This paper shows how interactive governance can be helpful in dealing with information asymmetries in the design and administration of public policy. It describes the checks and balances of a properly incentivized mechanism design of contextual or situational contracting that reveals information on diversity in demand for public intervention, deals with complexity, creates commitment to the public cause and disciplines uncooperative behavior. The contractual mode, moreover, discloses the actual trade-offs between rivalling criteria of good governance such as individual freedom, efficiency, distributional concerns and sustainability, deepening our insight in who gets – or pays for – what, when, where, how and why, as the key issues of policy analysis. Evidence from early applications is combined with suggestions for rolling out this new mode of relinking public policy, implementation and external control.

In the 1990’s, the Dutch social democrats were trailblazers of what became known internationally as the politics of the Third Way, a new middle course between social democracy and neoliberalism. From the start, the Dutch Third Way distinguished itself from its Anglo-Saxon counterparts by its implicit character. The Dutch social democrat party (Partij van de Arbeid, PvdA) never fully embraced the Third Way and has sought to downplay the idea of a break with traditional social democratic thinking, combining Third Way practice with more classical social democratic rhetoric. The resulting political ambiguity, this paper argues, is at the centre of the present identity crisis of the social democrat party. Even though Third Way ideology has at times been declared dead, the range of attitudes, strategies and policy proposals that were introduced under its banner, still play a vital and prominent role in Dutch politics. While in the UK and the US, communitarianism was from the very beginning a defining feature of the Third Way, in the Netherlands this only came to the fore in 2012 under the leadership of Samsom and Asscher, and in the plea for a participation society under the Rutte II government. Leading us to conclude that the reports of the Third Way’s death are greatly exaggerated.