Roads and Barriers Towards Social Investment Policies

Across the OECD world, social investment policies are on the rise, which Hemerijck (2015) describes as a “quiet paradigm revolution”. Whilst Nordic countries are typically considered the pioneers in social investment policies, we observe that latecomer countries of not only Europe but also East Asia have made considerable efforts to catch-up with Northern European frontrunners.

The rise of social investment policies, especially the expansion of family policy presents an important dimension of the recent transformation of advanced welfare capitalism, which despite the prominence of retrenchment cannot be reduced to welfare state regress. However, we observe great cross-national variation in the speed and scope of family policy expansion. Unlike family policy, labour market policy did not experience a similar social investment turn, but is instead rather characterised by retrenchment with declining efforts to improve the employability of jobseekers.

What explains the differences in the social investment turn? Not only comparing family and labour market policy but also comparing across countries within each policy domain, this paper analyses the roads and barriers towards social investment policy. It engages with institutionalist political economy theory, which is typically considered well placed to explain policy stability, but struggles when paradigmatic change is experienced. By contrast, public policy approaches allowing more room for political agency appear to have greater explanatory power to grasp policy change. We review competing theoretical accounts and discuss the implications of our findings for the “management of change”.