2.1 The new world order'

Since the 1970s the world economy has entered an essentially new, global phase of development. This economy has, of course, always been 'international'. What distinguishes the present period, however, is its degree of internationalisation. The current informational revolution has transformed the world economy into a single interdependent unit that functions in real time (Castells, 1989). This process has led to profound changes in the developed and under-developed worlds. From within the old industrialised countries of the West, staggering technological advances have been made. This situation has been more than matched by the newly industrialised countries of the Far East which, centred upon Japan, have emerged as the point of fastest growth in the world economy (Hoffman and Kaplinsky, 1988). With regard to the poorest countries in the world, and the poorest sections of the population in the West, the period is equally important, but for different reasons. Following major improvements in health and other social indicators since the end of the Second World War, during the 1970s this progress began to falter (Cornia et al., 1987). These two inter-connected trends form the historical context of this report.

This global restructuring results from major changes in social and economic policy. During the 1970s, partly in response to the challenge from the Far East, the old industrialised countries embarked upon the modernisation of their social and economic systems. While pursued more consistently in the USA and United Kingdom, neo-liberal policies aimed at dismantling the post-war redistributive state, in favour of an enabling state that promotes market values, began to cross all boundaries, and have been implemented by parties of all political persuasion. The collapse of the planned economies of Eastern Europe and the end of the Cold War were the most spectacular indications of this trend. Within the market economies a two-tier welfare system has begun to take shape. The economically active sectors of the population are increasingly expected to seek welfare services in the market place; while a safety net, partly constructed from contractual relations between local authorities and voluntary agencies, is being put into place for the remainder (Stoker, 1989). In the world's poorest countries similar market reforms have been introduced in an attempt to halt their decline. In other words, the new world order is characterised not only by an extension of capitalism into remote areas of the world previously unaffected by it, but also by a matched internationalisation of public welfare.