This meeting was attended by Ian Gough, of the WeD Research Group, Bath. Over 200 attended what was one of the best organised meetings ever. The papers varied widely in subject matter and quality. A highlight was the closing address by Gosta Esping-Andersen on 'The Welfare State as Social Investment'. 'Productive welfare' entails state programmes with

a) both a welfare and efficiency effect

b) both an individual and a collective effect

He developed a 'children and women' first argument, demonstrating the high economic pay-offs of investing in child benefits and child care. These are greater still when the benefits of avoiding low fertility and population decline are taken into account. (Some of the projections here are startling: at present fertility rates Spain will have a population of 10 million by the end of the century!).

One implication of this concerns national accounting. If some social expenditure is productive it can be argued that it should be moved from the current to the capital account in government budgets. This would in turn imply that it could be financed by borrowing, just like investment in transport or physical infrastructure (as the World Bank now does when lending money to finance schools or health centres). This in turn has implications for the Growth & Stability Pact and current EU rules on budget deficits. It ties in with earlier arguments by Gough that welfare states can contribute to economic competitiveness.