Reform perspectives on welfare state models in global capitalism

In the tradition of Esping-Andersen a number of welfare state models have been
characterized. In this paper we analyse the economic and social performance of
these different welfare regimes on an encompassing empirical basis both in the long
run and with respect to their adaptability to the challenges of the last decades.
While the differences with regard to growth dynamics had been very small in
decades after the war (1960-1990), growth rates as well as the employment and
social policy records have diverged in the past 15 years. The best performance is
revealed for the extreme types of the Scandinavian model and for the liberal Anglo
Saxon model, while the continental model produced low growth and increasing
unemployment. The reforms primarily in the Scandinavian countries allow us to
delineate elements of a “New Welfare State Architecture” which on the one hand
upholds important characteristics of a European social model, but on the other hand
allows welfare states to be competitive in the globalizing economy. The vision of
such a European socio-economic model could be the redirection of incentives in
such a way that the welfare state is able to shift from a burden (increasing costs and
lowering flexibility) to a productive force.