Answer to Question #257392 in Economics for Poomie

Question

Discuss the effects of globalization on government spending anchored on the three theories presented by heimberger (2020).

Answer 1

The impact of financial globalization is expressed in a change in the scale and structure of public spending, primarily for social needs, in reducing public debt, and in maintaining strict budgetary discipline.

The so-called social function of the state and the budget, aimed at ensuring the social protection of citizens, is also being transformed under the influence of globalization. In the second half of the 20th century, developed countries made significant progress in this area, which made it possible to speak of the creation of a model of a "welfare state", coupled with increased state support for such elements of the social sphere as health care, education, pension insurance, etc. Successful implementation of this The model yielded significant results: an increase in government spending for social needs led to an increase in consumer spending and, as a result, stimulated domestic production and increase employment in the national economy. Therefore, highly developed Western societies are characterized by a well-functioning multi-level system of pensions, health insurance (universal and preferential), various types of benefits (for poverty, unemployment, disability, etc.), and subsidies (for education, medical care, housing payments, etc.), etc.)