Evolving Role of the State Explored at Globalization TrendLab 2014

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The state’s role in addressing critical issues related to welfare, education, healthcare, security and economics takes center stage at the Lauder Institute conference.

The Wharton School’s Lauder Institute at the University of Pennsylvania hosted the fourth annual Globalization TrendLab conference April 15 – 18, 2014. The meeting, entitled “The Future of the State,” brought together leaders from academia, business, government, multilateral organizations, and nonprofits to explore how governments and politically organized societies have evolved with political, economic and societal shifts.

“This year’s conference brought together prominent academics and practitioners to discuss the role of the State in addressing security, education and healthcare, and economic growth needs around the globe,” said Mauro Guillén, Director of the Lauder Institute. “Global financial uncertainties are forcing politicians, policymakers and voters to reconsider their assumptions about the role of the state in the economy, the society, and the culture.

Panelists discussed how, in the developing world, the state has expanded. While some countries have grown welfare programs, others states have become more fragile and outright failures, undermining the rule of law and fading services like security, education and healthcare to citizens, and economic growth.

“South Korea and Taiwan have stepped up spending on pensions and health care, and created more comprehensive unemployment insurance schemes,” said Evelyne Huber, Professor of Political Science at the University of North Carolina. “While neo-liberal ideology presented the state and its high levels of debt as a cause of the “lost decade” of the 1980s in Latin America, subsequent political and economic developments have made it possible for the largest countries in the region to expand the number and scale of social programs. In East Asia, these changes have been driven by the influence of civil-society organizations, while in Latin America, the leftist and labor-based parties have taken the lead.”

Building a state based on democratic rule is challenging, exemplified by the many failed attempts at making democracy work in certain parts of the world. “Participatory politics are not perceived everywhere as a universal model,” said Jack Goldstone, Professor of Public Policy at George Mason University and who explained the challenge of building democratic institutions as evident by the many failed attempts at making democracy work in certain parts of the world. “Only one billion people live in countries with both a capable state and a democratic process in place.”

Recent outbreaks of civil unrest in Egypt, Thailand, and Brazil suggest that states are being challenged, revealing a lack of both effectiveness and legitimacy. “Within two or three decades, half of the world’s population will live in countries with fragile states,” predicts Goldstone.

The influence of private interests – or state capture – was also discussed. State capture can significantly influence a state's decision-making processes and represents a big threat to state capacity because it shifts political power toward groups with little interest in the ‘social investment state.’ “The U.S. is a classic example of state capture in that special interests have managed to gain control over the regulatory agenda,” said Simon Johnson, Professor at the Massachusetts Institute of Technology and former IMF Chief Economist. “It’s ironic that a few years after a most serious crisis, the banking sector is now even more concentrated, and financial reforms have stalled or are ineffective. The ‘influence industry’ has become a pivotal piece of the policymaking landscape, including lobbyists, think tanks, and other organizations.”

The annual Globalization TrendLab conference was sponsored by Santander Universities, a division of Santander Bank, N.A.

A full copy of the report from the conference can be downloaded at: http://lauder.wharton.upenn.edu/pages/pdf/other/Global_TrendLab_2014_State.pdf

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About the Lauder Institute:
The University of Pennsylvania’s Lauder Institute, founded in 1983, combines a world–renowned Wharton MBA with a Master’s in International Studies, offering advanced business and cultural studies in nine languages programs that include Hindi, Arabic, Chinese , Japanese, Portuguese, Spanish, French, German and Russian. This advanced language and foreign culture training, a two-month in-country immersion program, and a Master’s Thesis from the School of Arts & Sciences all prepare Lauder Fellows for the ever-evolving global economy. This year’s offerings include the new Global Program for students who are already fluent in several languages but have interest in deepening their intercultural and cross-border knowledge. Graduates join the diverse, supportive and committed worldwide Lauder community – continuing a nearly 30-year tradition of international business leadership. The Lauder Institute also offers an MA/JD joint degree. For more information, visit http://www.lauder.wharton.upenn.edu.

About the Wharton School:
Founded in 1881 as the first collegiate business school, the Wharton School of the University of Pennsylvania is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. With a broad global community and one of the most published business school faculties, Wharton creates economic and social value around the world. The School has 5,000 undergraduate, MBA, executive MBA, and doctoral students; more than 9,000 annual participants in executive education programs annually and a powerful alumni network of 92,000 graduates.

About the School of Arts & Sciences:
The School of Arts & Sciences provides a foundation for the scholarly excellence that has established Penn as one of the world’s leading research universities. The School enrolls 6500 undergraduates, admits approximately 250 students each year into its 32 doctoral programs, and offers a wide range of programs for lifelong learning. International studies are a vibrant enterprise at the School of Arts & Sciences. In addition to offering instruction in 50 languages, the school is home to an array of centers, programs and institutes dedicated to the study of world regions and contemporary global issues and conflicts.

About Santander:
Santander Universities was founded in 1996 as a means of advancing the Santander Group’s mission to contribute to the advancement of society through its support of higher education. The Santander University Global Division provides funding for teaching and research, international cooperation, knowledge and technology transfer, entrepreneurial initiatives, student exchange and innovation. It maintains more than 1,100 agreements with universities and research centers worldwide, including 32 in the United States through Santander Bank. In 2013, Santander Universities provided funding for 4,105 new projects and 37,712 scholarships globally, as well as over 100 projects and over 1,000 scholarships in the United States. For more information about Santander Universities Global Division, visit http://www.santander.com/universities.

Santander Bank, N.A. is one of the largest retail banks in the United States by deposits. Its main corporate offices are in Boston and it operates principally in Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island. Santander’s 9,469 employees serve its 1.8 million customers through the Bank’s 706 branches, 2,074 ATMs, call centers, website and mobile app. Supervised by the Office of the Comptroller of the Currency and a member of the Federal Deposit Insurance Corporation, Santander in the United States is a wholly-owned, financially autonomous subsidiary of Banco Santander (NYSE: SAN), a global commercial and retail bank. For more information about Santander, visit http://www.santanderbank.com or call 877-768-2265.

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