Recent developments: social investment reform in the twenty-first century

The trajectory of developed welfare states in the early twenty-first century is perhaps best understood through the idea of ‘social investment’. The first section of this chapter defines social investment as a sui generis welfare paradigm, distinct from both the Keyne­sian–Beveridgean welfare state and its neoliberal critique, and analytically rooted in the three interrelated policy functions of lifelong human capital stocks, work–life-balanced flows, and inclusive buffers. The second section identifies the trajectories of (non-)social investment reform that have cross-cut welfare regimes in the past two decades. Section three takes stock of the impact of the economic crisis on recent welfare state developents. The final section concludes by reflecting on the challenges and opportunities for welfare reform after the Great Recession. Most notably, it highlights how high public spending on established social protection commitments seemingly operates as a ‘produc­tive constraint’ that accelerates social investment reform, reinforcing employment and productivity growth, to sustain popular welfare states.