In This Review

The Political Economy of European Welfare Capitalism
The Political Economy of European Welfare Capitalism
By Colin Hay and Daniel Wincott
Palgrave Macmillan, 2012, 280 pp.

Can European countries maintain their diverse social welfare institutions? To answer this question, the authors of this readable and insightful book move beyond simplistic pessimism about generous social welfare policies. Summarizing widely accepted scholarship, they show that considerable room remains for countries to pursue idiosyncratic policies, despite a common need for some austerity measures imposed by the increasing pace of economic and demographic change. Well-designed welfare systems can coexist with and even strengthen economic competitiveness, as demonstrated by the Nordic countries. Where Hay and Wincott advance their own views, however, the results are uneven. They argue unconvincingly that the European Court of Justice imposed more neoliberal policies on the European Union than governments wanted. But they present a compelling empirical analysis showing that the current economic crisis in Europe has been exacerbated by a decline in trade, which has disproportionately hurt competitive export economies with developed social welfare systems, such as Denmark and Sweden.