Raising employment has been at the heart of EU strategies for over twenty years. Social investment, by now a widely debated topic in the comparative welfare state literature, has been suggested as a way to pursue this. However, there are only a couple of systematic comparative analyses that focus on the employment outcomes associated with social investment. Analyses of the interdependence of these policies with regard to their outcomes are even more scarce. We empirically analyse the extent to which variation in employment rates within 26 OECD countries over the period 1990-2010 can be explained by effort on five social investment policies. We additionally explore the role of policy and institutional complementarities. Using time-series cross-section analyses we find robust evidence for a positive association between effort on ALMPs and employment rates. For other policies we obtain mixed results. ALMPs are the only policies for which we observe signs of policy interdependence, which point at diminishing marginal returns. Additionally, our analysis demonstrates that the interdependence of social investment policies varies across welfare state regimes. Together, this indicates that the employment outcomes of social investment policies are also contingent on the broader framework of welfare state policies and institutions.

How do political economic institutions and different types of institutional complementarity in particular influence firm behavior? Existing studies do not offer much help in answering this question. In this research, we systematically connect institutional complementarity and its two distinct logics (the logic of reinforcement and the logic of compensation) to firm performance. Using a sample of more than fourteen thousand firms from twenty advanced industrial democracies, our empirical analysis finds that institutional complementarity is related to firm performance in a distinct way. That is, the different logics of institutional complementarity apply only to specific segments of the economy. While the logic of reinforcement works for small firms and labor-intensive firms, the logic of compensation favors large firms and capital-intensive firms. The empirical novelty of our research lies in offering a cross-national, firm-level and large-n analysis of institutional complementarity. Theoretically, our finding of firm heterogeneity helps in establishing the boundary conditions of institutional complementarity and hence advances the general understanding of the subject.

Evaluation studies of active labour market policy show different activation measures generate contradictory results. In the present study, we argue that these contradictory results are due to the fact that the outcomes of activation measures depend on other institutions. The outcome measure in this study is the long-term unemployment rate. Two labour market institutions are of special interest in this context: namely, employment protection and unemployment benefits. Both institutions, depending on their design, may either increase or decrease the effectiveness of active labour market policies in lowering long-term unemployment. Based on an analysis of macro-level data on 20 countries over a period of 16 years, our results show that employment protection strictness and unemployment benefit generosity interact with the way in which active labour market policies relate to long-term unemployment. Our results also indicate that, depending on the measure used, active labour market policies fit either in a flexible or in a coordinated labour market. This suggests that active labour market policies can adhere to both institutional logics, which are encapsulated in different types of measures.

This paper focuses on the roles of formal rules (laws) in institutional emergence, sustenance, crisis, and transition based on an examination of the Meiji Restoration and the Xinhai Revolution. It describes how formal rules in the polities of Qing China and Tokugawa Japan were enforced, supplemented, or modified by the strategic interactions among the ruler, the intermediate organizations, and the peasantry. It then discusses how the strategic complementarities between the ruler and the intermediate organizations were transformed into strategic rivalries in response to changes in the economic and foreign environments, resulting in the demise of dynastic rule in each country. The post-transition constitutional design was affected by the ways in which the strategic reconfigurations had led to the demise of the dynastic rulers. This historical narrative suggests that formal rules per se do not necessarily create institutions in the sense of an integral pattern and process of social behaviour and ideas. A formal rule can function as a substantive form of an institutional process if, and only if, it mediates between a recursive state of strategic interactions among agents and individual belief formation in order to sustain the social order.