New Labour,Economic Reform and the European Social Model

Abstract

The European debate on the challenges of globalisation often degenerates into a contest between a purportedly ‘Anglo-American’ model of liberalised markets lacking a social dimension, and an inflexible ‘European Social Model’ of generous welfare provision but slow growth and high unemployment. We argue in this article that this is a false choice. Data on the comparative performance of European states in implementing the ‘Lisbon Agenda’ show that countries which perform well in terms of economic efficiency and liberalisation also perform well socially. Although combining efficiency and equity may be easier for some political economies than for others, we question the notion that European states are irrevocably ‘locked in’ to particular welfare regime types, suggesting instead that they are generally ‘hybrids’, and that successful reforms may be achieved even in the most unlikely cases.