Palme: The Social Investment Paradigm: Achievements and Shortcoming. Presentation at TITA Annual Research Meeting, Turku 15.-16.9.2016.

1. The Social Investment Paradigm:
Achievements and Shortcoming
Joakim Palme
Department of Government
Uppsala University

2. In brief:
Unlcear achievements
as the major shortcoming

3. In sum:
Achievements
On the research agenda
On the EU policy
agenda
SDG Agenda can work
in tandem SI paradigm
Analysis started:
Diffusion by research,
experts, policymakers
networks
Shortcomings
Not combined with a
macro-economic
paradigm
Not taxing enough
Not spending/investing
enough
Not right institutional
complementarities
No normative framework

4. Genealogy of social investment

5. Lessons from the 1930s
• The Great Crash and the Depression
- Keynesianism emerging
• Crisis of the Population Question
- social policy of reproduction, quality of
population (Myrdal legacy)

6. The Golden Age of Capitalism
• Putting Keynesianism to work
• Rediscovering the gender agenda
The Neo-liberal turn and its paradigm
• Rolling back of the State

7. The welfare state in crisis (OECD,
1980)
• Growth to limits
• The unemployment problem
• ”The need to see economic and social policies
together”
• Is it possible to return to non-inflationary growth?
• Research: Diagnosis vs. Prescription
• Beyond redistribution, new priorities, full employment
without growth, welfare society

8. Goals of
the welfare state
• Redistribution
• Insurance
• Reproduction (care services)
• Investment
• Savings

9. Social investments
Are about investing in
an equal distribution of human capital
in order to promote
a good economic life-cycle for all
and reduce the pre-redistribution inequality

10. The Econonomic Life-Cycle and
the a future for Social
Investment?

11. Capability formation:
A life course perspective
Publicly funded child-care
invests in cognitive
skills essential for life
chances of children
Quality of compulsory
education – PISA
studies of core
competencies: reading,
mathematics, science
Skill needs in advanced
industrial societies have
changed –polarization
among youth is a reality
and a threat
The ”learning economy”
requires a constant
renewing of capabilities in
firms and competences of
workers

12. Lisbon Agenda and beyond
• Esping Andersen et al Why we need a
new welfare state
• Giddens Third Way
• European Social Model: Social inclusion
and equality of opportunity

13. The post-neoliberalism puzzle:
Why is a large welfare state compatible
with high in ranking concerning
competitiveness and
investment climate?

14. Lehman Brothers and beyond
The Global Financial Crisis
and its Aftermath

15. What potential for a social investment
paradigm?
• Go beyond immediate responses to the GFC
crisis not to reproduce the failures of the
recent past
• Global crisis in the financial system may
change our views on what is possible.
• Human capital investments getting less
attention in the debate
• How can we rethink the future with the time
horizon being prolonged by the issue of
climate change?

16. The strategy EU2020 puts forward
three priorities:
• Smart growth: developing an economy
based on knowledge and innovation.
• Sustainable growth: promoting a more
resource efficient, greener and more
competitive economy.
• Inclusive growth: fostering a high-
employment economy delivering social
and territorial cohesion.

17. Flaw of the EU 2020 Agenda:
How can the sole focus on expenditure
cuts, generate the necessary revenue for
a social investment approach?

18. The Social Investment
Package
The Legacy of the ’old’ EU
Commission (Andor)

19. Social Investment Package
• Social protection, investment, stabilization
• Recomendation on early child-hood
• Youth Package
• Employment Package
• Elderly care
• Stabilization via EU Unemployment
insurance component
• ESF

20. Social policy opportunities
• Education and human capital formation
as social policy
• Labour market policy and regulation as
social policy
• Migration policy as social policy
• Fiscal policy as social policy

21. Social investment as a paradigm?
Institutional complementarities
• Services and redistribution and insurance
and investment
• Investment and investment
(education and ALMP)
• Emerging social policy paradigm in
search for a new macro-economic model

22. Social investment in a multilevel
framework
• Nexus between social investments and welfare
regimes
• The "embeddedness" in regimes has to be
recognised
• European Social Fund as a driving force for social
investments in the highly diverse welfare regimes
• Performance and results of the ESF interventions
are highly dependent on this embeddedness
• The evaluation of results and effects to be fed into
dissemination/ mainstreaming activities

23. The role of social innovation
• ’Swarm of bats’ or evidence based policy
dissemination of best practise
• Mixed methods:
- Comparative research
- Case studies
- Experiments
• Political economy paradoxes

24. Normative framework –
equality of what
• Income - poverty, inequality
• Capabilities/resources
• Agency
• Access to institutions:
of insurance, service and investment
• Asset formation:
- human capital
- social capital

25. Social policy in EU context, and
beyond
Key concepts in EU
• Social cohesion or social progress
• Social inclusion
• Social capital
• Social investment and social protection
• Social citizenship

26. Social investment approach
is unattainable and elusive,
unless boldness and willingness to take
political and other risks. This includes
raising enough taxes for massive social
investment.