Chapter 7 - Is the Rest of the World Following a Different Path?

Summary

Other regions are indeed following paths that diverge from the route taken by the industrialized leaders over the last two centuries. In terms of the overall effort to spending tax money on social programs, both for social insurance and for public education, while the later-developing regions have spent lower shares of GDP than do the leading rich countries today, they pay higher tax shares for social spending than did the leaders did at the same levels of real income in the past. Fifty years from now, social spending will well take more than twenty percent of GDP in Japan and many countries of Eastern Europe, and even North America. Yet elsewhere many countries, some with low social spending and some with high, appear to be making wrong choices within their social budgets. This criticism applies especially to India, Turkey, Greece, Latin America, and other nations within the global South. These countries generally have lower PISA scores, lower GDP per person, and higher inequality to show for it.