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This section seeks to give an overview of the more recent methodologies that have been applied to unravel the relation between globalization and the welfare state. Subsequently, these methodologies will be compared to the considerations of this thesis. The focus is on comparing the methodologies with regard to three aspects, the differences in: variables, indicators and units of analysis.

On the variable level, studies by e.g. Brady et al (2005) and Shou (2010) have made no distinction between different globalizing forces and different welfare state models. These studies have sought to simplify the relation between globalization and the welfare state to an extent that the findings have critical shortcomings with regard to their external validity. Conversely, Dreher (2005) and Meinhard and Potrafke (2011) have made a distinction between social, political and economic globalization. Similar to this thesis, both studies use the KOF index to measure the same variables and indicators. However, a significant difference to these two studies is that they both fail to distinguish between different welfare state models. As a result, their units of analysis are aggregated into one group, representing the variable ‘welfare state’. There is a serious threat to not distinguishing between different welfare state models. To this end, “Galton’s problem” (Jahn, 2006) poses that it may not be the independent variable that causes the dependent variable to behave in a certain way, but the interaction between the different units of analysis. In other words, welfare states from the same model may copy each other in solving problems. By aggregating welfare states in a model and distinguishing between inherently different ones, the risk of Glaton’s problem can be mitigated.

On the other hand scholars like, Adelantado and Cuevas (2006) only make a distinction between different welfare models. Although this methodology mitigates Galton’s problem, it fails to encompass the complexity of the variable globalization. Another difference with the methodology of this thesis is the number of welfare state models which have been categorized. To this end, Adelantado and Cuevas (2006) focus on the welfare models; Liberal, Conservative, Social Democratic and Mediterranean. Moreover, only European welfare states are used as units of analysis. Conversely, this thesis

distinguishes between a threefold additional models on a global scale; i.e. using non-European welfare models as well. The reason for this is that the relation between globalization and the welfare state is on a global scale. Subsequently, when narrowing it down to a European context, it becomes impossible to validly generalize the findings to a global context again. In other words, the conclusions by this study are only valid for Europe. The reason for this is the particular European socio-economic and political context (Korpi, 2003; Adelantado & Cuevas, 2006). A similar shortcoming is found for the study by Leibrecht et al (2010), who explicitly focus on the European welfare models. However, their study does also distinguish between globalizing forces. As a result, its methodology has the closest link to this thesis’. However, not only does this thesis criticize Leibrecht et al’ (2010) use of a European context and the use of European welfare states as units of analysis, but it also criticizes the use of a single indicator to reflect the welfare state. To this end, where Leibrecht et al (2010) only use social expenditure to measure the variable welfare state, this thesis adds two additional indicators which measure the extent to which the social expenditure is distributed through taxes and transfers in order to reduce poverty and income inequality.

To conclude then, the majority of the methodologies of prior research have simplified the relation between globalization and the welfare state at the variable level. This has been done by distinguishing between either one, or even none, of the categories of the dependent and independent variable. Conversely, studies that have applied a relatively complex methodology, see for example Leibfried et al (2010), have done so whilst having simplified at the indicator level. Building upon the shortcomings of these studies, this thesis has produced the most complex methodology thus far.

3.5 Conclusion

This chapter has sought to highlight the methodological steps and considerations of this thesis in analyzing the relationship between different globalizing forces and different welfare state models (see figure 1). The former has been categorized into three distinct processes, whereas a sevenfold typology represents the latter. The threefold independent variables will be measured using the indicators of the KOF index as shown in table 5 in the appendix. On the other hand, the sevenfold dependent variables will be measured using a threefold indicators which seek to represent the welfare state’s ability to provide and redistribute social welfare. The data on these indicators are acquired from the OECD dataset. Additionally, a threefold control variables will be used to account for any spuriousness in the relation between the former two.

Secondly, this thesis has established an absolute and relative threshold in order to select the units of analysis and create the most isolated models. These findings have been summarized in table 4. However,

the lack of data has become a significant threat to the validity of this thesis. As a result, Latvia and Hungary have had to be excluded as units of analysis. Table 7 summarizes the missing data for each welfare state model. The table shows that especially the Post-Communist welfare model suffers greatly from a lack of data. This is especially true when looking at the missing data on the threefold globalizing forces. With regard to the data on the threefold control variables and the three indicators measuring the dependent variable, the table shows that not only the Post-Communist welfare model, but moreover the Antipodean and Confucian model suffer greatly from a lack of data. Since there are no alternative datasets that effectively provide the same information as the OECD dataset does, this invalidity cannot be resolved. Instead the lack of data is taken into consideration during the analysis.

Finally, this chapter has shown that a trend can be found amongst the methodologies of prior studies. Over the course of years, scholars have increasingly adapted their methodologies to reflect the complexity of the world by distinguishing between either or both globalization and the welfare state. Standing on the shoulder of giants, this thesis has contributed by creating two revolutionary indicators to measure the welfare state’s ability to provide social welfare. This contribution however, is modest in comparison to the claim that this thesis seeks to support with this methodology. Rather than seeking to support any of the existing conclusions, this thesis argues that the relation between globalization and the welfare state is imitative. The next chapter will execute the methodological steps highlighted in this chapter in, finally, unraveling the actual relation between globalization and the welfare state.