Political, Economic, and Social Rationale of Welfare and Social Security, A Comparative Analysis of Malaysia and China (1)
Author: YI FENG, ISMENE GIZELIS, and JIELI LI
Published in IJED, Vol. 1 No. 4
Despite common beliefs regarding the damaging side effects of income redistribution, equity and efficiency can coexist. Institutional stability depends on the consensus established between the government and the population. A relatively egalitarian distribution of resources is conducive to political stability and economic development. By contrast, long-term economic development can be undermined by skewed wealth distribution. Equity and efficiency may be compatible under a growth-oriented government, but not so under a government that focuses on its short-term survival strategies. A welfare system becomes efficient if the short-term political goals do not undermine the long-run goals of economic development. The cases of China and Malaysia are further compared and analyzed in this theoretical framework.