Assertion: All over the world, 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.

Reason: It has withdrawn from many of its earlier welfare functions directed at economic and social well-being.

Both the Assertion and the Reason are correct but the Reason is not the correct explanation of the Assertion.

All over the world, 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.
However, it withdraws from many of its earlier welfare functions directed at economic and social well-being. In place of the welfare state, it is the market that becomes the prime determinant of economic and social priorities.
The entry and the increased role of multinational companies all over the world leads to a reduction in the capacity of governments to take decisions on their own.