Should we explain the disappointing outcomes of the Open Method of Co-ordination on Inclusion by methodological weaknesses or by substantive contradictions in the ‘social investment’ paradigm? To clarify the underlying concepts, we first revisit the original ‘Lisbon inspiration’ and then relate it to the idea of the ‘new welfare state’, as proposed in the literature on new risks in post-industrial societies. We then discuss two explanations for disappointing poverty trends, suggested by critical accounts of the ‘social investment state’: ‘resource competition’ and a ‘re-commodification’. We do not find these explanations convincing per se and conclude that the jury is still out on the ‘social investment state’. However, policy-makers cannot ignore the failure of employment policies to reduce the proportion of children and working-age adults living in jobless households in the EU, and they should not deny the reality of a ‘trilemma of activation’. Finally, we identify policy conditions that may facilitate the complementarity of social investment and social inclusion.

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