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The chapter examines the common pressures on employment and the welfare state that originated from changes in the international economic environment after the early 1970s, and it relates these to national economic conditions and policy legacies in order to identify differences of vulnerability and varying demands on the institutional capacity for policy adjustment. In the earlier period until the mid‐1980s, these challenges were of a macro‐economic nature, and the effectiveness of national policy responses depended primarily on institutional capabilities for effective coordination between wage policy and monetary policy. After the mid‐1980s, the dominant challenges arose from the global integration of capital markets and the increasing intensity of international competition in product markets. Now the greater or lesser vulnerability of countries was primarily determined by the structure of their welfare states – in particular by the dependence on particular sources of finance and by their effects on service employment in the sheltered sectors. What mattered was the institutional and political capacity to adopt and implement unpopular changes in the policy legacies of the welfare state.

The conclusion emphasizes more general patterns that were identified in the comparative analyses. If due account is taken of the specifics of economic changes and national policy legacies, the variation among the responses of individual countries is far from random. In each of the periods covered by the study, there were distinct groups of countries facing similar policy challenges that would have called for similar responses. And even though the increasing internationalization of the economic environment has narrowed the range of economically viable national policy choices, we are able to show that in each of these groups, one or more countries did in fact have the institutional capabilities and the policy discourses that allowed them to move “from vulnerability to competitiveness” without abandoning their normative aspirations or jeopardizing the democratic legitimacy of their governments.

The regime complex for crisis finance in the euro area included the European Council, Council of the European Union, and Eurogroup in addition to the three institutions of the troika. As the member states acted largely, though not exclusively, through the council system, these bodies stood at the center of the institutional mix. This chapter reviews the institutions as a prelude to examining the dilemmas that confronted them over the course of the crises. It presents a brief review of some of the basic facts about their origins, membership, and organization. Each section then delves more deeply into these institutions’ governance and principles to understand their capabilities and strategic challenges. As a consequence of different mandates and design, the European Commission, European Central Bank, and International Monetary Fund diverged with respect to their approach to financing, adjustment, conditionality, and debt sustainability. This divergence set the stage for institutional conflict in the country programs.

The chapter argues that building of institutional capacity for sustainable urban water management would require scientific planning of urban areas with due consideration to their main characteristics as they would have significant impact not only on the physical performance of the water systems, but also on the performance of the urban water utilities. On the other hand, the sustainable development of cities would largely depend on the ability of the cities to meet their growing water demands. Therefore, the master plans for future expansion of urban areas should take cognizance of the regional water resources scenario. Given the wide variation in physical, socio-economic and administrative set ups, a uniform water policy is not going to work across all urban areas. No policy can be uniformly applied across typologies. While policy objectives will change according to the typology, the policy instruments will also change.