One of the characteristics of the ‘new politics of welfare’ (Jordan, 1998) is the emphasis on work as an indispensable precondition of citizenship, at the expense of the traditional emphasis on social rights and equality. To some extent, these attempts to redefine citizenship also represent an effort to make virtue out of necessity. In most countries, political actors have learned from the negative experiences of the 1970s and 1980s when right-soriented and labour-force reducing welfare policies were used to combat unemployment. Even the strongest adherents of generous social protection have to acknowledge that economically unsustainable welfare policies do not leave much room for discussing ideals of full citizenship.

However, this has left a certain notion of economic determinism in social theory – sometimes even more so in sociology and political science than in economics. The question is whether globalisation and technological change (the extent of which will not be debated here) constitute such strong constraints for welfare policies that only one broad path is possible, with the consequence that a new doctrine of full citizenship compatible with economic realities has to be formulated. This chapter will explore, on the basis of recent European experiences, whether there is such a pressure for convergence, or whether several possible pathways are open – pathways with quite different implications for the ideals of full citizenship.

When OECD's new Jobs Strategy was published in 1994 (OECD, 1994), unemployment seemed an insurmountable problem in nearly all European countries, calling for structural reforms that could adapt these welfare states to new demands of ‘flexibility’ in a globalising economy. The job-generating capacity of the American economy in the 1980s and 1990s stood in sharp contrast to declining employment rates in Europe, where countries seemed faced with a trade off between equality and employment, at best, or caught in ‘Eurosclerosis’ at worst. Although the OECD strategy recommended a mixture, with more socially orientated elements in line with European traditions, the neoliberal cure stood almost as an imperative. Except for a few countries with very ‘special economies’, such as Norway, Switzerland and Luxemburg, all countries seemed to face the same problems. Even Sweden's heralded ‘third way’ of active labour market policy had failed dramatically.