Introduction to the Special Issue on social services as critical infrastructure: Taking stock of the promises of the social investment state

Abstract

This Special Issue focuses on social services as the critical infrastructure of the social investment model of the welfare state. It addresses social services as a research topic that is still underexposed in comparative welfare state research and examines this topic with a systematising intention in a broad European comparative and methodologically diverse perspective. It brings together different strands of scholarly discussion that have hitherto been poorly connected – social services, critical infrastructure, social investment and the welfare state's capacity to strengthen social resilience through providing social services. The authors of the Special Issue undertake a critical examination of the development of the capacities to implement social service policies in different European welfare states and different service sectors over the last two decades. Taken together, the articles illustrate that – in practice and in contrast to the expectations of academic proponents of the social investment paradigm – there is (still) a bias towards investing, in particular, in those services which are anticipated as having significant economic and social ‘pay offs’ (e.g. early childhood education and care). Furthermore, the articles identify implementation challenges that pose severe obstacles to the realisation of the social investment model.

Social services such as counselling, job training or support for reproductive and care work are an essential component of the welfare state. However, compared to social redistribution and transfers, social services have long received little attention from comparative welfare state research (Bahle, 2008). This situation has altered only recently against the backdrop of social changes: We observe an aging society, increasing female labour market participation, yet there remain persistent gender inequalities, labour market imbalances resulting from skills shortages and skills mismatch. We are also confronted with multiple crises, such as the European financial crisis, the ‘migration challenge’, Covid-19, and the war in Ukraine. These developments have revealed the importance of social services for modern Western societies (Hemerijck and Huguenot-Noël, 2020). Everyday social and economic life relies heavily on these services and their reliable provision. Social services thus have become a critical infrastructure.

The idea of social services as critical infrastructure forms the starting point of this Special Issue. The Special Issue argues that social services – like specific public infrastructure such as ICT, power plants or water systems – are of vital importance for the functioning of advanced democracies in the twenty-first century. Failed or interrupted service delivery, for example, due to severe shortages of qualified personnel, or a limited capacity in the welfare administration to plan and manage projects, can result in significant disruption of public safety and democratic stability. In turn, a working system of social services can enhance the stability and resilience of a society, given that the social service system itself is resilient and able to absorb shocks. Based on this premise, the Special Issue takes the current socially and politically disruptive situation as a background to study the state of the art of social service provision in the European welfare states and to explore content- and governance-related deficits in different service sectors. It identifies reasons for shortcomings and discusses possible solutions. The core thesis of the Special Issue is that the development and/or expansion of comprehensive, well-functioning social service systems, secured by the welfare state, is a prerequisite for the adaptation of the welfare state (in its various regimes) to the demands of today's social, political and economic realities. It is only under this condition that the welfare state can develop into a fully-fledged ‘social investment state’, which, referring to Gøsta Esping-Andersen’s work on the future of welfare policy-making commissioned by the European Union at the turn of the millennium, has been called the future model of the (European) welfare state by Anton Hemerijck and other European scholars (Crespy and Vanheuverzwijn, 2019; Garritzmann et al., 2021; Hemerijck, 2018: 814).

The idea of social investment has been gaining momentum in comparative welfare state research for quite some time (Hemerijck, 2018). According to Hemerijck, the ‘social investment’ model or ‘paradigm’ is characterised by three core policy and instrument elements, first, classic (re-)distributive policies (‘buffer’); second, active labour market policies in order to politically manage individual situations of labour market transition which have become normal for most employees (‘flow’); and, third, policies investing in ‘capacities’ – including social services – to ensure individual reproduction, notably with regard to the preservation of the labour force (‘stock’) (Hemerijck, 2018; Hemerijck and Patuzzi, 2021). State investment in prevention, human capital development and activation is considered necessary for two reasons: first, to enable all members of society to participate to the greatest extent possible, and second, to minimise the financial and social costs of welfare state policies.

