European Welfare States Beyond Neoliberalism: Toward the Social Investment State (original) (raw)

2010, Development and Society

Students of welfare state politics would probably agree that, on balance, a large number of veto players tends to inhibit not only the expansion of benefits but also their radical curtailment. (Starke, 2006: 115) After the golden age of welfare state development in Europe, the glorious thirty years from 1945 to 1974, perceptions changed and the welfare state was interpreted to be in crisis. One solution to the crisis was a neo-liberal approach emphasizing privatization and retrenchment. And at least rhetorically this perspective gained ground during the 1980s in Northwestern Europe and during the 1990s in the newly emerging market economies of Central and Eastern Europe. However, on the whole, social science literature has been more concerned about trying to explain welfare state resilience to change than identifying retrenchment even if parts of the literature do argue for such a perspective. This seeming contradiction within the scholarly community calls for a more precise definition of all three import concepts: What should be understood by neo-liberal reform or a neo-liberal approach? Which welfare policies are in question? And what parts of Europe are being investigated? Furthermore, the time perspective is crucial. From the perspective of the late 2000s this paper argues first that neo-liberalism in the form of the so-called Washington consensus is no longer promoted by international organizations. Social policies are no longer regarded as a burden on economies, but rather as investment in human capital. Hence, we are now beyond neo-liberalism. Secondly, the widespread welfare reforms in Europe must be distinguished according to welfare regime. Thus, the paper discusses welfare reform within five different trajectories: former state-socialist states, Continental Europe, Atlantic Europe, Southern Europe and Scandinavia. Although the number and demarcations of welfare regimes are contested (for an excellent overview see Powell and Barrientos, 2008) it is a widespread perspective and a good tool to order European welfare states. Hence, I agree with Francis Castles and Herbert Obinger (2008: 321) when they write: "Our main conclusions are that country clustering is, if anything, more pronounced than in the DEVELOPMENT AND SOCIETY Volume 39 | Number 1 | June 2010, 61-95