What Drives the Institutional Divergence of Productivist Welfare Capitalism?

Abstract

In East Asia, the initial intention of social policy was not for rights-based social protection, but rather for the promotion of economic productivity. Social security and welfare policies were essentially subordinated to the imperatives of labor production; as such, the benefits were provided selectively to government employees and industrial workers, who were considered important for economic growth. The “economy-first” mind-set also led East Asian newly industrialized economies (NIEs) to spend more on human capital formation while being reluctant to expand public income transfers and social services. A set of hypotheses regarding the productivity orientation of East Asian welfare regimes resulted in an active scholarly discourse of productivist welfare capitalism (PWC). Although the PWC thesis is not widely recognized in the “mainstream” literature and some scholars question the validity of the concept and its operationalization (Hudson and Kühner 2009), we cannot overlook the fact that it offers a compelling theoretical framework to understand the key nature of social policy development in East Asia.