ABSTRACT
In many developed countries, the sustainability of employment, welfare, and development policies has been increasingly challenged by anaemic rates of economic growth, the complexity of society, and growing demands for services. The capacity of general-interest services to satisfy the needs of citizens has declined as the demand for these services-especially social, health, educational, and environmental services-has increased. The appearance of new needs and the increasing differentiation of existing ones have made demands by citizens more wide-ranging and complex. In addition to the difficulties generated by fiscal crises, the public supply of standardized services has proved incapable of satisfying users with differentiated needs. Labour and employment policies have often failed to maintain low unemployment rates and critics have complained that some of these policies provide disincentives for the unemployed to accept job offers. Clearly, these policies have failed to tackle long-term unemployment and underemployment by the disadvantaged. Theinabilityoflabourandemploymentpoliciestoensurethatallworkerscanfind jobsthatallowthemtobenefitfromtheircapabilitieshasresultedinwidespread and persistent exclusion of individuals and groups from the labour market. Development policies managed by international institutions and national governmentshaveincreasinglyprovedtobeinsufficientandineffective.Theamount of public expenditure committed to development issues has decreased over recent decades, and aid programmes have been unable to support balanced economic development at regional and international levels. Moreover, preferences by governments for top-down initiatives have often prevented the empowerment ofbeneficiariesand,asaresult,spawnedinitiativesthathavefrequentlyproved to be unsustainable. Several innovations have been introduced by national governments to improve the effectiveness of these policies. Reforms have strongly reshaped the range, organization, and delivery of welfare and general-interest services, including the roles played by public and private actors. Private managerial models have increasingly been adopted by public institutions, and many services have been privatized, mainly through the transfer of production to private providers with public funding. In some cases, public commitment to funding such services has been curtailed. The reforms that have been introduced have often failed to
achieve satisfactory outcomes, and indeed they have contributed to a growing imbalance between the demand and supply of general-interest services, especially in the key areas of health, social services, and education. Labour and employment policies have also been reformed in many respects. The main driver of these reforms has been the shift from passive to active employment policies. Unemployment subsidies have been shortened in duration and the rate of substitution has been reduced. New welfare-to-work policiesinvolving training schemes, employment services, and employment subsidieshave been introduced with the aim of reducing unemployment spells. The labour market has been deregulated in order to increase the level of employment, often by creating temporary and low-paid jobs. Public employment services have been privatized in most countries and forced to compete directly with the remaining public services. These reforms have had mixed effects, with some of them-particularly active labour market policies-contributing to increases in employment, though the rate of unemployment has not declined as expected. Many of the new jobs created are short term, and these have contributed to a broadening sense of precariousness. Long-term unemployment has not been curbed and tends to be concentrated among certain groups. Development policies have strengthened the ‘trade not aid’ strategy that considers international trade the main driver of economic growth. This strategy has been supported by the process of globalization and used to justify reductions in aid programmes. Increased trade has achieved positive results for some countries, but has failed in others, leaving more than one billion of the world’s population living in poverty. Increased trade has proved to be ineffective in sustaining economic development and job creation, especially in countries where underdevelopment can be considered a consequence of poorly functioning markets. Moreover,tradeliberalizationhasnotalwaysreflectedtheconcernsofdeveloping countries and generally not involved agriculture, which is the economic activity most capable of supporting broad-based and balanced development. Many scholars have analysed the impact and shortcomings of reforms upon providers, users, and funders.1 Most of these analyses, however, have not taken into account the extent and vigour of voluntary responses to these issues by individualsandgroups,andhowtheseresponsesdifferfromthoseofbothfor-profit enterprises and public institutions. Particularly noteworthy has been the developmentofprivatenot-for-profiteconomicactivitiesthathavegivenrisetoinnovative organizations that are motivated by preferences that are not self-seeking. These bottom-up initiatives can be interpreted as concrete expressions of an increasing sense of social responsibility on the part of citizens and as an ‘endogenous response’ to their discontent about the shortcomings of public policies. This emerging economy of social responsibility has entailed an enlargement of existing actors and activities. By stimulating responsible economic behaviour, these initiatives have had a strong impact upon the well-being of society and supported the institutionalization of collective participatory practices. These initiatives have also called into question conventional economic paradigms and paved the way for new theoretical explanations of economic behaviour.
