Welfare State Design Linked to Country's Degree of Financial Openness

A new analysis published on The Loop, the ECPR's policy blog, explores the relationship between welfare state structure and financial protectionism. The research argues that austerity measures and cuts to social protection tend to push countries toward more restrictive financial policies. The study suggests that who a welfare state protects — and how generously — shapes a government's willingness to open its economy to global capital flows. Countries with weaker social safety nets may resort to financial protectionism as an alternative means of shielding citizens from economic volatility. The findings have implications for ongoing debates about the trade-offs between fiscal austerity, social policy, and economic openness.