Social investment represents the very last justification for the use of social policy in Europe in times of public cuts. But its ambition to find shared European policy solutions, while missing a single national focus, might create what Sartori called “undefined conceptualisations” or “indefiniteness” in comparative politics – in other words, a certain fuzziness in its underlying assumptions.
Is it then possible to define which policies belong to the realm of social investment? This debate is open and involves both top academics (Esping-Andersen, Korpi, Palier) and policy-makers. Two issues seem particular ambiguous in the social investment debate: first, the welfare regime inspiration, and, secondly, the ensuing policy choices, in particular activation policies and flexicurity. In both cases the challenge is to justify the use of social investment and explain its added value for social policy compared to other existing approaches, such as third-way, neo-classical or traditional social protection policies.
Welfare regimes and social investment
To start with, what is the welfare regime that inspires the most social investment policies? The Institute for Future Studies, in a recent research report titled “What Future For Social Investment?” the has cited both Anglo-Saxon and Scandinavian countries as examples of social investment in action, yet the goals of these two welfare regimes are remarkably different. Looking at the UK, as stated by Nikolai, the rise of third way politics in the UK introduced the notion of social investment state. However, the UK notion of social investment has acquired a certain private and community orientation as demonstrated by the policy proposals of the Social Investment Task Force.
In contrast, the original definition of social investment by Esping-Andersen in 2002 had a clear social-democratic inspiration, referring explicitly to Nordic countries that presented the lowest level of de-commodification. In the same paper on the future of social investment, however, Bonoli argues that social investment can be distinguished both from re-commodification (a typical trait of neo-liberal policies) and social protection (representing the classical approach of social security policies during the so-called ‘Golden Age’ of welfare).
This means that Esping-Andersen’s traditional regime-analysis no longer represents a valid framework for contemporary analysis. And yet the social investment literature has not proposed a new approach for exploring the current assumptions on welfare (such as de-commodification or stratification), outside of the straightforward goal of investing for increasing the efficiency of the European labour market.
Choosing ‘social investment’ policies
This is more than a theoretical debate: the ambiguity is reflected in the policy choices that the social investment approach wants to pursue. According to Knijn and Smit social investment share the same language of other post-modern approaches by referring to “new social risks, life course, human capital, and re-commodification” – but these are characterised by different policies. Indeed, the Transition Labour Model focuses on market flexibility, while the neo-classical “life-course model” aims at increasing the “efficient use of human capital” through private savings schemes.
Can we really identify precise policies for ‘social investment’? The only purely social investment policies identified by Bonoli are education and full-time training, in line with the original idea of social investment by Esping-Andersen in 2002. However, Knijn and Smit describe these policies as belonging to the transition labour model; according to them, social investment policies are rather about good-quality public childcare and parental leave – showing a specific commitment to gender equality.
Another ambiguous strategy is represented by “flexicurity” policies. Labour market policies inspired by flexicurity have been oriented towards increasing labour market flexibility, while also guaranteeing security of income and employment. However, as Italy’s example shows in the recent study by Jessoula, Graziano and Madama, the balance is often tipped more towards flexibility at the expense of income and employment security. Social investment theory has not yet defined the balance of flexicurity policies across its three fundamental dimensions: the possibility of having income security for workers, stability of employment, and flexibility of the labour market. Determining the balance of these dimensions would clarify the difference between social investment and simple re-commodification. This goes back to the issue of the welfare regime inspiration: Barbier distinguished, for example, between a Liberal version of activation and a Nordic, universalistic one, which guarantees more security in exchange for flexibility.
As the ambiguities arise in the literature of social investment, it remains hard to use this concept for suggesting policy changes in Europe – which was the original aim of Esping-Andersen and others in this European debate. Using Sartori’s terminology, paradoxically social investment needs a theoretical clarification to be transformed in a truly ’empirical concept’. While convenient for overtaking traditional dichotomies (neo-liberal vs. post-Keynesian, flexibility vs. social protection, de-commodfication vs. commodification), we are still left without any new empirical categories for understanding the potential direction of welfare reforms in the Old Continent.