Pierson - New Politics Welfare State

Trustees of Princeton University
The New Politics of the Welfare State

Author(s): Paul Pierson
Source: World Politics, Vol. 48, No. 2 (Jan., 1996), pp. 143-179
Published by: Cambridge University Press
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THE NEW POLITICS OF THE

STATE
WELFARE
ByPAULPIERSON*
state
crisis of the welfare
much-discussed
old. The
is now
two decades
of social
tremendous
pro
twentieth-century
expansion
societies.
In
feature of advanced
industrial
grams has been a remarkable
state is a core institution,
all these countries
the welfare
for
accounting
THE
between
nomic
one-fifth
boom
faced mounting
since given way
growth
mental
and
eco
the postwar
social
have
1970s, however,
programs
of
have long
Questions
expansion
challenges.
political
to an
to welfare
state
of
limits
the
acknowledgment
and one-third
ended
of GNP. Ever
since
in the early
the prospect
for extended
we
still know
austerity.
this funda
Despite
little about the poli
stunningly
change, however,
to our vast
In contrast
of
tics of social policy retrenchment.
knowledge
state
most well-tilled
of welfare
the
the dynamics
expansion?arguably
re
state retrenchment
subfield of comparative
public policy?welfare
mains
informed discussion
has
terrain.1 Theoretically
largely uncharted
been
limited
to very abstract
commentaries
or the rather reflexive,
often
implicit application of propositions derived from the study of social

policy expansion.
state of affairs results in part from the very success of
This puzzling
The
of historical
research on the welfare
earlier scholarship.
quality
a
state has
of
borrowing
already developed
encouraged
simple process
Iwould
for the examination
of a new environment.
models
argue, how
a
are
reasons to
reject such
compelling
straightforward
new
state is instead
the
that
the
of
welfare
quite
extrapolation,
politics
state
from the old. Welfare
involved
the enactment
different
expansion
in a relatively
environ
of
interest-group
undeveloped
popular policies
ment.
state retrenchment
welfare
contrast,
requires elected
generally
By
ever, that there
I am grateful to the Russell

for considerable
Glatzer
Miguel
1
state expansion,
On welfare
for financial and administrative

support and to
Sage Foundation
research assistance, as well as helpful comments.
see G?sta
The Three Worlds ofWelfare Capitalism
Esping-Andersen,
and John D.
Princeton
Press, 1990); and Evelyne Huber, Charles Ragin,
(Princeton:
University
Christian Democracy,
Constitutional
Structure, and theWelfare
State,"
Stephens, "Social Democracy,
American Journal of Sociology 99 (November
1993).
WorldPolitics 48 (January1996), 143-79

144
WORLD
POLITICS
to pursue
unpopular policies
voters and well-entrenched
officials
of both
that must
withstand
networks
of
interest
the scrutiny
It is
groups.
not
that variables
crucial to understanding
the for
surprising
mer process are of limited use for
one.
the
latter
analyzing
state
This
for an analysis of welfare
essay seeks to lay the foundations
on
I emphasize
the critical constraints
reform resulting
retrenchment.
therefore
from
the role of supportive

state
of the welfare
growth
As a result,
other
durable
the welfare
key components
than existing
interest groups
itself transforms
voters.2 The
and, ultimately,
the politics of social policy.
to be far more
resilient
than
state has
proved
of national
political
of the welfare
theories
economies
state would
and far more

lead one to ex
is presented
in four stages. Section
I highlights
the
pect. The argument
characteristic
of retrenchment
II discusses
in
Section
qualities
politics.
more detail the
state
theories
of
welfare
and
sug
expansion
principal
a
of retrenchment
the distinctiveness
makes
gests why
straightforward
to the contemporary
state
of these arguments
welfare
application
prob
in four
III explores
the dynamics
of retrenchment
lematic.
Section
cases: Great
Britain,
the United
States, Germany,
and Sweden.
Section
IV builds on this theoretical and empirical analysis to offer some basic

propositions
I.Why
about
retrenchment
the Politics
politics.
of Retrenchment
IsDifferent
is a distinctive
retrenchment
essay s central claim is that because
same rules of
to
that op
it
is
follow
the
process,
unlikely
development
are two
state
There
erated during the long phase of welfare
expansion.
reasons
for this. First, the political goals of policymakers
fundamental
are different;
in the political
second, there have been dramatic
changes
This
context. Each
of these points requires elaboration.

a
to
is profound
difference
between
benefits
There
extending
large
of people and taking benefits
For
the
half
numbers
century,
past
away.3
was
a process
of political
social benefits
credit
generally
expanding
concern about tax
to overcome
diffuse
Reformers
needed
only
claiming.
resort to social insurance
rates (often
"contribu
sidestepped
through
of entrenched
interests.
tions") and the frequently
pressures
important
had
the
social
until
of
Not
programs
recently
expansion
surprisingly,
2
In this sense, my analysis parallels Verdier s recent effort to interpret
outcome of a process influenced by voters." Daniel Verdier, Democracy and
France and the United States, 1860-1990
(Princeton: Princeton University
3
R. Kent Weaver,
"The Politics of Blame Avoidance," Journal of Public
ber 1986).
as "the
foreign trade policy
International Trade: Britain,
Press, 1994), xv.
Policy

6 (October-Decem
POLITICS
OF THE WELFARE
STATE
145
been a favored political activity, contributing greatly to both state

building projects and the popularity of reform-minded politicians.4
A
costs
rising
ing calls
shifts to the right, and

changes, political
states has
welfare
grow
maturing
provoked
to turn these de
At
the heart of efforts
of economic
combination
with
associated
for retrenchment.
into policy have been newly ascendant

conservative
advocated major
have generally
Conservative
governments
mands
often
icy reforms,
from
receiving
the business
significant
external
Yet
especially
community.5
to the
stands in sharp contrast
credit-claiming
state
of
the
welfare
expansion.
ing
long period
ment
is typically
because
treacherous,
return
voters
in
of
concentrated
groups
a delicate
effort
Retrenchment
entails
matic
change
to minimize
into an electorally
costs
the political
politicians.
social pol
in their effort,
support
the new
policy
agenda
pursued dur
The politics of retrench
it imposes
losses on
tangible
for diffuse and uncertain
gains.
either
attractive
involved.
initiatives
to transform
program
or, at the least,
of retrenchment
proposition
Advocates
must
that the price of reform is manage

supporters
persuade wavering
almost
able?a
task that a substantial
impossible.
public outcry makes
an exercise in blame avoidance
rather than
Retrenchment
is generally
are con
costs of retrenchment
because
the
credit claiming,
primarily
are not. That

