Introduction

‘I always point to Belgium as a good example when I lecture on Bismarck's nineteenth-century plans to create occupational social insurance. Not only did the development of social insurance in Belgium closely resemble Bismarck's plans at the time, in fact the old system is still pretty much intact’ (Klosse 030128). The Belgian system displays features of occupational insurance, characteristic of the industrial age it came from. Today, many of its attributes are unique in Europe, since in most countries, governments chose to restructure their social insurance system in response to a changing social, industrial, and demographic context. For instance, Belgian child and family allowances are still part of the occupational insurance system, just like health care costs, which in many other countries are part of a universal insurance plan since the risks covered are seldom related to the workplace. Trade unions transfer the benefits to the unemployed, while employers transfer the child allowances. The system's policy making and implementation aspects are fragmented along traditional ideological cleavages: Catholic and secular, labor and capital, and, more recently, along a regional divide. The fact that the Belgian social insurance system displays so many characteristics of the highly industrialized society of a century ago, is enough to make us suspicious about the extent of the possible reforms. Is drastic reform an impossibility in Belgium, and if so, does that explain the resilience of its social policy institutions over the past century?

Suspicion of Belgium's inability to reform does not hold when one considers the constitutional changes enacted over the past 20 years. In fact, the constitution has been turned inside out to meet the rising demands for more regional autonomy. Unlike many other federal states, Belgium became a federal state due to centrifugal tendencies whereby a unitary state divided into separate parts (instead of previously autonomous regions uniting into a federation). Reforms that took ages to materialize in the Netherlands and France, such as redrawing the boundaries of municipalities, were quickly realized in Belgium (Brans and Maes 2001; DeWachter 2001: 244).

If it weren't for post-industrialization, globalization, demographic changes, and social cultural changes that challenged the Belgian system, social policy reform would have been unnecessary. However, the Belgian budgetary and economic situation at the beginning of the 1990s was alarming.