In debates surrounding the restructuring of the welfare state in advanced industrial democracies, a key question relates to national policy autonomy. To what degree can democracies decide on a particular configuration of welfare policies in the context of global economic constraints? For example, the possibility for a country to have comprehensive employment benefits might be compromised by calls for the cost of labour to be competitive so as to attract international investors. Or perhaps the provision of universal healthcare might be undermined by the need to keep taxes low and budgets balanced so as to maintain confidence within financial markets that states will repay their debts.

Contributions to international political economy that have used a comparative methodology to compare the effects of globalization on different countries have argued that convergence of welfare states around a pared-back liberal model associated with the US and UK can be avoided, and that other policy arrangements and social contracts between state and society are possible. In these studies the continued capacity for political parties, the electorate and organized labour to determine public spending, social expenditure and/or welfare generosity are highlighted. Similarly other scholars have shown how the same global pressures have different effects depending on the variety of capitalism they encounter, distinguishing between coordinated market economies and liberal market economies and arguing that the former are relatively more resilient.