Globalization is said to restrict severely the state's capacity to fulfill its welfare function in advanced industrial societies. This paper tests empirically the redistributive capacity of the state operationalized as the difference in percent of households who live below 50% of the median income in their respective country before taxes and transfers and after taxes and transfers, based on the latest Luxembourg Income Study data. Besides globalization, specific sets of domestic political institutions predictably and systematically affect the redistributive capacity of the state: what is termed ‘collective veto points’ buoy redistribution by the state, while ‘competitive veto points’ have the opposite effect. Partisan coloration is introduced as a control variable which, surprisingly, does not affect this critical function of the welfare state. The research design is a cross-sectionally dominant panel design (N=15, t=2). This study finds evidence that globalization and collective veto points both positively affect the redistributive capacity of the state while the converse is true for competitive veto points.

The choice of rules for the central government budget process represents a trade-off between potentially conflicting goals. Budgetary reforms triggered by serious imbalances in public finances over the last two decades indicate that a political reorientation has taken place, giving more emphasis to macroeconomic impacts, long-term budgetary restrictions, and transparency in budget decision making. The paper analyses a number of generic problems of collective decision-making in the fiscal policy area and their relation to fundamental values upon which democratic states are built. The discussion is illustrated by experiences from a major budget process reform in Sweden between 1992 and 1997. The conclusion is that tighter fiscal discipline can be achieved without encroaching upon democratic values; it is argued that democracy can in fact be strengthened by such a shift of regime.

The successful performance of the Danish economy in the 1990s has encouraged scholars to talk about a “Danish miracle”. This article investigates why Danish governments have been able to govern the economy so successfully in the 1990s. It argues that two factors have been important. First, the bargaining position of minority governments has been strengthened. Today, Danish minority governments can enter agreements with changing coalitions in the Danish parliament, as a result of changes in Danish party politics and in the functioning of Danish parliamentarianism. The article thus challenges the conventional wisdom about minority governments as weak in terms of governing capacity. Second, the changed socio-economic strategy of the Social Democrats returning to power in 1993 has been important, because it has created a political consensus around a number of controversial reforms.

The number of public policy conflicts has increased sharply in most western democracies, especially in the fields of planning, regional development, and environmental policy. Attempts have been made to find a way out through new forms of negotiation-based conflict resolution. Alternative Dispute Resolution raises high expectations as to its potential for reaching consensual solutions, to be achieved through extended participation, transparency, and procedural justice. However, success or failure of negotiations do not depend only on the procedure, but also on factors exogenous to it. The first section addresses the question: which exogenous factors affect the opportunities for an agreement in public policy negotiations and how do they exert their influence? Spatial representation of bargaining is used as an analytical framework. The second section shows how outside options, exogenous restrictions, and political directives for the negotiators affected the negotiation space and the final outcome in a case of environmental mediation in Germany.