With the evolution towards more service-intensive social investment welfare states across Europe, research on the institutional capacities of subnational welfare provision is increasingly relevant. Based on a comparative case analysis of three post-industrial municipalities in Europe, this article harbors a two-pronged objective: first, empirically, to show how regional and local governance capabilities are crucial to effective SI policy delivery; second, more positively, to bring out the proficiency of vertical coordination between national administration and subnational layers, alongside the critical role of horizontal policy discretion at the local level to align social benefits and capacitating services for the success of SI delivery; and, by implication, the overall responsiveness of national welfare systems to the changing nature of 21st century socioeconomic risks.

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.