Growth Regimes and Welfare State Reforms

All political economies have been developed and consolidated during the phase of mass industrialization and are confronted with de-industrialisation in the last 30/40years. How do they adjust to this big structural trend? In order to adjust their systems to a changing environment, different countries or regions of the world follow different “growth strategy”, in order to stimulate economic growth and job creation, in which social protection plays a more or less pronounced role. Recent comparative studies point out that European countries have not followed the same economic strategies.

It is possible to identify four main types of national growth strategies implemented in order to recover growth and create jobs in a period of deindustrialization. Some countries have put emphasis on the primary role of financial capitalism (UK) to create new growth, others have tried to “save their industry” through a process of dualisation (Germany/France), others are investing in innovation and quality industry and services (Nordic countries), finally, some do not find other ways than cutting in public expenditure to restore competitiveness through a “general cheapening” strategy. In each of these countries, these strategies have particular (and different) implications for social protection systems: privatization as opening opportunities for new markets for financial actors in Anglo-Saxon countries, partial flexibilization of the labor market and dualization of welfare in Germany or France, a combination of social investment and strong social rights with labor market flexibilization in Nordic countries, a general trend of cuts and retrenchment in Southern Europe.