con
while
the benefits
(and often immediate),
than diffuse
interests will be in a stronger political
centrated
position
ones is a standard
in political
As interests become
science.6
proposition
more concentrated,
their
the prospect
that individuals will find itworth
centrated
to engage
in collective
action
Furthermore,
improves.
to be linked to
interests are more
organizational
likely
their
about how policies
that keep
them
affect
informed
action.
These
networks
also facilitate political
informational
while
trated
An
voters
reason
additional
cutbacks
concerns
react
that politicians
the well-documented
to losses
and gains.
Extensive
rarely get
concen
networks
interests.
credit
asymmetry
experiments
for program
in the way
that
in social psy
in Europe and
and Arnold
eds., The Development
J. Heidenheimer,
ofWelfare States
(New Brunswick, N.J.: Transaction,
1982).
to treat business as always and everywhere
recent research has suggested,
itwould be wrong
to welfare
state
of the United
For
studies
States, see, for example,
programs.
illuminating
opposed
Colin Gordon, New Deals: Business, Labor, and Politics inAmerica, 1920-1935
(Cambridge: Cambridge
Sources of Firm Preference
for
"Nature or Nurture?
Press, 1994); and Cathie Jo Martin,
University
89 (December
it is
National Health Reform," American Political Science Review
1995). Nonetheless,
in all the advanced industrial democracies
have favored?often
clear that most business organizations
in the welfare state over the past fifteen years.
vehemently?cutbacks
6
Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge:
Political Organizations
Harvard University
(New York: Basic Books,
Press, 1965); James Q? Wilson,
1973), 330-37.
Peter Flora
America
5
As

WORLD POLITICS
146
chology have demonstrated that individuals respond differently to pos

itive and negative risks. Individuals exhibit a negativity bias: they will
take more
and accepting
the possibility
of
conflict
chances?seeking
current
of
losses?to
their
any worsening
greater
prevent
posi
at least in the United
tion.7 Studies
of electoral behavior,
States, con
are more
firm these findings.
attitudes
toward candidates
Negative
a
turnout, desert
(for example,
range of behaviors
strongly linked with
even
ing the
While
than are positive

attitudes.8
party choice)
bias are unclear, the constraints
for this negativity
on elected officials
are not. When
added to the imbal
voters
normal
the reasons
it imposes
ance between
concentrated
that
cates
and diffuse
for advo
interests, the message
is straightforward.
A simple
"redistributive"
to taxpayers,
of resources from program beneficiaries
engineered
a
cuts in social programs,
is generally
The
losing proposition.
of retrenchment
transfer
through
concentrated
to be
of the
groups are more
cognizant
beneficiary
likely
are
are easier to mobilize,
and
because
losses
change,
they
experiencing
to
vot
rather than gains are more
in
the
their
change
incorporate
likely
a clash be
Retrenchment
advocates
thus confront
ing calculations.
tween
their policy preferences

and their electoral
ambitions.
to cutbacks
creates new
If the shift in goals from expansion
political
a
so does the emergence
new
context
of
the development
of
dynamics,
a
are
now
state itself.
the welfare
social
central
programs
Large public
part of the political landscape.As Peter Flora has noted, "Including the
of [pensions,]
benefits
and social assistance?
recipients
unemployment
in education,
health and the social services?
and the persons employed
in many
countries
of
receive transfer or
almost
1/2
the
electorate
today
work
income
from
the welfare
state."9 With
these massive
programs
networks
and strong popular
attach
interest-group
to re
ments
to
which
considerable
obstacles
present
particular policies,
the
late
1980s
the
American
form. To take one prominent
example, by
have
come
dense
Association of Retired People (AARP)had amembership of twenty

eight million and a staff of thirteen hundred (including a legislative
7
Daniel
Econometrica
Kahneman
47
(March
under Risk,"
of Decision
and Arnos Tversky, "Prospect Theory: An Analysis
1979); idem, "Choices, Values and Frames," American Psychologist 39 (April
1984).
8
to Short-Run Economic Conditions:
Howard
S. Bloom and H. Douglas
Price, "Voter Response
and Recession," American Political Science Review 69 (December
The Asymmetric
Effect of Prosperity
of
1975); Samuel Kernell, "Presidential Popularity and Negative Voting: An Alternative
Explanation
71
of the President's
the Midterm
Decline
Party," American Political Science Review
Congressional
for Negativity
Effects in Political Behavior," Amer
(March 1977); and Richard R. Lau, "Explanations
icanJournal of Political Science 29 (February 1985).
9
State?" Annals of the Institute of Social Sci
Peter Flora, "From Industrial to Postindustrial Welfare
of Tokyo)
ence, special issue (Institute of Social Science, University
(1989), 154.

OF THE WELFARE
POLITICS
staff of more
than one hundred).10 The

transforms
the nature
maturation
of the welfare
state
In
politics.
social
groups
programs
surrounding
powerful
on the
so
state less
political
parties,
dependent
that expanded
cial movements,
social programs
and labor organizations
in the first
is the context
Nor
altered
because
welfare
simply
place.
fundamentally
short, the emergence
the welfare
may make
states create
may
also
change
their own
of
147
STATE
interest-group
of
The
constituencies.
have
implications
(for example, whether
for
structures
the decision
national
of social programs
rules
officials
need
governing
policy
the acquiescence
of local ones) and for how visible cutbacks will be. "Policy feedback"
from
earlier
rounds
of welfare
state
development
is likely to be a promi
nent
feature of retrenchment
politics.11
creates
In short, the shift in goals and context
new
to
avoid
blame
marked
by pressures
politics,
new
cies, dictates
political
strategies.12 Retrenchment
one group
to
play off
forms that compensate
cutbacks will
favoring
a new
politics. This
for unpopular
poli
advocates will try
re
and develop
against another
for
lost
benefits.
crucial
Those
groups
politically
to lower the
of reforms, either
attempt
visibility
of beneficiaries
by making the effects of policies more difficult to detect or by making

it hard for voters to trace responsibility
for these effects back to partic
will
seek broad
Wherever
ular policymakers.13
possible,
policymakers
consensus
on reform in order to
these ef
spread the blame. Whether
forts succeed may depend very much on the structure of policies
already
of the
in place. As I argue in the next section,
theoretical
discussions
to heart.
state have failed to take this
welfare
point sufficiently
II.The Limits of Existing

Each
of the main
economic
theories
of welfare
Theories
state
about
expansion?arguments
the power of the left, and ar
for discus
loosely appropriated
about
arguments
development,
been
about institutions?has
guments
state. In this section I make
sions of the contemporary
welfare
explicit
the kinds of claims that an inversion of existing
theories of expansion
While
each perspective
suggest for a theory of retrenchment.
might
10
L. Day, What Older Americans Think: Interest Groups and Aging Policy (Princeton:
Christine
Princeton University
Press, 1990), 25-26.
11
Politics against Markets: The Social Democratic Road to Power (Princeton:
G?sta Esping- Andersen,
Princeton University
Press, 1985); Paul Pierson, "When Effect Becomes Cause: Policy Feedback and
Political Change," World Politics 45 (July 1993).
12
theWelfare State? Reagan, Thatcher and the Politics ofRe
Weaver
(fn. 3); Paul Pierson, Dismantling
trenchment (Cambridge: Cambridge University
Press, 1994), chap. 1.
13
R. Douglas Arnold, The Logic of Congressional Action (New Haven: Yale University
Press, 1990).

