The Financialization of Social Policy. Political Trends and Coalitions in the Age of Austerity

This paper introduces the debate on the relation between financial markets and welfare states in the provision of social security. Reviewing recent trends in the areas of old-age provision, housing, credit/debt and social impact investing, it shows the ambivalent relationships constituting the welfare-finance nexus: financial markets can both guarantee and restrict (traditional) social policy and financial products can act both as a complement and as a substitute for publically-provided social security; moreover, while in some cases intended to solve social problems, financialisation also creates new problems and requires new social policies. As a starting point for a comparative investigation of the welfare-finance nexus, the paper concludes on the political coalitions underpinning this nexus in the case of pension reform.