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I Introduction
Active labor market policies (ALMP) aim at enhancing labor market mobility and
adjustment, facilitating the redeployment of workers to productive activities and, generally,
enabling people to seize new job opportunities as they arise (OECD 1994b: 100). ALMP
comprises spending for public employment services and administrations, labor market
training, youth measures, measures for the disabled and subsidized employment. The latter
comes in three forms: (a) as subsidies to private sector employers to encourage them to hire
unemployed workers, (b) as assistance to unemployed persons starting own business and (c) as
direct job creation in the public sector. In contrast, a passive labor market policy consists of
spending for unemployment benefits and for early retirement.
ALMP has been developed in Sweden as one crucial part of the social democratic
strategy making competitiveness of an open economy compatible with full employment and
social justice. Starting out as a genuinely social democratic policy, ALMP has been accepted
by liberal and conservative politicians as well as by liberal economists. It is market-enabling
and for these reasons it fits into a liberal ideology. And it aims at social security without being
necessarily redistributive and without changing established social hierarchies. This makes it
acceptable to conservative politicians. In this sense ALMP is a ‘one size fits all’-policy and in
principle there are hardly arguments against governments engaging in ALMP. Therefore in
case of labor market problems ALMP seems to be a first class solution. The only political
problem of ALMP may be the mobilization of the resources needed for these measures.
Designing and implementing ALMP is much more demanding than introducing
unemployment insurance. For these reasons governments have incentives to mimic successful
policies in other countries. International organizations specializing in the spread of ‘best
Convention