WORLD
148
POLITICS
contains
contention
insights, my main
must move
retrenchment
these
beyond
analysis
of
"Logic of Industrialism'?
A New
earliest well-developed
particularly with the work
The
of welfare
state
is that a convincing
formulations.
state
effort
economies
expansion
correlated
was
produce
state
associated
growth,
theory of welfare
the
of Harold Wilensky,
stressed
relationship
to processes
of economic
growth.14 Welfare
with
strong welfare
that "strong
affluence,
suggesting
ex
states." Yet while
this argument
plained broad social policy differences between rich and poor nations, it
proved to be far less helpful in explaining differences within the club of
rich democracies.
versions
of economic
determinism
have been promi
Nonetheless,
state. The claim that a
nent in discussions
of the contemporary
welfare
so
a convergence
new
of national
encourages
"logic of industrialism"
of global economic
is based on asserted consequences
cial policy models
re
is that the globalization
of capital markets
change.15 One possibility
moves
tools from national
and
crucial economic
governments
policy
as Garrett
and Lange
have
constrains
social policy options. However,
and fiscal policies may face new
argued, while monetary
persuasively
that supply-side
there is little evidence
restrictions,
policies of transfers
so
as tax bases remain sufficient
be constrained,
long
con
deficits.16
social
low
Some
policies may in fact
relatively
to economic
the formation
for example, by encouraging
growth,
and services
need
to insure
tribute
of human capital and certain kinds of labormarket flexibility.

A
related
sult
in what
argument
economic
is that heightened
call "social dumping."
The
re
integration will
term refers to the
Europeans
are low may be
"social wages"
that firms operating
where
possibility
firms ei
able to undercut
the prices of competitors,
forcing higher-cost
or to relocate to low social wage
ther to go out of business,
areas, or to
sce
costs.
extreme
to
In
their governments
reduce social wage
pressure
narios
these
actions
could
fuel
a downward
very rudimentary,
eventually
producing
evidence
national welfare
states.17 The
spiral in social provision,

lowest-common-denominator
for a process
of social
dumping
14
of California Press, 1975).
The Welfare State and Equality
(Berkeley: University
Wilensky,
15
One could fill a small library with books and articles that make this claim. For a good recent ex
in Australia, Den
see Herman
Schwartz, "Small States in Big Trouble: State Reorganization
ample,
and Sweden in the 1980s," World Politics 46 (July 1994).
mark, New Zealand,
16
to Interdependence: What's
Left for the
and Peter Lange, "Political Responses
Geoff Garrett
45 (1991).
Left," International Organization
17
seeWilliam
L. Cary, "Federalism and Corporate Law:
For a classic treatment of this dynamic,
on Delaware," Yale Law Journal'83
Reflections
(March 1974).

POLITICS
remains
limited. The
and firms will
sions,
OF THE WELFARE
149
STATE
is only one factor in investment

social wage
not invest in countries with
low social wages
deci
unless
other factors (for example, infrastructure, worker productivity) justify

such
investments.18
Neoclassical
trade
theory
that countries
suggests
so
as overall con
long
should not face problems

high social wages
ditions allow profitable
investment.19
to the economic
A further, critical objection
determinist
argument
a
if high social wage were associated
has received
less attention.
Even
with poor economic
the assumption
that downward
ad
performance,
with
in social policy would

is unjustified.
As
follow
justments
necessarily
countries
North
has recently reminded
have
maintained
dif
us,
widely
for
of time,
ferent levels of economic
very
long periods
performance
aworld where
In
without
marked
toward
par
pressures
convergence.20
ticular
have
matic
arrangements
have been
that
strategies
adopted
or necessary movement
ciency?market
dictated
or
institutionalized
succeed
in local
and where
terms,
toward
any particular
otherwise.
Politicians
there
local actors
is no auto
definition
of effi
in democratic
about getting
elected. Help
generally worry first and foremost
the economy may make
that easier, but not if it requires
ing improve
are
not if the economic
to
and
benefits
hugely unpopular
policies,
likely
some
at
in
future.
the
distant
(that is, postelection)
appear
point
even if social
Thus,
arguments
dumping
proved valid?a
big if?
systems
much would still depend on the balance of political forces favoring and
a substantial
to
state. Tendencies
of the welfare
restructuring
resisting
sources of wel
the
considerable
ward fragility must be weighed
against
18
inAlberta Sbragia, ed.,
Peter Lange, "The Politics of the Social Dimension,"
(Wash
Euro-politics
that sys
1992). For evidence casting doubt on the proposition
Institution,
ington, D.C.: Brookings
see Rebecca M.
tems of social protection have significant negative effects on economic performance,
Is There a Trade-off?
of
Blank, ed., Social Protection versus Economic Flexibility:
(Chicago: University
Press, 1994).
Chicago
19
a
as
"Unraveling" could occur in more subtle way,
heightened
strengthens the bar
capital mobility
gaining position of business, leading to the gradual erosion of "tightly coupled" systems of industrial
see
states. For a good example of this kind of argument,
relations and, perhaps, welfare
Wolfgang
on the Political Economy
to
Reflections
of European
Streeck, "From Market-Making
State-Building?
Social Policy," in Stephan Leibfried
and Paul Pierson, eds., European Social Policy: Between Fragmenta
tion and Integration (Washington, D.C.: Brookings
such a scenario cannot be
Institution,
1995). While
ruled out, the evidence for it remains quite limited. These arguments appear to be more popular among
and
those, like Streeck, who focus on industrial relations systems. See, for example, Jonas Pontusson
and Wage
Institutions:
Peter Swenson,
"Labor Markets,
Production
The
Strategies,
Bargaining
Swedish Employer Offensive
in Comparative
Perspective,"
Comparative Political Studies (forthcom
"West European Labor inTransition:
Sweden and Germany Compared,"
ing); and Kathleen Thelen,
World Politics 46 (October 1993). Industrial relations systems, however, seem more fragile than welfare
state structures. Welfare
states, I will suggest, have considerably broader bases of support, which pro
mote the restoration of equilibrium
and inhibit the kind of unraveling
that occurs in some industrial
relations systems.
20
C. North,
Institutions,
Douglass
Press, 1990).
Cambridge University
Institutional
Change,
and Economic
Performance