While the EU and many of its Member States have reconsidered such services and have introduced new policies that might pay off as a social investment in the future and current labour force, such as early childhood education or job training, there is a critical academic debate about the underlying norms and values of the social investment state. One body of literature is concerned about the prescriptive underpinnings of the model (de la Porte and Natali, 2018), its strong orientation towards the norms and values of the (neo) liberal model of the welfare state and the lack of critical stance regarding the exploitative mechanisms of capitalist societies (Umbach and Tkalec, 2021). Others consider the reconciliation of equality and efficiency as a core motive of the social investment paradigm (Hemerijck, 2018: 812). According to this body of literature, overcoming social problems, such as poverty and inequality due to an unequal division of labour, an uneven access to education or other vulnerabilities, are central objectives of the social investment state (Plavgo and Hemerijck, 2021).

However, a social investment strategy taking these perspectives into account is full of prerequisites. It requires investments into the state's capacities, particularly in terms of financial resources, sufficient and skilled personnel and appropriate governance arrangements (Wu et al., 2018), to ensure the provision of social services in a comprehensive and resilient manner. Analytically speaking, the promises of the social investment state depend on the existence of a sound implementation structure that enables a quantitatively and qualitatively adequate, user-oriented provision of social services.

Research gap: the challenge of implementing the social investment state

Social investment as a reform agenda for European welfare states has received particular attention in both public discourse and social policy research in the years following the financial crisis of 2008 (De la Porte and Natali, 2018; Morel et al., 2012; Nolan, 2013). However, what is lacking is an implementation perspective that critically reflects both the availability and quality of social services as a necessary precondition of the social investment model. Comparative studies on the development of social services are either rather old (Bahle, 2008) or concentrate only on particular sectors (e.g. Martinelli et al., 2017).

This Special Issue aims to address this research gap by examining various social service sectors and the types of services they provide. It consists of six articles that study, in depth, four different welfare state sectors – early childhood education and care, labour market policies, long-term care and preventive healthcare – and a wide range of different services provided in these sectors, including counselling, coaching, guidance provision, teaching to enhance cognitive capacities, practical skill development, preparatory training for new tasks, etc. In so doing, the articles focus, in particular, on the capacities of social service providers to implement the services underlying policies. The sectors and types of services researched have been purposively selected. They comprise core sectors and services of the social investment state, such as early childhood education and care or labour market/counselling and training, which have been intensely discussed in social investment literature. These types of services are seen as embodying the concept of social investment, which involves investing in human resources to enhance their suitability for the labour market and ensure their ability to earn a livelihood independently, thereby reducing reliance on long-term state subsidies. In addition, the articles discuss social services that have not received significant attention in the social investment discourse, such as old-age or long-term care. These services, although not considered ‘direct investments’ in the labour market suitability of individuals like early childhood education and labour market training, are crucial for actualising the social investment paradigm. They serve as a prerequisite for enabling caring citizens to invest in their own resources and are therefore of utmost importance.

Theoretical background: the policy capacity approach

The concept of policy capacity (Wu et al., 2018) plays a crucial role in assessing implementation structures and related challenges in the articles compiled for the Special Issue. This approach recognises, firstly, the critical importance of focusing on the implementation stage to assess effective policymaking, thus on everything which comes beyond formulating policy intentions and turning them to laws, rules, and policy programmes. As Pressman and Wildavsky (1984) convincingly highlighted, it is during this stage of the policy cycle that ‘great expectations’ might be ‘dashed’. Furthermore, the policy capacity approach acknowledges that implementation requires more than just the availability of resources. Implementation capacity encompasses various dimensions, including human resources, technical expertise, organisational structures, leadership, governance processes, and the ability to engage with stakeholders and utilise evidence-based practices. According to Wu et al. (2018: 3ff), these skills and resources can be categorised into three different types – analytical, operational and political skills and resources – that are relevant at three different levels: the system, the organisational and the individual level.

The six articles of this Special Issue examine how different European countries, representing welfare states with different regional backgrounds, traditions, and traditions of organising state-society relations, have responded to the challenge of transforming their social service systems into sustainable and resilient critical infrastructures. They show how the conditions of implementation – mechanisms for horizontal and vertical coordination, for information collection and processing, for stimulating organisational learning and more – shape the transformation of the welfare state. The variations observed among countries in achieving a social investment state are not solely or primarily attributable to a lack of political will, but also to inadequacies in their implementation structures.

