The social contract is the unwritten agreement between citizens and governments. It represents what we expect from institutions, and our obligations and duties to those institutions and society in general. People work and pay taxes in exchange for goods and services, security and democracy – or, in practice in most cases, the opportunity to vote in elections from time to time. But this contract is not always fulfilled. Even in economically wealthy countries, in so-called developed nations, the social contract often falls short. Two out of three European citizens have little or no trust in public institutions, and one in three believes that the country they live in is not sufficiently democratic. This is a clear sign that something is not working as it should.
It seems that we are living in an increasingly complex world. There is a perception that there have been no tangible improvements to overall living conditions, and citizens’ expectations of their governments are changing. Generalised dissatisfaction with certain aspects of life and growing despair are powerful drivers of social change. Our report provides empirical evidence confirming that the current political and economic system is failing to deliver on the aspects that people expect from it. The current social contract is failing on its own terms and is increasingly showing signs of breakdown. Moreover, this is all happening at a time when misinformation is more prevalent than ever and the selfish interests of a few are accumulating excessive economic and political power. Therefore, understanding what is failing in our society is also crucial to prevent demagogic narratives from setting the agenda and pushing us in the wrong direction.
Building on our previous research, we propose a framework structured around four pacts that have emerged since the 18th century: work-welfare, democracy, security and consumption. Efforts by European institutions to harmonise social conditions across member states have had some effect, leading to a degree of convergence. Nevertheless, regional disparities remain severe. The Nordic countries lead in compliance with the social contract, followed by Western Europe, while post-communist and Southern European countries lag behind.
First is the work–welfare pact, a pillar that is still standing but increasingly fragile since it is declining in all European regions. The main improvements observed are largely linked to recovery in countries that were hardest hit by the 2008 financial crisis, while most indicators show stagnation or deterioration in recent years.
Secondly, the democratic pact. Here, clear regional patterns emerge, with a generalised stagnation and only minor improvements in some Mediterranean and post-communist countries. Regions with lower scores tend to face serious challenges related to corruption and satisfaction with democracy.
Thirdly, the security pact, which presents a picture that differs from what often dominates political debates. A steady improvement can be observed, even in recent years and even in regions that already score highly. The heterogeneity of the indicators suggests that improvements in richer and poorer areas follow different paths rather than a single common trajectory.
Finally, consumption stands out as the main driving force behind the social contract. Income levels and consumption opportunities have consistently increased across almost all European countries. At the same time, according to the latest Eurobarometer (October 2025), more than 60% of Europeans identify a purely economic issue as their main national concern: 31% point to inflation and the cost of living, 19% to the overall economic situation, and 12% to government debt. Moreover, in recent years, access to housing has also risen rapidly as a key concern, reaching 13% of respondents and becoming the main worry in Ireland, Luxembourg, the Netherlands and Spain.
This contrast between steadily increasing consumption and persistent economic dissatisfaction reflects a deeper problem. We are facing an outdated system in which people are pushed towards ever-growing consumption, while the quality of life is not improving at the same rate, and even minimum living standards are not guaranteed for everyone. We find ourselves on a treadmill of consumption and production that fails to satisfy human needs, while simultaneously destroying the planet that has provided us with everything.
Experts have long warned that economic growth is not a panacea. We now know that while progress has been made in some areas, others urgently require deep reforms. Change should not be feared. On the contrary, it is high time to revisit the social contract, to rethink which elements need to be introduced or strengthened, and to implement the necessary measures to ensure it is better fulfilled.
Gender inequalities, climate change, overconsumption, the productive model, labour precarity, access to housing, quality education and trust in institutions are just some of the challenges Europe will have to confront in the coming years of the 21st century. The seeds for a better future must be sowed now.
Explore the publication here and download the report here.