(Cambridge:
WORLD POLITICS
150
fare state
stability. In short, policy

new
economic
trends. The
from
outcomes
of
logic
cannot
be derived
industrialism
directly
suffers from
claims of economic
de
many of the defects of the old one. Expansive
to the
terminism
attention
of
The
pay insufficient
policy change.
politics
same cannot be said about
resource
and institutionalist
power
argu
to which
I now turn.
ments,
Left
The
and the Politics
Power Resources
resources
power
perspective,
which
of Retrenchment
attributes
cross-national
varia
tions in social provision largely to differences in the distribution of po

resources
litical
has been
the leading
in
classes,
among
approach
to
state
of
welfare
patterns
comparative
explaining
politics
expansion.21
over social
occurs because
Class-based
social pro
struggle
provision
of workers
and employers. Many
grams affect the bargaining
position
earners and
social programs
limit the economic
of wage
vulnerability
increase
worker
strong
unions
grams.
The
accounting
and
power resources
for cross-national
approach
variations
three decades following World War

of crude
among
in social provision
patterns
explanatory
power.22
A straightforward
would
during
the
II. Furthermore, the replacement
data with more fine-grained

expenditure
of social provision
has greatly
improved
social
trenchment
to power
resource
theorists,
to the
of these pro
growth
success in
has had considerable
solidarity.
According
left parties
contribute
distinctions
the model's
resource
to re
of power
arguments
application
states are in
suggest that welfare
deep trouble. The
labor and left parties has shrunk
in
considerably
power of organized
societies. As Iwill argue in Section
industrial
many advanced
III, how
there
is
little
evidence
that this decline
has had a funda
ever,
very
on welfare
states. Cutbacks
mental
in social programs
have
impact
been far more moderate
than the sharp drop in labor
in
many
strength
countries
lead one to expect, and there appears to be little corre
might
lation
declines
between
in left power
resources
and
the magnitude
of
retrenchment.
The
shift
contemporary
context
in both
tics of the welfare
state
welfare
and goals that characterizes

the new poli
so.
to
this is
of the
helps
explain why
Analysis
state's supporters must
include not only orga
21
John D. Stephens, The Transition from Capitalism to Socialism (London: Macmillan,
1979); Walter
The Democratic Class Struggle (London: Routledge,
1983); Esping-Andersen
(fn. 11);Walter
in the Development
of Social Citizenship:
Social Rights
"Power, Politics, and State Autonomy
OECD Countries
in Eighteen
since 1930," American
54 (June
during Sickness
Sociological Review
1989).
22
(fn. 1); Huber, Ragin, and Stephens
(fn. 1).
Esping-Andersen
Korpi,
Korpi,

POLITICS OF THE WELFARE STATE
151
left parties but also the more varied constituencies

of
individual programs.
Interest groups linked to particular
social policies
are now
actors. The
rise of these interest groups
is
prominent
political
nized
labor and
one
of the clearest
choices
political
of how
examples
can influence
feedback
policy
contemporary
political
from
struggles.
previous
Groups
of program beneficiaries did not build the welfare state, but the wel
fare state contributed
the
time
most
to the
of these groups. By
development
to emerge
in the mid-1970s,
began
were
to extensive
connected
of
networks
mightily
of austerity
politics
state programs
Most
support.
prominent
welfare
were the
of the various ben
recipients
consumers.
care
the
health
The providers of
disabled,
efits?pensioners,
services
stake in sustaining
and
also had a major
expenditure
public
were
was a range of
well
there
organized.23
usually
Finally,
public
social
on
to protect
to mobilize
those too weak
organizations
seeking
own.
even
are
not
when
their
Indeed,
groups of recipients
particularly
to their
well
may have reason to be attentive
organized,
politicians
interest
concerns.
are
to incense voters, and
if recognized,
Cutbacks,
likely
polit
The possibil
stand ready to exploit such opportunities.
ical competitors
means
at the
that the
ity of exacting
punishment
polls
potentially
even in the absence of
mobilized'influence
orga
policymakers
ongoing
nized
activity.24
reasons
to believe
of left
that the centrality
there are good
Thus,
to welfare
state outcomes
union
has
confederation
and
party
strength
re
resource arguments
relevance
of power
The diminished
declined.
states are now mature
and that retrenchment

state
In a context
is not simply the mirror
expansion.
image of welfare
is just emerging,
of very
where
the existence
social provision
public
cru
an
broad organizations
expansionist
policy agenda may be
pushing
emer
and the
of program
cutbacks
the unpopularity
cial. However,
new
of
will
of
bases
pause even where
gence
support
give politicians
flects
the fact that welfare
unions
programs
are weak.
left parties
Equally
new bases of
organized
develop
This
from the labor movement.
and
autonomy
have consequences
for
of
weakening
organized
commensurate
weakening
social
maturing
important,
have
substantial
that
support
shifting base of support may

but the
the dynamics
of policy development,
into a
labor need not translate
automatically
of the welfare
state.
23
In this respect, organized labor (public employee unions) continues to be of significance, although
not in the way posited by power resource theorists. Union
interests are now linked primarily to the em
of gen
effects of specific public programs rather than to the broad consequences
ployment-generating
erous
provision for the bargaining position of workers.
public
24
On this point, see Arnold
(fn. 13).

152
New
WORLD
POLITICS
and Welfare
Institutionalism
State Politics
matter. The
in
of governance
"new institutionalist"
resurgence
a renewed
science
reflects
of
how
stable,
relatively
political
appreciation
structure
routinized
in
arrangements
political behavior.25 The political
Patterns
stitutions
of different
countries
vary along crucial

the rules of electoral
the relationship
competition,
and executive,
the role of the courts, and the place
ernments
in politics.
Institutions
establish
the rules
such as
dimensions,
between
legislature
of subnational
gov
of the game
for po
and
preferences,
litical struggles?influencing
identities,
group
policy
coalitional
and
the bargaining
of some
choices,
power
enhancing
while
that
of
others.
Institutions
also
affect
groups
govern
devaluing
resources for fash
ment
administrative
and
financial
capacities?their
ioning
interventions.
policy
In the field of comparative social policy, the claim that political

must
institutions
be considered
consequential
structures
has been
de
veloped primarily in the work of Theda Skocpol and her collabora

tors.26 These
dynamics
the power
researchers
have
raised
resources
about the
questions
for
that
out,
pointing
example,
success
in
little
for
accounting
significant
state
of welfare
development,
has had
approach
pre-World War
research agenda,
II social policy developments.

