We propose theoretically that the government partisan effect on institutional welfare state reforms is significantly stronger than on policy reforms. Policy reforms impose losses or gains on electoral sub-constituencies and therefore are driven by an electoral logic. Institutional reforms redistribute institutional power resources between political actors, but are inconsequential for voters in the short run. Without clear electoral repercussions, partisan governments are relatively free to seek long-term policy goals through institutional re-arrangements. We evaluate these propositions in a cross-country comparative analysis of all major policy and institutional reforms in labour market policy in Sweden, Denmark, Spain and the Netherlands in the period between 1982 and 2011. We find the expected pattern of especially strong partisan effects in institutional welfare state reforms.

Why do Austria and the Netherlands, two highly corporatist, coordinated, consensual countries diverge with respect to the involvement of social partners in their Public Employment Service? By comparing and contrasting the competing predictions of the power‐resource, employer‐centred and social partnership approaches, we identify a key omitted variable that can explain the observed variations: the ability of the social partners to unite on reform positions. We demonstrate that when the social partners are divided, their collective power is reduced and partisan‐based policy outcomes become more pronounced. In turn, when the social partners jointly favour a particular outcome, their collective power increases and they can override governmental reform plans, even if the government holds a large legislative majority. These findings highlight the causal importance of power relations between and within the social partners for institutional continuity and change.

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In this chapter we assess the buffer and flow dimension of the social investment state for early school leavers and lone parents in the Netherlands. By applying an ‘at-risk household-type model’, we show that the buffer function of the welfare state for the two risk groups out of work has declined in the last decade, particularly for early school leavers. On the other hand, the buffer function, in terms of minimum income protection, for those risk groups that have acquired paid employment has significantly improved. In terms of labour-market flow, we show that capacitation of risk groups is an explicit aim of service delivery at the local level in the Netherlands. On the other hand, capacitation was brought in jeopardy by recent budget, which undermined the flow function for precarious risk groups. Both the buffer and flow function of the Dutch social investment state point to an ambivalent reform path.