Europe’s affluent democracies have adopted different policy strategies to buffer their labor markets from the effects of the worldwide recession that followed the financial crisis in 2007. In accounting for this divergence, scholarship has conceptualized national responses as reactive, with their specific content flowing from long-standing institutional differences. This paper argues that contemporary approaches to accounting for such path-dependent institutional evolution are insufficient. In contrast to arguments emphasizing institutions’ functional benefits and the empowerment of dominant producer groups, we find that governments had significant scope to devise partisan employment policies. Focusing on policy choices under consecutive governments in Great Britain, Germany and Denmark, this paper discusses the processes through which widely shared norms simultaneously bounded public policy while leaving governments with room to pursue institutional changes. As the paper shows, a full understanding of employment policies’ evolution requires attention to how partisan actors can strategically play the normative limits of countries’ distinct moral economies.
