ABSTRACT
Social democrats progressively have to adapt their strategies in fi scal, social, and labor market policy to the increase in transborder fl ows of goods, services and capital (Bernauer 2000: 28; Boyer and Drache 1996; Hirst and Thompson 1996; Woods 2000). Three developments are crucial to the economic policies of national governments: (1) the growing volume of goods traded internationally; (2) the linkage of production facilities and direct investment (Rodrik 2000); and (3) the development of a global fi nancial market (Held et al. 1999: 220 sqq.; Simmons 1999). The internationalization of markets constrains the policy options of social democracy considerably, but the extent of these constraints is a matter of political perception and scholarly debate.
