). .
7 Notably, in the case of Bolsa Família, in the Interim Statement of the Commission on Social
Determinants of Health (2007) and by the World Bank (World Bank, 2007a).
16
Lagarde, Haines & Palmer, 2007) and modest reductions in poverty and economic inequality,
albeit from historically high levels (in most countries in the region) that were exacerbated by two
decades of economic integration. However, one study warns that “substantial reductions of
inequality are not likely to be achieved without paying ample attention to employment policies
and reversing the inequality-increasing biases of social security systems,” which tend to be
predicated on long-term participation in formal labour markets (Soares, Guerreiro Osório &
Costa, 2007: 19). Another observer warns that in rural Mexico, “without attention to livelihoods,
CCTs will be educating young people principally for export – to the lower rungs of the
metropolitan labour markets” (Molyneux, 2007: 73). Hall (2006) expresses similar concerns
about Bolsa Família, with respect both to its long-term poverty reduction impact and the effects
of its competition for public funds with investments in education and infrastructure. (Here the
theme of revenue constraints as obstacles to more substantial poverty reduction efforts emerges
again.) CCTs also have ideological content, targeting as they do targeting the ‘poorest of the
poor’ in order to enhance their children’s human capital (Hall, 2006; Molyneux, 2006). This
rationale is rooted in a development policy vision that expects households to earn their way out
of poverty in the competitive labour market 8 and is thoroughly congruent with the market-based
ideal of citizenship described by Schild. Conversely, the presumption is that poor households
require “supervision” if they are to behave appropriately,9 implicitly assigning responsibility for
poverty to the poor – a core theme of neoliberal discourse in poor societies and rich alike10 –
rather than to structurally embedded inequalities.
What does the history of CCTs tell us about globalization and constraints on social
policy? Teichman’s important research on the Chilean and Mexican programs identifies linkages
forged in the era of structural adjustment between domestic policy elites and the World Bank and
Inter-American Development Bank, which have been strong promoters of CCTs, as an important
contributor to their adoption – not least by insulating the programs from challenges by domestic
civil society organizations (Teichman, 2007). More centrally to the perspective advanced here,
Teichman uses the language of “redistributive settlements” to situate CCTs in a political context
8 On the practical limitations of this prescription, as experienced in the Mexican context, see in addition
to the sources cited earlier (Parrado, 2005).
9 In the words of an unpublished Brazilian evaluation cited by Hall (2006: 25).
10 Cf. the title of the 1996 legislation that dismantled Aid to Families for Dependent Children in the
United States: The Personal Responsibility and Work Opportunity Reconciliation Act (emphases added).
17
that include not only the prospect of capital flight (at least in Chile) but also seriously weakened
labour movements; political resistance by strengthened business elites to tax-funded social
protection programs; and in Mexico fiscal constraints associated with a huge publicly financed
bailout of politically well connected bankers during the 1995 financial crisis (Teichman, 2008).
She observes that “resisters to a new redistributive settlement may include not just the business
community, but also upper and middle-income groups … along with technocratic allies within
the state” (p. 447). At best, Teichman concludes, CCTs “are able to garner a very grudging
societal consensus” that falls far short of support for “sufficiently redistributive policy outcomes”
even in the context of electoral democracy (Teichman, 2008: 456). Arguably demonstrating this
point in another country context, in December 2007 Brazil’s Senate voted against renewing the
tax on financial transactions that provided much of the funding for Bolsa Família – a loss likely
to be cushioned only temporarily by the strong revenue situation of the Brazilian government
(Alvares de Azevedo e Almeida, 2008).
5. Conclusion
I have argued that development, poverty reduction and global health agendas must be linked. I
have described how reorganization of production is leading to increased polarization in labour
market outcomes and opportunities, and how financial markets – more accurately, owners of
assets traded in those markets – “can now exercise the accountability functions associated with
citizenship: they can vote governments’ economic policies in or out, they can force governments
to take certain measures and not others” (Sassen, 2003:70; see generally Sassen, 1996).
However, I have further suggested that external influences like the operations of financial
markets may not represent the most serious constraint on national policy responses. Rather, that
constraint may arise from the difficulty of building domestic political pluralities in support of
such responses. That difficulty may, in turn, reflect changes in class structure that are influenced
by globalization, as well as the active promotion of neoliberal policy perspectives.
This position is clearly preliminary, but it suggests important lessons and warnings. We
who advocate for global value change in support of health equity must be cognizant of obstacles
to implementing that value change within national borders, even under conditions that are
relatively favourable (e.g., as in the case of the CCTs briefly discussed here, middle- rather than
18
low-income status and formal democracy). We must more actively build bridges with other
social scientists who, while not primarily concerned with health, are sources of expertise on
comparative social policy and therefore, by implication, on many of the policies that influence on
social determinants of health. Comparative inquiry, involving a diversity of countries and policy
responses, will clearly be valuable: for instance to illuminate the range of conditions in which
domestic support has been mobilized for initiatives like legislative or constitutional
entrenchment of rights to health care and subsequent implementation (Hogerzeil, 2006;
Hogerzeil, Samson, Casanovas & Rahmani-Ocora, 2006). Since multilateral responses will be
needed in order to address many of the asymmetries identified by Birdsall (conspicuously in the
area of trade policy, which I have not examined here), more research is needed on the conditions
that favour, and work against, domestic political support for such responses. As incomplete and
inadequate as the Gleneagles agenda was in addressing contemporary “global politics of unequal
development” (Payne, 2006), the momentum it generated was valuable and has dissipated; we
need to investigate why that happened at the level of domestic politics within the industrialized
world as well as elsewhere.
On a darker note: intra- and inter-country inequalities resulting from globalization may
now be sufficiently well entrenched that they have become self-reinforcing, to the point where
under most circumstances any politically plausible domestic policy responses will be rearguard
actions. They may, for instance, reduce poverty but at the price of increasing inequality or
transforming citizens’ relations with one another in ways that undermine such values as
solidarity. This is not merely an abstract concern: for instance, without a level of solidarity
sufficient to maintain support for cross-subsidization, anything approaching universal health or
social insurance coverage becomes impossible. We are now finding this out in Canada as we
contemplate the precarious future and declining coverage of our tax-funded public health
insurance programs (Evans, 2006). If my apprehensions on this point are accurate, then the
earlier invocation of São Paulo may approximate a literal image of the future, and the pattern
identified by Cornia and colleagues in which globalization undermines health may become more
striking. Are there initiatives at the international level that might make this outcome less likely,
and where can the necessary support be mobilized?
19
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