This book examines the transformation of contemporary social democracy through the concept of 'third way' reforms. It proposes a set of theories about the possibility for continuing social democratic ideological adaptation, for ideologies to overcome institutional constraints in triggering path-breaking innovations, and for social democracy to bridge the insider-outsider divide. Empirically, the book utilizes these theories to account for social democratic welfare state and labor market reforms in nine OECD countries after the end of the Golden Age. Based on the logic of 'public evils', the book proposes that the ideologically contested nature of institutions provides incentives for institutional innovation. Social democratic ideology shapes the fundamental characteristics and content of the third way policy paradigm, and the paradigm's practical implementation continues to be path-dependent on historical institutional settings.

“Anyone who wishes to understand the changes in political-economic strategies European Social Democrats have undergone in the past two decades will want to turn to Huo’s detailed account. It provides a comprehensive overview, organized within a clear analytical framework that enables us to identify the differential explanatory power of important theoretical frameworks commonly employed in the comparative study of welfare states and macro-economic policy-making. More generally, Huo’s study helps to grasp the dynamic of institutional change.”
-Herbert Kitschelt, Duke University

“This book marks a major leap forward in the study of social democracy. Analyzing the theory and implementation of ‘Third Way’ reforms in exhaustive detail across nine cases, spanning Scandinavia, Western Europe and the Antipodes, Huo engages critically with the mainstream approaches in the literature, including the notion of path-dependence in determining policy outcomes, proposing a power-resources argument in their stead. His contention that the ‘Third Way’ is a principled renewal rather than a retreat from social democratic tradition will raise plenty of controversy.”
-Martin Rhodes, University of Denver

“No one has conceptualized so clearly social democratic ‘third-way’ policies as Huo does in this book. Nor has anyone provided such an insightful analysis of their development, implementation and degrees of success in a relatively large number of countries. The central argument is important: partisan politics and governance, especially social democratic party electoral success and rule, while institutionally constrained, is the key to understanding cross-national differences and change in labor market and employment policies in post-industrial democracies. The book can be highly recommended to all students and scholars of comparative and European political economy.”
-Duane Swank, Marquette University