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Healthy Investment: Social Stability Risk and Public Health Expenditures in Autocracies
Unformatted Document Text:  such as pension and education. The next section proceeds with a brief overview of literature that contributes to our understanding of variations in social welfare benefits provision at the national level. Section three outlines my explanation for variations in government health expenditure— especially in authoritarian settings—and introduces my four hypotheses. Section four presents the results and discuss my findings. Finally, section five concludes with theoretical and empirical implications. I. Literature Review Economic Development Economic development has long been identified as a determinant of the size of the welfare state. A classic approach to explaining the growth of public spending is Wagner’s law, which states that the process of economic development in an industrial economy will be accompanied by an increased share of public expenditure in gross national product. Wagner maitains that a major reason for increased state expenditure in these economies is the growth of welfare functions(Bird 1971). Theories of welfare state development in OECD countries have also acknowledge the nexus between economic development and social welfare spending. Social policy, especially social insurance, expands as countries become more industrialized or economically developed (Cutright 1965). Much of such early researches reveal that social welfare policy changes mostly take place as a by- product of sustained industrialization and economic development when countries converge toward some functional level of social protection (Williamson and Fleming 1977) . The close link between economic development and the range and generosity of social welfare provided by the state suggests a causal relationship between them. In fact, Wilensky (Wilensky 2002) has submitted this hypothesis to empirical test by examining the experience of 60 nations, and finds the correlation between economic development and social development to be statistically significant. Wilensky’s findings are further supported by Kohl, who points out that “the rapid economic growth of the recovery period after World War II enabled Western democracies to increase public spending in almost all fields because of greater fiscal resources (Kohl 1981) ”. However, better economic performance does not necessarily contribute to a growing welfare state because recent research suggests what matters is not only the magnitude, but 4

Authors: Yu, Bin.
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such as pension and education. The next section proceeds with a brief overview of
literature that contributes to our understanding of variations in social welfare benefits
provision at the national level. Section three outlines my explanation for variations in
government health expenditure— especially in authoritarian settings—and introduces my
four hypotheses. Section four presents the results and discuss my findings. Finally,
section five concludes with theoretical and empirical implications.
I.
Literature Review
Economic Development
Economic development has long been identified as a determinant of the size of the
welfare state. A classic approach to explaining the growth of public spending is Wagner’s
law, which states that the process of economic development in an industrial economy will
be accompanied by an increased share of public expenditure in gross national product.
Wagner maitains that a major reason for increased state expenditure in these economies is
the growth of welfare functions(Bird 1971). Theories of welfare state development in
OECD countries have also acknowledge the nexus between economic development and
social welfare spending. Social policy, especially social insurance, expands as countries
become more industrialized or economically developed (Cutright 1965). Much of such
early researches reveal that social welfare policy changes mostly take place as a by-
product of sustained industrialization and economic development when countries
converge toward some functional level of social protection
(Williamson and Fleming 1977)
.
The close link between economic development and the range and generosity of social
welfare provided by the state suggests a causal relationship between them. In fact,
Wilensky (Wilensky 2002) has submitted this hypothesis to empirical test by examining
the experience of 60 nations, and finds the correlation between economic development
and social development to be statistically significant. Wilensky’s findings are further
supported by Kohl, who points out that “the rapid economic growth of the recovery
period after World War II enabled Western democracies to increase public spending in
almost all fields because of greater fiscal resources (Kohl 1981) ”.
However, better economic performance does not necessarily contribute to a growing
welfare state because recent research suggests what matters is not only the magnitude, but
4


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