by Bob Deacon The current phase of neo-liberal globalisation is presenting a challenge both to developed welfare states and to the prospects for equitable social development in developing and transitional economies.      This challenge flows partly from the unregulated nature of the emerging global economy and partly from the intellectual currents dominant in the global discourse concerning social policy and social development.      In particular, a combination of the World Bank’s preference for a safety net and a privatising strategy for welfare, the self-interest of International NGOs in being providers of basic education, health and livelihood services, and the World Trade Organisation’s push for a global market in health, education and insurance services, is undermining the prospects for equitable public social provision in both developed and developing countries.      This disturbing trend is taking place within the context of an apparent shift in the politics of globalisation from fundamentalist economic liberalism to global social concern.     In the North, globalisation has set welfare states in competition with each other: different kinds of welfare state are differently challenged by globalisation and have responded differently.      Anglo-Saxon welfare states, which have residualised and privatised welfare provision, chime with liberalising globalisation – but at the cost of equity. Workplace-based welfare systems of the former state socialist countries, and high payroll tax-based Bismarkian insurance systems, are proving vulnerable to global competitive pressures. Social democratic citizenship-based welfare systems funded out of consumption and income taxes are, given the political will, surprisingly sustainable in the face of global competitive pressures.      In the South, globalisation has generated indebtedness that has undermined the capacity of governments to secure education, health and social protection. It has threatened social and labour standards, segmented social policy within countries and created zones of exclusion from any benefits of globalisation.      In response to these trends, International Organisations have recently reconsidered some of their policies. The IMF has taken the social dimension of globalisation more seriously, considering whether some degree of equity within countries is beneficial to economic growth. The Bank has articulated more clearly its individual risk management approach to social protection in the context of globalisation. The OECD now warns that globalisation may lead to the need for more, not less, social expenditure and has begun moves to name and shame tax havens and to regulate TNCs. The ILO has begun to show signs of making concessions to the Bank’s views on privatising some part of social security, while other moves within the ILO suggest an interest in a new universalism emerging from bottom-up movements in several countries. More recently, the role of the World Trade Organisation and its views on the desirability of fostering a global market in health and social service provision are assuming a new prominence. INGOs are now more clearly divided into those that are acting as substitutes for government and those that are more concerned to act as policy advocates for greater government responsibility for welfare. Within this discordant global discourse, elements of what appear to be a new politics of global social responsibility can be discerned. Fundamentalist economic liberalism and inhumane structural adjustment appear to be giving way to a concern, on the part of the Bank, the IMF, and other actors, with the social consequences of globalisation. International development assistance is concerned about social development. UN agencies are increasingly exercised by the negative social consequences of globalisation.      Among the shifts in policy thinking and the steps that are being taken, which could herald a more socially responsible globalisation, are: the moves to globalise social rights; the signs that social policy issues are moving up the development agenda; and the steps being taken to regulate socially the global economy.      In terms of the moves to globalise social rights, the danger is the negative reaction of some of the South to the North’s moralising about global social rights without providing the resources to put them into practice. The initiative to establish a code of principles and best practice for social policy was objected to at Geneva 2000 by those who feared it would become a new conditionality of the IFIs. In relation to moving social policy up the development agenda, the question is whether the move to establish attainable development targets, such as basic education for all by 2015, represents global social progress or the legitimisation of residual social policy.      In terms of the moves to inject social concerns into the global economy, the conflicts of interest surrounding the failed trade talks at Seattle, the proliferation of codes of conduct for Transnational Corporations and the debate about raising global taxes for global social purposes all testify to the difficulties in getting a North-South agreement on how to further a socially responsible globalisation. The new socially responsible global consensus among many of the international actors seems to consist of the following elements: macro-economic management should address the social consequences of globalisation; a set of social rights and entitlements to which global citizens might aspire can be fashioned; international development cooperation will focus aid on meeting basic social needs; debt relief should be speeded up as long as the funds are used to alleviate poverty; the globalisation of trade generates the need for the globalisation of labour and social standards; good governments are an essential ingredient in encouraging socially responsible development. There are, however, a number of disagreements as to how to proceed with this new orientation: much of the South is understandably suspicious of even progressive social conditionality; how both world trade and world labour standards can co-exist without the standards being reduced to minimal core standards, or used for protectionist purposes, is far from clear; initiatives to invest the UN with global revenue raising powers are firmly resisted by the USA.      Despite the apparent shift from global neo-liberalism to global social responsibility, the existence of four tendencies within the new global paradigm, if allowed to be pursued, will undermine equitable social progress just as the world enters a new millennium with the resources to fund such equitable development. These tendencies are: The World Bank’s belief that governments should provide only minimal levels of social protection; The OECD/DAC’s concern to fund only basic education and health care; The International NGOs’ self interest in substituting for government services; The moves being made within the WTO to speed the global market in private health, social care, education and insurance services.      Given only a minimal and basic level of state provision, the middle classes of developing and transition economies will be enticed into the purchase of private social security schemes, private secondary and tertiary education and private hospital medical care. The result is predictable. We know that services for the poor are poor services. We know that those developed countries that do not have universal public health and public education provision at all levels are not only more unequal but also more unsafe and crime-ridden. This is the prospect for all countries that buy into this new global social development paradigm.      The urgent need is to re-inject the goal of equity into the making of social policy in the North and into social development in the South. Also needed is the reassertion of the paramount importance of government responsibility for securing this goal. Such governments need to be firmly supported in this rediscovery of the goal of equity by all international organisations. The problem we are faced with is the fragmentation and functional separation of agencies (WTO, BANK, IMF, ILO, WHO, UNDP, UNESCO, OECD, regional groupings), and conflict and competition within and between them for the right to determine aspects of global social policy and the content of that global social policy.      As I have suggested above, many of the most powerful actors are firmly committed to a path that challenges equitable development. The Geneva 2000 meeting ended without the meeting of minds North and South that would be needed to begin the process of establishing a responsible and accountable global system of governance in the social sphere, by which the goals of intra- and inter-country equity could be achieved.      Such a shift in the global politics of welfare will depend in part on the EU improving on present practice, shedding much of its self-interested trading practices and establishing global equitable development as one of its goals. It will also depend on progressive voices arising in the South which are also concerned with improving the structure of global governance in the interests of both the North and the South and with equity within and between countries. Alliances between the EU and other regional groupings of countries, such as Mercosur and SADC and ASEAN, could be forged if these groupings addressed the need for determining regional social polices based on the goal of intra- and inter-regional social equity. Such an alliance of socially concerned regional groupings could act as a powerful counterpoint to continuing USA dominated global neo-liberalism that is not the interests of social welfare in most of the globe. (This is a revised, shortened and updated version of a paper published by UNRISD in the context of the Geneva 2000 process. It is available at www.unrisd.org and full references for the arguments developed can be accessed there. The arguments in the paper have been developed in discussion with colleagues in the GASPP programme. Details of these are available at www.stakes.fi/gassp and a paper expanding on the social dimension of regionalism will be available at that site in late 2000.) Bob Deacon is Director of GASPP, the Globalisation and Social Policy Programme, STAKES, Helsinki, and the University of Sheffield, UK. Tel: + 44 114 222 64 07 Fax: + 44 114 276 81 25 Email: b.deacon@sheffield.ac.uk