Country studies: single case and comparative perspectives

Drawing on the capacity approach of Wu et al. (2018) in their contribution, ‘Social services as critical infrastructures: conceptualising and studying the operational core of the social investment state’, Tanja Klenk and Renate Reiter compare the German and French welfare state's investment in the capacities for social service provision in the sectors of early childhood education and care and of elderly care. They enquire how the welfare state's capacity for a quantitatively and qualitatively sustainable provision of social services in the two sectors has developed in the last two decades, and critically ask what impact this has had on social and gender equality as main legitimising principles of the social investment state. The authors choose Germany and France as two welfare states with similar welfare systems, but different state and administrative structures, different mechanisms of civil society involvement in service provision and varying traditions of integrating female labour force in these contexts. Using policy documents and secondary analyses as a methodological approach, Klenk and Reiter argue that the idea of a social and gender enhancing the social investment state has indeed shaped agenda-setting and decision-making in both countries. Yet, the implementation of these ideas is still deficient. Even though policy capacity has been expanded considerably in both countries in both sectors, the skill sets, resources, competences and capabilities are still unsatisfactory to see citizens freedom to act enhancing due to the social investment states' intervention. Even more problematic is that limited capacities create new, or reinforce existing, inequalities.

Niklas Andersen & Karen Nielsen Breidahl, in their article on ‘How administrative reforms influence the capacity for implementing the Social Investment State’, offer a novel analytical framework to study the capacity of street-level organisations (SLOs). Applying the framework to the Danish case of implementing active labour market policies (ALMPs) in local jobcentres, the authors ask how recent administrative reforms have shaped the capacity of SLOs for social investment activities. Breidahl & Andersen show that the success or failure of a social investment approach is not only determined by politics and formal policies. In Denmark, administrative reforms have furthered jobcentres’ room for discretion as well as their ability to make long-term investments and to promote integrated service provision across different service areas. The SLOs’ capacity for implementing social investment policies has thus been enhanced. The close monitoring and the continuing control of local jobcentres through a strict and external accountability performance measurement system, however, impedes the actual use of discretion in the daily practice of street-level bureaucrats. Against the background of their findings, the authors conclude that an appropriate balance between centralised control and local autonomy has yet to be found.

In her article entitled ‘Critical infrastructure of social and labour market integration: Capacitating the implementation of social service policies to the long-term unemployed in Germany and France?’, Renate Reiter examines how organisational changes in the employment administrations of both countries have impacted on the opportunity to implement the social investment idea in labour market policies. The author begins by recalling that the comprehensive reforms of labour market policies for the long-term unemployed undertaken by France and Germany at the turn of the millennium were based on the idea of social investment. Combining the capacity approach of Wu et al. (2018) with findings from implementation research, she examines changes in the organisational and procedural foundations of labour market policies for the long-term unemployed in both countries. In fact, Germany and France took different paths in this respect. While in Germany there was partial centralisation of the deployment and use of implementation capacities, in France, corresponding capacities were decentralised. Reiter uses empirical examples to show that the semi-centralisation approach is principally better suited to the practical adaptation of the social investment idea than the decentralisation approach. However, she argues that this idea can only become practically influential in the implementation of labour market integration services for the long-term unemployed if it is politically desired and supported through the continuous provision of decentralised autonomy of action.

Andrea Lippi & Andrea Terlizzi provide a critical description of ‘The Marble Cake of Social Services in Italy and Spain’. Taking the challenge of the Covid-19 crisis as their starting point and drawing on the policy capacity framework by Wu et al. (2018), they explore the impact of the national recovery and resilience plans (NRRP) on the policy capacity for social service provision. These national recovery and resilience plans, which have been adopted by EU Member States to facilitate national economic recovery after the Covid-19 crisis, are likely to impact the core functions of the social investment approach. Using the methods of document analysis and focusing on child and elderly care, the article shows that the infrastructure of the social service systems in Italy and Spain continues to be a ‘marble cake’ in terms of intertwining national and subnational responsibilities, even though the central governments have increased their influence on social investment policy capacity. The authors argue that the pandemic has offered a window of opportunity to overcome traditional weaknesses in social service provision and to innovate the social infrastructure. However, the outcome of these reforms remains to be seen.

