Question

“Welfare State is getting replaced by market.” Analyse the reasons for this change.

Answer 1

1. Globalisation results in the erosion of state capacity, that is, the ability of governments to do what they do. 
2. The old ‘welfare state’ is now giving way to a more minimalist state that performs certain core functions such as the maintenance of law and order and the security of its citizens. 
3. It is the market that becomes the prime determinant of economic and social priorities. 
4. The entry and the increased role of multinational companies all over the world lead to a reduction in the capacity of governments to take decisions on their own.