This panel explores the adaptability of the welfare states of small and open economies within the European Union to external and internal pressures. Over the past thirty years, substantial economic, social, demographic and cultural change has unfolded in Europe. Externally, the economic boundaries of the national welfare state have been redrawn; internally, new social risks have emerged; and historically, systems have become overburdened with collective obligations. In response to these challenges, all countries have changed their systems of social protection, albeit to different degrees and at a different pace. It has compelled authorities to keep social expenditures in check and to shift the emphasis from protection and care to activation and social investment.

It is the aim of this panel to take stock of newly emerging balances and policy mixes of economic adjustment, social protection and social promotion and to understand what outcomes they have so far produced in terms of economic performance and social inclusion. Three comparative papers discuss the adaptability of welfare states in small open economies (Hemerijck & Van Hooren); the impact of social investment reforms on the fight against poverty (Cantillon, Collado & Van Mechelen); and the added value of a social investment turn in the context of human capital development (Fahey). Two additional papers zoom in on specific cases, discussing the new balances found and barriers faced in the Danish (Baggesen Klitgaard & Marx) and Dutch (Soentken, Van Hooren & Rice) welfare states.