Revising Social Contracts: Social Spending in Latin America, East Asia, and the Former Socialist Countries, 1980-2000

Abstract

This paper examines the determinants of social spending in Latin America, Eastern Europe, and East Asia during the 1980s and 1990s. We hypothesize that pronounced and enduring differences in welfare legacies and fiscal constraints affected the way countries of the three regions responded to more contemporary challenges of economic crisis, integration into global markets, and transitions from autocracy to democratic rule. Latin American countries, which inherited the most severe fiscal constraints, were least able to protect social spending during economic downturns. East Asian countries and, to a lesser extent, those of Eastern Europe, were less likely to reduce social spending in the face of downturns and somewhat more likely to increase during democratic transitions.