This innovative edited collection seeks to help shape the academic and policy debate over the future of the welfare state in Europe by introducing and advocating Amartya Sen's “capabilities approach.” Since the editors' primary objective is to promote a particular set of policies, there is little effort by contributors to explain policy variation across European Union member states or over time, which is the collection's main weakness. Rather, this distinguished group of academics and practitioners evaluates European economic development policies and prescribes a course of action consistent with the capability approach.

Since Sen received the Nobel Prize in Economics in 1998 and published Development and Freedom (1999), his view that economic growth is best facilitated by enhancing individual capabilities and freedom has become very influential in the field of development economics. However, his “capability” approach does not figure prominently in the comparative welfare state literature. According to the editors, the “true question for social policies is … to struggle against inequality of capabilities and to open for all an effective freedom” (p. 1). Thus, rather than focusing on job creation, economic and social policies should foster the development of individual capabilities affecting actors and workers, as well as communal capabilities affecting firms and territories, which would in turn stimulate economic development (p. 6).

More specifically, the editors argue that Title XI of the Treaty of the European Union (Social Policy, Education, Vocational Training and Youth) should be given “absolute priority” over Title VIII (Employment) (p. 11). In addition, they assert that EU initiatives, rather than national solutions, are essential if collective and individual capabilities are to be enhanced (p. 6). Adopting such an approach ultimately requires reforming and strengthening the EU's neocorporatist system by promoting multilevel frameworks such as the European Social Dialogue (ESD) and the European Employment Strategy (EES). Significantly, the contributors find that the “open method of coordination” (OMC), which currently enables member states to determine their own individual employment policies within these programs, must be rejected and Europe-wide benchmarks (though not of a statistical nature) established if these programs are to be effective (p. 15). Member states often invoke the principle of “subsidiarity” (the notion that policies should be formulated at the lowest feasible level), but the editors believe that this principle must be reinterpreted so that “common” European norms override national variations (p. 16). None of this is to say that the contributors favor a top-down approach involving significant new legislation by the European Council; instead, they favor a multilevel decentralized approach entailing a prominent role for subnational public and private actors. Indeed, this tension between European and national and subnational political and policy authority represents the most compelling intellectual development of this book.

The strength of this collection, which is organized into three sections and includes 18 chapters, is its focus on EU programs and their relationship to local economic development. For example, Serafino Negrelli finds that factors such as inadequate local administration and an overwhelming number of participants have limited the effectiveness of Italian “Territorial Pacts” (pp. 86–87). Similarly, Pierre-Paul Zalio's case study of Marseille in the 1990s argues that local capabilities, including “not only financial but relational and deliberative resources” are vital for spurring economic growth (p. 106). Other contributors come to similar conclusions, encouraging more energetic participation by local elites—even at the expense of national actors—from both the public and private spheres. Indeed, Jacky Fayolle and Anne Lecuyer find that the EU's regional Structural Funds have a limited positive effect on regional economic growth because the nation-state is “impeding the effectiveness of EU structural policy” (p. 156).

In the concluding chapter, Robert Salais contrasts a typology of social welfare states based upon the capability approach with Gøsta Esping-Andersen's familiar “three worlds” scheme. Arrayed along two dimensions, “freedom for what” and “equality of what,” Salais offers four possibilities (p. 296): the “market world,” consisting of the Anglo-Saxon countries; the “well being world,” including the Scandinavian social democracies; the “status world,” comprising the continental corporatist regimes; and the “capability world,” which combines the preferred features of the Scandinavian social democracies with the most admired aspects of the conservative corporatist regimes (but includes no members at present). As Salais concludes: “If Europe were to follow a capability approach and adopt an ethics of objectivity, it would refuse to assert normative priority among the three classical models of the Welfare State (Anglo-Saxon, Continental or Scandinavian), or between them and the market” (p. 292).

This late attempt to situate the volume within the broader comparative welfare state literature was much appreciated. However, I am not convinced by Salais's attempt to locate the capability approach within the “Worlds of Welfare Capitalism”—or, at the very least, the preceding chapters do not support his assertion. Perhaps if a case study of a Scandinavian social democracy had been offered in addition to continental countries such as France or Italy, his argument might have been more persuasive.

I would argue that the capability approach as described by the contributors is neoliberal corporatist, with a large degree of European federalism included. For example, the editors acknowledge that in “retaining the positive aspects of liberalism while removing the negative ones, a capability approach offers a credible alternative to so-called ‘neo-liberalism’” (p. 8). Thus, the capability approach assumes that the marketplace is the most efficient mechanism for translating individual human capacity, enhanced by public policies, into genuine choice and economic growth. How then do we end up with a cross between continental welfare states and Scandinavian social democracies? Furthermore, little effort is made to examine public policies directed toward vulnerable groups such as children, the poor, or retirees. In fact, when he addresses pension reforms in his concise history of social security provision, Noel Whiteside argues that the capability approach would “offer citizens a second or third active life” (p. 270). In other words, the elderly must keep working. These features are not portrayed in Salais's “Capabilities World” typology, which seems more like Tony Blair's “Third Way” to me.

In conclusion, scholars interested in European regional and employment policies should add this volume to their reading list, while those who are more interested in examining European social policy toward vulnerable groups or reframing the debate over the welfare state can afford to overlook this contribution.