Franca van Hooren and Clémence Ledoux explore ‘The limits of social investment and the resilience of long-term care’ from a critical feminist perspective. They have chosen the case of long-term care provision as an example, which is an often-neglected field in the public and academic debate on the social investment state. From a purely functional perspective, social investment in long-term care seems to be less rewarding than, for example, investment in early childhood care and education. Van Hooren and Ledoux show that different modes of organising and implementing social investment policies, such as relying on paid or unpaid work and choosing between using public, private or voluntary service provision, have a huge impact on the overall resilience of social service provision. In both countries, the recent Covid-19 crisis has uncovered the vulnerability of a highly fragmented, decentralised and marketised sector. Against the background of their findings, Franca van Hooren and Clémence Ledoux postulate a social investment paradigm that no longer focuses only on including people in the labour market, but on promoting their capability to take care of the world.

Caspar Lückenbach, Verena Biehl and Thomas Gerlinger, in their article entitled ‘Establishing social services for health promotion in health insurance states: Germany, Switzerland and Austria compared’, explain the evolution and the status quo in the organisation of prevention and health promotion in the three health insurance states of Germany, Switzerland and Austria. From this point of departure, the authors explore the legitimisation patterns for the new institutional forms chosen in these countries to organise the provision of the relevant services. They argue that in all three countries, utilitarian considerations originally played an important role in the institutionalisation of policies for the provision of prevention and health promotion services. In Germany, as well as in Switzerland and Austria, the focus was on the potential to achieve savings for the national health system. More recently, normative justifications for the specific organisation of prevention and health promotion policies have emerged in all three countries, reinforced by corresponding trends in health policy discourse at the international level. The overarching goal is to improve the coordination and cooperation of the actors involved at the different levels of the health system in order to shape healthier environments and/or living environments for the citizens. In contrast, the authors argue, the objective of strengthening the individual and his or her labour force as the basis for a self-determined life, which is frequently mentioned in the social investment discourse, did not play a role in any of the three countries in the justification of policies relating to prevention and health promotion services.

Main findings

On the whole, the six articles of the Special Issue show that intense reform activities are underway in all countries (Denmark, France, Germany, Italy, Spain, the Netherlands) and in all fields of social service provision under consideration (health, early childcare and education, long-term care, active labour market policies for the long-term unemployed). Interestingly, the notion of ‘social investment’ plays a negligible role in terms of framing and legitimising reform activities. While social investment as a reform paradigm seems to be highly relevant for policymaking at the European level and in academic debates, it seems to be sparsely used policymaking at the national level. Reform strategies to improve social service provision are debated and adopted often without explicitly referring to the social investment paradigm. Nonetheless, the implemented reform measures significantly contribute to expanding social service provision. And, as some of the contributions in this Special Issue indicate, the Covid-19 pandemic has further intensified the willingness of European states to invest (even more) in social services, given that the pandemic has exposed the vulnerability of societies without a resilient social service infrastructure. Social services are increasingly important for the modern welfare state. In fact, this is what the European Union's support for corresponding investments has stressed as well. They have developed into a critical infrastructure of the welfare state.

While we can state without doubt that there is investment in social service provision, there is still a long way to go towards the realization of a (developed) social investment state. The shortcomings of recent social investment policies become clear when adopting a capacity and implementation perspective. Such a perspective demonstrates, firstly, that the expansion of social services is uneven. This finding applies to the development of social service provision across different policy fields (e.g. early childhood education versus long-term care). Moreover, it relates to the development of different capacities: analytical capacities have been expanded more than operational capacities. Shortages of skilled personnel constitute the primary explanatory factor in this regard, and they are evidently the bottleneck of investment and growth in social service provision, highlighting the unresolved issue of ensuring decent working conditions in social service sectors. An implementation perspective also reveals the challenges of organising social investment policies. Difficulties in achieving an appropriate balance between centralisation and decentralisation, between autonomy for street-level bureaucrats and their organisations and accountability through performance measures have been the main reason why social investment policies fail at the ground floor of policymaking and often exacerbate social inequalities instead of resolving them.

In this context, the articles demonstrate that the traditional institutional settings, which have historically shaped the implementation of social service policies and the provision of social services in the countries and sectors examined in this Special Issue, continue to influence policy implementation and service delivery. These settings can either facilitate or hinder the implementation of the social investment idea, depending on the country and sector. Overall, all the articles show that the distribution of tasks between the central government and the local level, as well as striking of a balance between central implementation control and local autonomy for substantial service provision, are critical factors for the feasibility of the social investment paradigm.