How administrative reforms influence the capacity for implementing the social investment state

For several decades, the social investment (SI) state has been heralded as the saviour of the welfare state, while at the same time being criticised for being just another instance of neoliberal downsizing of the welfare state. Recently, efforts have been made to provide clearer conceptualisations of how to assess the existence and impact of SI. However, these attempts have hitherto mainly focused on the policy functions and instruments of the SI state. This article contributes to existing research by offering a novel analytical framework on the capacity needed by street-level organisations (SLOs) to implement the central policy functions of the SI state, and by elucidating how administrative reforms influence this capacity. The article applies the framework to the implementation in Denmark of Active Labour Market Policies (ALMPs) in local job centres. This case is considered an SI ‘flagship’ in terms of formal policies, while also having undergone multiple administrative reforms, which makes it highly illustrative for the central argument of the article – that the success or failure of an SI approach is not only determined by politics and formal policies. The empirical analysis reveals how the capacity to implement SI policies has been enhanced by administrative reforms; this has been done by giving job centres more room for discretion and enhancing their ability to make long-term investments and to promote integrated service provision across different service areas. However, at the same time the local job centres remain closely monitored and controlled through an external accountability performance measurement system.