Is globalization a causal factor in the development of welfare states? If globalization does matter, does it constrain or facilitate the creation and expansion of social programs? If globalization has a positive effect on welfare states, which conditions prevent or enable increases in social spending and broadening of coverage? These questions are the focus of Miguel Glatzer and Dietrich Rueschemeyer's edited volume. These editors, who coauthored the introduction and conclusion, carefully selected studies by a group of scholars who are all both experts in the study of welfare states and masters of a specific geographic region or country. The studies include Western Europe (by John D. Stephens), Eastern Europe (Mitchell A. Orenstein and Martine R. Haas), Southern Europe (Miguel Glatzer), Latin America (Evelyne Huber), Russia (Linda J. Cook), and South Korea (Ho Keun Song and Kyung Zoon Hong). In addition to these regional or country case studies, there is a variable-oriented chapter by Geoffrey Garrett and David Nickerson that explores correlations between globalization and social spending across a large number of countries. Since they provided the authors with a limited common framework, giving them sufficient room to explore their own ideas, the editors achieved a good balance between coherence and diversity. All the chapters are of high quality, and each provides a particular insight into the relationship between globalization and welfare state development.

Glatzer and Rueschemeyer's book fills a gap in the debate on the impact of globalization on welfare states. This debate has been shaped by two strands of research. The first is the research on the advanced welfare states, which “has largely focused on internal, domestic factors” (p. 208), as the editors correctly point out. The reason for this was not always neglect. Some scholars argued that welfare state reform was caused by domestic changes, such as changes in employment structures or population aging, not by globalization. The second strand is the research on globalization, which has mostly investigated the changes in the international economic environment and the growing activities of international organizations in the field of social policy, thus unfortunately overlooking the contextual factors at the domestic level. This volume successfully unifies the debate and completes the picture, building on the two volumes on Welfare and Work in the Open Economy (2000), edited by Fritz Scharpf and Vivien Schmidt. But unlike the latter, which studies only advanced industrialized countries, this book covers a broad range of mid-income countries and also compares these with the mature welfare states. Its combination of comparisons within and across regions is its main strength.

The contributors to this volume are primarily concerned with the effect of globalization on the direction of welfare state development and thus quickly move beyond the earlier debate on whether or not globalization matters. They assess two competing hypotheses that are drawn from the existing literature: the “efficiency hypothesis,” which claims that globalization puts economic pressure on governments for lowering social spending in order to maintain or regain competitiveness, and the “compensation hypothesis,” which argues that globalization generates political demands for social protection, thus reducing the risks and social problems created by economic openness. Even though they find much evidence for the view that globalization leads to compensatory social policies, and little support for the argument that it undermines welfare states, the contributors conclude that globalization is only one causal factor among many, and that its effect on welfare state development is either reinforced or counteracted at the domestic level by economic conditions, power constellations, state capacities, and social policy legacies. In sum, the editors state, “neither the efficiency hypothesis nor the compensation hypothesis seems by itself to be a major determinant of welfare state development. Both identify potential pressures and outcomes, but these tendencies must be seen in the context of domestic conditions shaping social welfare policies” (p. 215). This finding is not new. The editors are well aware that the domestic-level conditions are the same as those that were previously identified in theories of the welfare state. The novelty lies in the successful transfer of these theories from the advanced welfare states in Western Europe to a diverse set of mid-income countries in Latin America, Eastern Europe, and Southeast Asia. The contributors to this volume thus show that concepts and theories can “travel” widely across geographic areas.

Casting a wide analytical net across many countries and regions of the world has the advantage that it “maximizes variation in the conditions of interest” (p. 2). The chapters thus lead to distinctive and sometimes contrasting findings. Stephens argues that classic, universalist compensation policies in Western Europe were an entirely indirect effect of economic openness, which was mediated by government partisanship and corporatist bargaining; Song and Hong show that the Korean government implemented a different, strictly targeted form of compensation measures in response to mass unemployment and widespread poverty, both of which had been caused by globalization. Huber argues that the World Bank and the International Monetary Fund contributed to welfare state retrenchment in Latin American countries that had a concentration of power in the executive branch and weak trade unions, while Cook shows that Russia successfully resisted pressures from these international organizations. Finally, Glatzer argues that the European Union membership negotiations did not play a role in the building of comprehensive welfare states in Portugal and Spain; yet Orenstein and Haas convincingly demonstrate that the “Europe effect” was critical in the development of social programs in Poland, Hungary, and the Czech Republic.

The disadvantage of the book's methodological approach is the lack of theory-driven, comparative case selection. Even though the authors argue that mid-income countries are more vulnerable to globalization pressures than advanced industrialized ones are, they do not distinguish among different types of welfare states within mid-income countries. Gøsta Esping-Andersen's (1990) concept of welfare regimes, which proved its usefulness in Scharpf and Schmidt's work on globalization, is absent from this book. Variations in vulnerabilities within mid-income countries are thus largely overlooked. Another weakness of the Glatzer and Rueschemeyer volume is the partial, incomplete fulfillment of its key objective to move beyond correlational analyses. In order to identify the causal sequences that link different dimensions of globalization—trade and capital flows, international organizations, and global policy transfer—to changes in welfare states, more process tracing and more hypothesis development about causal mechanisms would have been necessary. The “hypothetical sequence model” proposed in the concluding chapter is underdeveloped. One can hope that it will inspire more conceptual work and empirical research on the complex and contingent relationship between globalization and welfare states.