The new institutionalist
on
has
centered
"American
however,
excep
explaining
tionalism"?the
belated and halfhearted development of socialwelfare
in the United
States. Just as a focus on Sweden was central to
policies
resources model,
on the
of the power
concentration
the development
United
States has underscored
the importance
institutions.
of political
make
Institutionalists
ment.
with
two broad
claims
about welfare
state
develop
to
states,
strong welfare
likely
produce
ca
terms of
in
administrative
defined
strength
governmental
and institutional
cohesion.
Extensive
administrative
and finan
First,
state
pacities
cial resources
are
strong
states
make
it easier
to build
expansive
social policies.27 Where
political authority is fragmented, entrenched minorities will often block

social
legislation.28
Federalism,
separation
of powers,
strong bicameral
25
Peter Hall,
the Economy (Oxford: Oxford University

and
Press, 1986); James March
Governing
(New York: Free Press, 1989); North
(fn. 20).
Johan Olsen, Rediscovering Institutions
26
and Theda Skocpol, eds., The Politics of So
See, for example, Margaret Weir, Ann Shola Orloff,
cial Policy in the United States (Princeton: Princeton University
Press, 1988); and Theda Skocpol, Pro
The Political Origins of Social Policy in the United States (Cambridge:
tecting Soldiers and Mothers:
Harvard University
Press, 1992).
27
Hugh Heclo, Modern Social Politics inBritain and Sweden (New Haven: Yale University Press, 1974).
28
Keith G. Banting, The Welfare State and Canadian Federalism, 2d ed. (Montreal: McGill-Queens
in Western
Press, 1987); Ellen Immergut, Health Politics: Interests and Institutions
University
Europe
(Cambridge:
Cambridge
University
Press,
1992).

POLITICS
ism or reliance
on referenda
OF THE WELFARE
all may
STATE
153
state
restrict welfare
development.
Although much of thework on institutions andwelfare states has been

on
case studies, this claim

historical
comparative
veto
stitutional
received
support
points has recently
as well.29
quantitative
study
based
The
second
central
institutional
argument
of previously
consequences
about policy feedback
programs. Arguments
about the consequences
of big government.
or feedback?the
about
concerns
introduced
are
As
formal
in
in an important
policy
legacies,
state
welfare
arguments
essentially
decisions
have
policy
and social life, their im

effects on economic
pervasive
increasingly
on
state is
has expanded. Given
that the welfare
pact
political processes
at the very heart of
it should come as no surprise that
big government,
some of the most
state
studies of welfare
have
development
generated
had
about policy feedback.

arguments
persuasive
structures
of preexisting
for wel
The possible
consequences
policy
are
state structures affect the
diverse.30
Welfare
fare state politics
quite
size and orientation
of various societal groups as well as patterns of in
the basis for processes
formation.
may provide
terest-group
Programs
of social
learning
whether
that affect
or
prospects
Policies
positively.
negatively
as the pay-as-you-go
ments?such
to
systems?that
public pension
velopment.31
How
easily
for future
can create
intergenerational
lock in particular
program
long-term
contracts
paths
expansion,
commit
common
of policy
de
can these
be applied to the distinctive

arguments
politics
no
reason to assume
is
of retrenchment?
there
that claims for
Again,
can
on their heads. For
earlier periods
there
example,
simply be turned
will
be
is little reason to expect that bureaucratic
capacities
particularly
in an age of retrenchment.
it? may be an
Can we administer
important
of new or greatly expanded
in a discussion
important
public
question
of retrenchment
but for advocates
the primary goal is to dis
initiatives,
mantle
services, and cut
offices, curtailing
existing programs.
Closing
not
do
formidable
administrative
capacity.
ting benefits
require
of governmental
cohesion
also
about the consequences
Arguments
in this new context.32 At first glance, one might
need to be reappraised
29
(fn. 1).
Huber, Ragin, and Stephens
30
Pierson (fn. 11).
31
For examples of each of these arguments, see, respectively, Esping-Andersen
(fn. 11); Skocpol (fn.
"
and Political Change: Contrasting
26); and Paul Pierson,
Reagan and Thatcher's
'Policy Feedbacks'
6 (Fall 1992).
Pension-Reform
Initiatives," Studies inAmerican Political Development
32
in Pensions Pol
This paragraph relies on Paul Pierson and R. Kent Weaver,
"Imposing Losses
Government Capabilities at
and Bert Rockman,
eds., Do Institutions Matter?
icy," in R. Kent Weaver
Home andAbroad
Institution,
1993).
(Washington, D.C.: Brookings

154
WORLD
POLITICS
veto
be in a
fewer institutional
systems with
points would
an
to
of
retrenchment.
Because
radical
pursue
stronger position
agenda
is generally
there are
retrenchment
however,
unpopular,
compelling
reasons to
this expectation. While
cohesive
systems concen
question
trate
concentrate
ten
The
former
they also
accountability.
authority,
it.
facilitates
but
the
latter
Where
retrenchment,
dency
impedes
is
the
knows
that
the
of the
centralized,
government
authority
public
that
expect
can
cutbacks.
prevent groups from suffering
Strong governments,
cost of retrenchment,
the
may forgo the op
high political
anticipating
concentrated
the theoretical
basis
power. Thus,
portunities
provided by
is
that government
cohesion
facilitates
retrenchment
for believing
day
are left with
weak. We
of whether
concentration
the empirical
question
of accountability
concentration
effects.33
states
of modern welfare
that insti
suggests
of power effects outweighs

tremendous
The
scope
about policy feedback may be even more

relevant
arguments
two
of retrenchment.
There
different
are, however,
quite
politics
to retrenchment.
to
feedback
First, one
arguments
policy
apply
tutionalist
to the
ways
could
nuanced
develop
acteristics
of individual
retrenchment.
overarching
arguments
the distinctive
that emphasize
char
their implications
for successful
and
programs
one could present
arguments
Alternatively,
structures
state
of particular welfare
regimes,
about
the
suggesting
that they are likely to promote a particular kind of politics.
to carry out in prac

resources.
of
policies help shape
political
influence
the
networks,
Preexisting
policy designs may
interest-group
extent of
rules
the
commitments,
governing
programmatic
long-term
to reduce the
of cut
of techniques
reform, and the availability
visibility
case
have been used in qualitative
backs. These
kinds of arguments
The
first
approach
has promise
tice. Previous
studies
but
is difficult
the distribution
of both welfare
state
to
they often apply
idiosyncratic
to use them
is
it
hard
however,
across countries.
variations
and
expansion
characteristics
to generate
retrenchment.34
of individual
general
Because
programs,
about
propositions
about how welfare

