How Democracies Transform Their Welfare States: The Reform Trajectories and Political Coalitions of Inclusive, Stratified, and Targeted Social Investment Strategies in Capitalist DemocraciesThe Reform Trajectories and Political Coalitions of Inclusive, Stratified, and Targeted Social Investment Strategies in Capitalist Democracies

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The chapter maps the development of welfare state reforms in Western Europe and Northern America, central and eastern Europe, North East Asia, and Latin America. It identifies specific trends such as the focus on demographics in Asia, new instruments to fight poverty in Latin America, a novel human capital perspective in the Baltic region, the focus on activation and family policies in Continental Europe, and de-universalization in Scandinavia. It provides systematic comparative analyses of social investment politics in democratic context throughout the world. It identifies four main political coalitions behind the various types of social investment reforms: two social democratic coalitions based on the alliance between representatives of the educated middle class and the working class, with a Nordic version leading to inclusive social investment and a Latin American version leading to targeted social investment; a conservative coalition, where the middle class is allied with employers, leading to stratified social investment favoring human capital mobilization typical of Continental Europe or North East Asia; and a liberal coalition, where the same middle class–employers alliance emerges, but in the context of liberal welfare regimes it leads to social compensation retrenchment substituted by some targeted public social investment policies (and private ones publicly supported via fiscal exemption) as in North America and the Baltic countries. It also identifies a social protectionist coalition, when social protection legacies are strong and when the educated middle class is not large enough to constitute an appealing electoral constituency, as in Southern Europe and the Visegrád countries.