There are several theories that try to explain why some countries have larger welfare systems than others. Explanations from different academic views indicate that sociopolitical factors and even racial composition of societies may explain why some countries opt for a larger welfare state than others. On the other hand, the taxes associated to larger welfare states are blamed as causes for high unemployment and low growth. Which is true is that the coexistence of a large welfare state with economic growth requires an important increase in productivity. This has been the situation that has prevailed in Nordic countries, many time mentioned as examples to follow in terms of its welfare state. The following graph shows that indeed, many countries have been unable to increase productivity, Mexico being a disappointing example. Under this context, it is difficult to believe that the social security systems in countries with low productivity will extend its coverage in terms of programs, people and benefits.
Source: Own calculation using data from www.oecd.org
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