This panel is centred on the assessment of the capacity of the Spanish and Italian welfare states to promote sustained economic growth and employment creation as well as to elicit the politics behind social policy reforms. For this purpose, the panel includes four papers dealing with: a) welfare state adjustment to the post-indutrial context; b) the evolution of the intergenerational profile of welfare reforms; c) the transformation of the policy-making processes; and, d) the role and evolutuion of business interests.