While the progressive European politicians are on the lookout for a new model of ‘third way’ capitalism with a human face, after the (temporary?) defeat of the Swedish, Dutch welfare state reform occupies a prominent place in many commentaries.Although it attracted only international attention in the mid- 1990s, the ‘Dutch miracle’ has its basis in policy changes in the early 1980s. For a full explanation of the Dutch experience we must go back at least fifteen years, and study the combination of problem loads, power shifts, institutions, politics and ideas, in three ‘tightly coupled’ policy domains of the Dutch welfare state: industrial relations, social security, and labour market policy. The return to wage moderation took place in the early followed by a series of reforms in the systems of social security in the late 1980s and early 1990s. From the mid-1990s, finally, the adoption of an active labour market policy stance, in order to enhance overall efficiency and create a new domestic balance between wages and social benefits, gained political currency. In this article we present a stylised narrative of these policy changes—what happened, how it happened and what it meant. We demonstrate that these three policy shifts, although embedded in different corporate actors, were interrelated; they created the conditions and the demand for one another, and neither of these policies could have been successful on its own.
Denmark a Nordic Welfare State – Are the Active Labour Market Policy Withering Away?