arguments
more
to
is
contemporary
regimes
politics
easily applied
has
cross-national
proposi
comparisons.
Esping-Andersen
developed
to cross-national
state structures
variation
in oc
tions that link welfare
The
state
alternative
of developing
broad
affect
33
seems more likely is that the structure of formal institutions will influence the
What
strategies o?
retrenchment
advocates. I return to this point in the conclusion.
34
see Pierson (fn. 12).
On expansion, see Heclo
(fn. 27); and Skocpol (fn. 26). On retrenchment,

in turn, to contemporary
political
cleavages.35
states like
for example,
that social democratic
welfare
sector
Sweden will face growing
clashes between
and private
public
a
states
like
will
conservative
while
welfare
workers,
Germany
produce
divide between
labor market
"insiders"
and "outsiders."
Such an ap
cupational
He
suggests,
structures
155
and,
proach offers the tantalizing promise of linking the evident significance

state
to clear
about political
propositions
not
the
does
work.
As
I will docu
argument
change. Unfortunately,
ment
in the next section,
the hypothesized
emerge
political
cleavages
a sustained
in only muted
forms and have failed to generate
backlash
state. The flaw in these broad arguments
about wel
against the welfare
of large welfare
structures
is that they greatly underestimate

fare state regimes
and sustaining
coalitions.
sembling
proretrenchment
New
have
institutionalist
contributed
arguments
of welfare
derstanding
the role of organized
tance of institutional
choices
from
has declined.
one
state
the difficulty
greatly
of as
to our un
unlike
about
arguments
politics. Moreover,
no
reason
to
is
think
that the impor
labor, there
structures
and the legacies
of previous
policy
cannot
These
arguments
simply be transferred
context
the specific
trenchment
to another, however;
must be recast to
to
they
apply
are
re
that
characteristic
of
settings and strategic problems
politics.
of Expansion
From Theories
to Theories
of Retrenchment
state expan
It is commonly
maintained
that our knowledge
of welfare
us with
new
into
sion provides
of the
considerable
the
insight
politics
state.
it
this
view
is
stated
undoubt
welfare
rarely
Although
explicitly,
are
who
with
scientists,
edly explains why political
usually preoccupied
understanding
contemporary
or rather
recent
events,
have
become
so
interested in historical studies of social policy. The presumed similarity

in some of the most
is evident
of expansion
and retrenchment
impor
tant work on
social
In
their
quantita
comparative
sophisticated
policy.
tive investigation
of welfare
state effort from 1956 to 1988, for
that their use of a

and Stephens
acknowledge
Ragin,
example, Huber,
assumes
time-series
model
"that causal processes
pooled cross-sectional
are uniform
time."
claims
risks of
that"[t]he
through
Esping-Andersen
35
"Postindustrial Cleavage Structures: A Com
(fn. 1); G?sta Esping-Andersen,
Esping-Andersen
in Germany,
States," in
Sweden, and the United
parison of Evolving Patterns of Social Stratification
Societies (Oxford: Polity Press, 1991); and idem,
Francis Fox Piven, ed., Labor Parties in Postindustrial
andWelfare
between Labour Movements
"The Emerging Realignment
States," inMarino Regini, ed.,
The Future of Labour Movements
(London: Sage, 1992).

WORLD
156
welfare-state
. . .
states.
backlash
class
[T]he
were
depend
coalitions
POLITICS
...
on
the class
in which
the
of welfare
character
three welfare-state
not
but
founded,
regime-types
only their past evolution
explain
also their future prospects." More
maintains
he
that
"a
generally,
theory
that seeks to explain welfare-state
should also be able to under
growth
stand
or decline."36
its retrenchment
I see no reason
to believe
is true. Retrenchment
that this
is not
sim
state
should we assume
ply the mirror
image of welfare
expansion. Why
a
to
outcomes
context and
in
that theories designed
explain
particular
involving the pursuit of particular goals will still apply once the politi
cal environment
The
the goals of key actors have undergone

radical
state
of
whether
theories
of
welfare
question
expansion
into the retrenchment
is still open, but this pre
process
and
change?
offer insights
liminary discussion
are
re
that major modifications
suggests
probably
on
In
the
I
draw
evidence
from
Great
section,
Britain,
quired.
following
to demonstrate
the distinc
the United
and Sweden
States, Germany,
are some
tiveness
of retrenchment
importance
politics. Of declining
critical factors,
such as the role of organized
labor. Others,
formerly
are
of political
such as the design
of
institutions,
continuing
signifi
cance but in new ways. Yet a crucial
mature wel
is
factor
the
emerging
fare state
its broad
itself, and
III. Retrenchment
and deep
reservoirs
Politics
of public
support.
in Four Countries
states
have welfare
retrenchment?
What
undergone
to retrenchment
and programs
ini
have been most vulnerable
tiatives and why? In this section I address these questions
by reviewing
states in four affluent
the evolution
of welfare
since the
democracies
To what
extent
countries
late 1970s. The
evidence
a number
of claims.
is lit
(1) There
states
the
of
strong
centrality
propositions
or left power resources
to retrenchment
outcomes.
(2) The unpopular
makes major
cutbacks unlikely
except under con
ity of retrenchment
even
is unlikely
and
radical
ditions
of budgetary
crisis,
restructuring
same
then. (3) For the
seek to negotiate
reason, governments
generally
consensus
to
rather
than
reforms
which
impose
unilaterally,
packages
tle evidence
further diminishes
a
supports
about
for broad
the potential for radical reform. And
creating
self-reinforcing
state.
for the welfare
dynamic,
cutbacks
tend
to
(4) far from
replenish
support
36
(fn. 1), 33,32. Of course, Esping-An
Huber, Ragin, and Stephens (fn. 1), 733; Esping-Andersen
dersen has also emphasized
that the growth of the welfare state affects welfare state politics.

OF THE WELFARE
POLITICS
157
STATE
is a difficult
task. Quantitative
retrenchment
indicators
Measuring
reasons.
are
to be
for several
lev
First, pure spending
likely
inadequate
or
els are rarely the most politically
interesting
important
theoretically
states. As
put it in his analysis of
aspects of welfare
Esping-Andersen
to
"It is difficult
imagine that anyone struggled
expansion,
for spending per se."37 In particular,
may sustain
rising unemployment
even as social
are
cur
and
benefits
significantly
high spending
rights
re
to capture the
of
estimates
will
fail
tailed. Second,
impact
spending
state
welfare
or
to introduce
retrenchment
that are designed
only indirectly
over the
must focus on
term.
and quantitative
Analysis
long
qualitative
on
as well as
in
and
programs
long-term
changes,
changes
prospective,
on immediate
on
a combi
therefore
relies
cutbacks. My
investigation
nation of quantitative
and qualitative
data on expenditures
analysis of
forms
state reforms.38
welfare
se, the focus

