Building on social psychology, cultural sociology and historical institutionalism, it is possible to develop fairly specific expectations of how identities shape parties' policy-making. These experiences can be formulated as empirical questions, which can be analysed with the help of the quantitative and qualitative data collected on the political parties in question. Which ideas of the role and capacity of the state and the functioning of the labour market dominate a party's discourse? Who or what constitutes 'the alternative' to a given policy and ideational identity?
Answering the above questions in the case of the Labour Party and the SPD, it is possible to draw conclusions from the similarities and parallels that can be discovered between both parties. Both encountered disorientation and ideological crises after the increasing failure of Keynesian policy prescriptions. They eventually moved and embraced neo-liberal LMP approaches - although at a different speed and intensity - nevertheless eventually heading in a similar direction. Here, the different approaches of the Labour Party and the SPD growing from the increasing failure of their national blends of Keynesian-led policy approaches can be explained by the historical differences in the institutions (federalism, Clause IV, etc.), as well as the differences found in the domestic context of both countries' political systems (Thatcherism, electoral systems and party competition).
Furthermore, after the collapse of the political systems in Eastern Europe, the increasing level of Western European economic integration, and the emergence of an increasingly internationalized economy, both parties moved in a similar policy direction and embraced a delayed shift (compared to most of their party political competitors) in their institutionalized economic policy paradigm, from Keynesian to neo-liberal economic policy approaches.
This is not to say that the parties signed up wholeheartedly to the economic and social policies of their conservative political rivals. Instead, a rhetoric of social justice was developed under new economic conditions that meant that, in the 1997/8 general election programmes that brought them back into office, both parties combined distinctive aspects of traditional social democratic policy