Employers and the Social Investment State

Building on the Varieties of Capitalism (VoC) literature, this paper analyses the role of employers as important actors explaining the development of social investment policies. We have chosen Britain, Germany and Italy as crucial case studies. Whilst Britain is usually characterized as a liberal welfare state within a liberal market economy (LME), Germany has been described as a conservative or Christian-democratic welfare state within a co-ordinated market economy (CME). Italy belongs to the Mediterranean welfare state regime and has a mixed-market economy (MME). For a long time, it has been argued that business has a privileged position in the policy-making process. Especially the power resources approach has assumed that business organizations are antagonists or at most consenters with regards to the introduction and expansion of social policies. However, building on research that emphasizes the role of employers and their interest in a skilled workforce in welfare state development, we expect employers to have been crucial in the development of social investment policies. In the first part of our paper, we will analyse the changed socio-economic conditions (structural context conditions), before scrutinizing the institutional policy legacies and state capacities in the second part. The third part of the paper will focus on the dimensions of agenda setting and political coalitions in the policy-making process.