state. These
would
means-tested
than
Rather
is on reforms
include
benefits;
emphasizing
indicate
structural
that
(1)
(2) major
cuts
shifts
in spending
per
in the welfare
on
in reliance
increases
significant
to the
transfers of responsibility
pri
vate sector; and (3) dramatic changes in benefit and eligibility rules that
a
selection
of
reform of a particular
program.39 The
signal
qualitative
was based on the desire to achieve
to
countries
investigate
significant
on what
state
variation
the welfare
literature suggests are the
expansion
cases vary
most
in the
The
variables.
widely
independent
plausible
structure of
the extent of shifts in the distribution
institutions,
political
the design
of preexisting
welfare
resources,
states, and the
crisis.
of
severity
budgetary
measures
with
the quantitative
evidence,
pro
aggregate
Beginning
states have
that any of the four welfare
vide little evidence
undergone
of power
dramatic
across
cutbacks.
the four
From
cases
are
1974
quite
1990 the expenditure

through
different
similar, despite widely
patterns
starting
37
(fn. 1), 21.
38Esping-Andersen
statistical analy
A recent draft paper by Stephens, Huber, and Ray presents the first sophisticated
sis of retrenchment,
utilizing newly assembled data that allow investigation of fairly detailed program
over a
are
limitations: much of the
matic
large number of countries. There
important
changes
data end in 1986 or 1987; many programs are not covered; and the still-small sample al
programmatic
about
lows the statistical testing of only a few broad hypotheses
(essentially, the impact of partisanship)
the politics of program change. The results reported strongly support most of the analysis presented
as more successful than I do. John D. Stephens, Evelyne Huber,
here, although they view Thatcher
at the conference on the "Pol
State inHard Times"
and Leonard Ray, "TheWelfare
(Paper presented
itics and Political
Economy
of Contemporary
Capitalism,"
University
of North
Carolina,
Chapel Hill,
1994).
September
39
"radical" reform is no easy task. For instance, it is impossible to say
Establishing what constitutes
cutbacks amounts to a qualitative shift in the nature of pro
definitively when a series of quantitative
a program can no longer
grams. Roughly
though, that point is reached when because of policy reform
a rough continuation
to
of the re
provide
play its traditional role (e.g., when pension benefits designed
tiree's earlier standard of living are clearly unable to do so).

WORLD POLITICS
158
1 and 2 show, social security spending

and total gov
points. As Tables
as a percentage
over most
ernment
GDP are
of
flat
of
outlays
relatively
ex
recent surge in Swedish
the relevant period. The
is
the
exception
penditures, which will be discussed below. There

trend
which
overall, with fluctuations

tracks public employment,
is a slight upward
to the business
related
cycle. Table
a similar
pattern
reveals
(although
3,
the
expansion of Swedish public employment from an already high base

out). For none of the countries
curtailment
of the public sector.
Table 4 offers more disaggregated
stands
does
the evidence
indicators
of shifts
reveal a sharp
in social wel
TableI
Social
Security
Transfers
as % of gdp
(1974-90)
Britain
1974
1980
1982
1984
1986
1988
1990
SOURCE: OECD, Historical
a1989.
United States
Sweden
Germany
9.8
14.6
14.3
9.5
11.7
16.6
17.6
10.9
14.0
17.7
18.3
11.9
14.0
16.5
17.6
11.0
14.1
15.9
18.4
11.0
12.3
16.1
19.5
10.6
12.2
15.3
19.7
10.8a
Statistics,
1960-1990
(1992),
Table
Government
Outlays
table 6.3.
2
as % of Nominal
gdp
(1978-94)
Britain
1978
1980
1982
1984
1986
1988
1990
1992
1994a
SOURCE: OECD, Economic
a
Projection.
Sweden
Germany
United
41.4
47.3
58.6
30.0
43.0
47.9
60.1
31.8
44.6
48.9
64.8
33.9
45.2
47.4
62.0
32.6
42.5
46.4
61.6
33.7
38.0
46.3
58.1
32.5
39.9
45.1
59.1
33.3
43.2
49.0
67.3
35.1
44.8
51.4
70.9
33.9
Outlook
(December
1993),
table A23.

States
OF THE WELFARE
POLITICS
STATE
Table
3
as % of Total
Government
159
Employment
Employment
_(1974-90)_
Britain
Sweden
Germany
1974
19.6
21.1
1980
1982
22.0
1984
22.0
1986
21.8
1988
20.8
United
States
16.1
24.8
30.3
15.4
31.7
15.4
32.6
14.8
32.2
14.8
14.4
31.5
13.0
14.6
15.1
15.5
15.6
15.6
1990_19I2_151_317_14.4a
SOURCE: OECD, Historical
a1989.
1960-1990
Statistics,
(1992),
table 2.13
are
fare spending
among the four countries;
spending patterns
reported
for what
the OECD terms "merit goods"
education,
(primarily housing,
and health care) as well as for various income transfers. The figures sug
a bit more
the United
States and
among the cases, with
gest
divergence
as somewhat more
in curbing
successful
spending.
Germany
emerging
British
and German
A very few program
pen
housing
areas?notably
similarities
reductions.
Nonetheless,
significant
sions?experienced
across
cases
remain
more
of the
than differences.
None
striking
in overall effort, and there are few in
rises or declines
countries
show major
of dramatic
dications
change
in any of the subcategories
of expenditure.
The data suggest a surprisingly high level of continuity and stabil

ity.40These
changes
within
must
figures
in the spending
these
be treated with
for particular
broad
since major
however,
could
be
programs
occurring
reforms
could have
imposed
caution,
Policy
categories.
not show up in
do
that
spending figures. Furthermore,
lagged
not
of
other
features
levels, are of signif
many
programs,
just spending
sense of the
to get a better
issues
and
icance. To
these
investigate
we
to a more
turn
these
that
outcomes,
processes
aggregate
generated
cases.
of the four
detailed
investigation
cutbacks
Great
Britain
By themid-1970s
mix
of fairly modest
40
This
broad conclusion
Britain had developed amidsize welfare statewith a

income
is echoed
transfer
for amuch
programs
larger number
and relatively
of cases in Stephens,
(fn. 38).

