Introduction

The Dutch government and the social partners may have become famous for their consensus on wage restraints, but they did not manage to agree on drastic changes in the social security system to fight the recession of the 1980s. ‘We did not do politically what we had to do economically because we could not do it socially,’ explained the chairman of the Dutch Employers’ Federation vno (Van Veen, cited in Vermeulen 1992: 61). Van Veen called this ‘the magic circle that captivated us’ (ibid.). This ‘magic circle’ is also a good metaphor for the policy-making process of the disability insurance system until the early 1990s. What was economically imperative was at the same time socially unacceptable and, therefore, politically impossible. Meanwhile contradictions between the insurance system and its rapidly changing environment had accumulated. In the end, the ‘magic circle’ around the Dutch welfare state had charmed one out of every ten citizens into a strange kind of sickness: the so-called ‘Dutch Disease.’

Although they had not announced this at the time of the elections one year earlier, it would take fifteen years before the Dutch government would decide to do anything about the disability problem. Vlek (1997) argues that the crisis around the disability insurance situation of 1991 was a turning point in the postwar history of the Dutch welfare state. ‘Never before did a prolonged financial crisis of the Dutch state turn so directly into a political crisis, in which the political elite faced a massive rejection of its policy concerning welfare state arrangements’ (p. 280).

The reforms set in motion in the summer of 1991 resulted in unprecedented government cutbacks in social security.2 The accumulated savings of 1992 and 1993, as a consequence of the proposals introduced since 1991, comprised more than the total savings of the austerity regimes of the prior six years (Vlek 1997: 469). Taboos on the administration of social security insurance schemes were all but abolished. After a century of struggling with the social partners, the discussion of who would govern the social security system was settled in favor of the state. As we discussed in chapter 3, the Dutch reforms on disability insurance meant great upheaval in a previously stable system.