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The Social Investment Paradigm: Achievements and Shortcoming

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

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The Social Investment Paradigm: Achievements and Shortcoming

  1. 1. The Social Investment Paradigm: Achievements and Shortcoming Joakim Palme Department of Government Uppsala University
  2. 2. In brief: Unlcear achievements as the major shortcoming
  3. 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. 4. Genealogy of social investment
  5. 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. 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. 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. 8. Goals of the welfare state • Redistribution • Insurance • Reproduction (care services) • Investment • Savings
  9. 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. 10. The Econonomic Life-Cycle and the a future for Social Investment?
  11. 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. 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. 13. The post-neoliberalism puzzle: Why is a large welfare state compatible with high in ranking concerning competitiveness and investment climate?
  14. 14. Lehman Brothers and beyond The Global Financial Crisis and its Aftermath
  15. 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. 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. 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. 18. The Social Investment Package The Legacy of the ’old’ EU Commission (Andor)
  19. 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. 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. 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. 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. 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. 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. 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. 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.

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