y an additional salary in taxes for each of your employees, when you can choose a country with a permissive legislative system and a location where you could trim your human resource related costs as close to 0 as possible
Further more, globalization is often associated with a diminishment in state sovereignty as private actors, major players on the global market, tend to gain more influence3 and the state is forced to give up its partial sovereignty in order to (1) become more flexible and competitive and (2) be able to enter schemes of economic and political integration.
As such, it will seem that the global economic market characteristic for the 21st century will bring about an end to full state sovereignty (because "sovereign statehood depends on territorialism"4 and typical instruments of a global economic market elude such territorial boundaries), and such an end will obviously mean an end to the welfare state as well.
Nevertheless, the Swedish welfare model may point out differently and it also offers the reasonable explanations for maintaining in great part and in almost the same structure its welfare system. First of all, we need to point out that Sweden represents the best argument against the idea that globalization and the welfare state are contradictory notions. While developing the highest level of social welfare in a state, Sweden has also given way to some of the most powerful and most 'global' companies in the market, Ericsson and Electrolux, not to mention Ikea, being just a few examples. So, while on one hand Sweden is the best known examples of a social welfare state, on the other hand, Swedish companies are powerful global actors and, additionally, the Swedish government (as the government of any small country, actually) has developed over the...
This essay discusses that the curvilinear effect will probably provide the best explanation on the connection between globalization and the welfare state, as manifested in Sweden and the Scandinavian Peninsula. As such, according to this theory, “highly global nations with generous welfare states, even greater levels of globalization would entail welfare retrenchment”. This statement will provide the theoretical background to support the argument that Sweden can deal, at its current globalization level (quite high, as previously discussed), with the challenges and may retain, more or less in the same form, the social welfare system.The welfare state develops, however, other serious impediments, one of these being the aging population, with Sweden one of the best examples in this case. Obviously, for a welfare state to work, one needs to account for a solid workforce. In conclusion, this paper has aimed to show that, despite the fact that many argue that globalization, with global capital market, flows, correlated with free trade and free movement of people, will reduce levels of social welfare policies and will pertain to a lower social protection, Sweden has managed to retain much of the policies, increasing even governmental spending during the 90s. The reason we have identified for such an assertion resides on an explanation of productivity in Sweden, where the states provide all the premises needed for the worker to concentrate on the work at hand, increasing thus productivity.