The nature of Dutch democracy, once considered a highly stable product of cooperation, compromise and consensus-seeking practices across socioeconomic and sociocultural lines, has changed. Whereas the accessibility and levels (not forms) of participation have changed little, autocratically led protest parties have won ground and in the polls draw support from a stable 15% – 17% of the electorate. Corruption prevention in politics, especially regarding party finances, appears to fall under the bar of international standards. Political rhetoric has grown increasingly polarized (or politicized) as the political middle is waning and extreme positions on either side are on the rise. The Dutch media landscape remains highly pluralistic, although there are some concerns about the growing concentration of media ownership, a situation aggravated by the present financial economic crisis, rapid commercialization, and international ownership of national media outlets. In legal arrangements, citizens‟ right to privacy is subject to pressures from the information revolution and the massive use of information technology (IT) in all kinds of policy fields, primarily relating to internal and external security. In addition, some conspicuous miscarriages of justice have spawned a public debate on the quality of the justice system, including the need for a special court charged with handling mistrials. Anti-terrorism and integration policies have put considerable pressure on the exercise of basic political liberties, such as the freedoms of speech, religion and press as well as protection against unreasonable search and seizure actions. Tough immigration laws have come under international legal scrutiny, in particular where the rights of children and family reunion are concerned. In short, although the quality of Dutch democracy remains satisfactory, it has suffered several blows in several areas. Policy-specific performance during the Balkenende IV government – the coalition cabinet formed by the Christian Democratic Appeal (CDA), Labor (PvdA) and Christian Union (CU) parties – was in general incremental, save for the proposal to phase-in an extension of the pension age to 67 that was adopted by the cabinet in 2009. Policy performance in matters relating to internal and external safety remained adequate, although at rising public cost. The Health Care Insurance Act (Zvw) of 2006 was continued, although its impact on cost control issues and enhancing market-like competition between health care providers remains unclear. Stagnation continues to characterize environmental, research and development, and innovation policies alike. No changes have been made to education Netherlands report SGI 2011 | 4 policy, although it is now generally judged to be in crisis. Serious concerns have been raised about the lack of good teachers, literacy and numeracy skills among elementary students, and high attrition rates at all levels of education. As is the case in most other European countries, the financial and banking crisis (followed by the euro crisis) has proven detrimental to economic policy performance, which negatively affects prospects in almost all other policy areas. Strategic Outlook The long-term viability of the D utch polity depends on the acumen with which the three following challenges are treated: the state‟s weakened fiscal position; facilitating technology innovation in order to develop an ecologically modernized and sustainable economy; and societal integration and coherence. (1) Improving the state‟s weakened fiscal position. The state‟s financial problems can in large part be attributed to recent bailouts of Dutch banks and financial businesses, as well as individual euro zone countries and the euro itself. An effective long-term solution to these fiscal problems therefore requires (domestic as well as European-level) reforms involving stricter regulation and oversight in order to improve risk-management. The Dutch government must also undertake substantive reforms in the banking and financial sector. (2) Improve technology innovation in order to ensure an ecologically modernized and sustainable economy. The Dutch government must invest more wisely in efforts targeting the transition to renewable and alternative energy sources, such as wind and solar energy. The government will also need to pursue a structural reform of the education system, which is in a state of crisis. (3) Facilitate societal integration and coherence while implementing flexicurity policies. The Dutch welfare state urgently needs reforms that ensure continued investment in human capital while protecting workers and families from the brunt of structural adjustments. Opportunities for combining work and family life ought to be expanded and improved. The pension system and the moribund state of its financial underpinning must also undergo reforms. Social coherence will not be advanced through tighter immigration and citizenship policies. Instead, policies focused on urban and residential area renewal should be sustained through adequate funding. Netherlands report SGI 2011 | 5 A sound, functional democracy requires clearly structured forms of issue-specific, interactive policy-making in which citizens‟ voices are represented. In tripartite governance structures like that of the Netherlands, the primacy of politics vis-à-vis markets and civil society ought to be reconfirmed. Where possible, politics should respect the self-regulation of citizen life and markets. But as the only institution capable of regulating tripartite relations, the state must also live up to its responsibilities in maintaining the framework in which democratic decision-making takes place.