extensive
Huber,
and Ray
Government
Outlays
Table 4
by Function
as
{ >
OF TREND
(1979-90)
Britain
Public
goodsb
Merit
goods
Education
Healthc
1979
1990
44.9
Total
43.2
1979-90
1979
1990
49.9
45.8
1979-90
1979
1990
61.4
-4.1
63.2
+0.1
10.0
9.2
-0.8
10.5
8.8
12.2
-1.4
12.3
10.9
-1.4
15.9
13.4
5.5
5.0
-0.5
5.2
4.2
-1.0
6.6
5.6
4.8
5.1
+0.3
6.3
6.0
-0.3
8.1
6.9
2.1
-1.2
9.5
9.7
13.6
-1.7
and
Housing
3.4 other
Income
Sweden
Germany
Trans.
12.5
13.4
+0.9
0.8
0.7
-0.1
20.2
18.5
-1.7
24.6
1.2
26.8
0.8
Pensions
6.7
6.5
-0.2
12.7
11.2
-1.5
11.0
11.5
Sickness
0.4
0.3
-0.1
0.8
0.7
-0.1
3.4
4.5
allow.
1.7
1.6
-0.0
1.2
0.8
-0.4
1.6
1.3
Unemployment
income
Other
0.7
0.6
-0.1
0.9
1.3
+0.4
0.4
0.5
supports
Admin,
and
0.1
0.8
+0.7
1.3
1.6
+0.3
0.1
0.2
Family
other
Add.
spend.
transfer
1.4
1.6
+0.3
2.6
2.4
-0.2
4.9
5.2
1.4
1.8
+0.5
0.5
0.4
-0.1
3.2
3.7
Source: OECD, Economic Outlook (December

1993), table 21.
a
Numbers may not sum to total due to rounding.
b
Defense
and other public services.
c
For the U.S., social security related to health spending is included
under "additional

transfers" below.
politics
of
the
welfare
161
state
in health care and

policies
housing. The past fifteen
a
test of a number
of
of
Conservative
rule
years
represent
powerful
are few if any cases within
There
claims about retrenchment.
the OECD
and interventionist
of such
a radical
sources. A
balanced
as reflected
mony,
re
of power
to Conservative
hege
in the distribution
gave way
electoral
two-party
system
in four consecutive
labor movement
strong
to the
right
swing
suffered
repeated
in
industrial
and
employment
changes
in 1979
from over 55 percent
declined
victories.41
A fairly
in the face of high un
relations
law; union density
defeats
to 35 percent
in 1993.42 Fur
concentrates
thermore,
system
political
political
If a strong state with few internal veto points is the key to re
authority.
were
the contemporary
welfare
state, the British Conservatives
forming
In short, a
in an unusually
inversion
of
wel
favorable position.
simple
Britain's Westminster
fare state expansion

been fertile ground
arguments
for social
would
suggest
cutbacks.
that Britain
should
have
The
evidence
does not
policy
a conclusion.43 While
instances of sig
there are individual
support such
are
in
and
nificant retrenchment,
pensions
notably
housing
policy, these
if
than
the
rule.
The
British
welfare
the exception
rather
state,
battered,
4 indicates,
remains
intact. As Table
social expenditure
(merit goods
as a share of GDP remains almost
after more
unchanged
plus transfers)
than a decade of Conservative
governance.
It is worth
cause
these
are instructive.
experiences
Thatcher
The
the two cases of retrenchment
starting with
government
sale of roughly
was
One
success, be
of the triumphs
of the
of public council housing.
the privatization
to tenants
homes
1.5 million
for a major expansion

of home ownership
in the public
remained
dies for those who
case of retrenchment?in
a
uniquely
popular
laid the foundation
in subsi
and sharp cutbacks
reform was
sector.44 Housing
the excep
many
respects,
sector as
of extensive
that proves the rule. The
liquidation
public
sets created a rare
rather than blame
for credit claiming
opportunity
home
for
both
considerable
and
benefits
avoidance,
purchasers
offering
sector
other
circumstances
would
Public
who
under
tenants,
taxpayers.
tion
have
fought
the government,
became
disinterested
or divided.
41
Geoff Garrett, "The Politics of Structural Reform: Swedish Social Democracy
in Comparative
Perspective," Comparative Political Studies 25 (January 1993).
42
The 1979 figure is from Robert Price and George
Sayers Bain, "Union Growth
spect and Prospect," British Journal
Derek Bird and Louise Corcoran,
Gazette (June 1994), 193.
43
Pierson (fn. 12), chaps. 3-6.
44
Ray Forrest and Alan Murie,
don: Routledge,
and Thatcherism
in Britain: Retro
Relations 21 (March 1983), 47. The 1993 figure is from

of Industrial
and Density,
"Trade Union Membership
1992-93," Employment
Selling
the Welfare State: The Privatization
ofPublic Housing
1988).

(Lon
162
WORLD
The
A
but
government
less generous
considerable
POLITICS
reforms were
also relatively
successful.45
pension
indexation
rule for the basic pension
produced
gradual
also introduced
savings. The government
budgetary
significant cutbacks in the State Earnings-Related
Pension Scheme
(SERPS), while
alternative. The
introducing
private personal
pension
a very limited
SERPS with
initial
abolish
government's
proposal?to
even from usual
with
phase-in
period?met
overwhelming
opposition,
supporters like the Confederation of British Industry (CBl).Forced into

an
introduced more modest

but
retreat, the government
embarrassing
in
nonetheless
substantial
which
will
SERPS,
changes
gradually
expand
sector benefits. These
private pensions while
reducing public
changes,
though criticized, failed to generate the kind of outcry that often led
to back
the government
off from
other
reforms.
the carrot
Offering
of
personal pensions diminished the pain of the cuts in public pensions

(although the required tax incentives also diminished the government's
budgetary
cremental
savings). More
and seemingly
opposition.
Careful
political
planning
use of
the government's
important,
technical
reforms
limited
the emergence
in the context
of programs
that were
in
of
either
weakly institutionalized (SERPS)or offered rare opportunities for credit

claiming (council housing) protected theThatcher government. These
cases were
tives found
exceptions,
the welfare
however.
port for social spending

social policy
regarding
modest
decline
the British Conserva

On the whole,
as
state to be a
sup
political minefield,
popular
In
remained
British
fact,
strong.
public opinion
a
reveals
the same pattern
found
elsewhere:
of support
for the welfare
state
preceded
at the first hint
the arrival of
but rebounded
of serious re
government
run
in
Public
Britain
has
and increas
opinion
strongly,
or even
in
favor
of
social
maintaining
ingly,
expanding
provision.46
was
to much
Thus while
the government
of the wel
clearly hostile
the Thatcher
trenchment.
fare
state
changes
and
had
if it chose
the political
authority
to do so, the fear of
being
to
held
dramatic
implement
accountable
for un
popular initiatives held it in check. Preserving theNational Health Ser

vice, for example,
the 1980s.
Initial
became
far and away the Labour Party's best issue in

of various options
for privatization
pro
exploration
voked public outrage. The Thatcher government repeatedly backed off

45
Alan Walker,
and Jill Quadagno,
and the New Politics of Old Age," in John Myles
"Thatcherism
and the Future of Old Age Policy (Philadelphia: Temple University
eds., States, Labor Markets,
Press,
1991); Pierson (fn. 31).
46
Peter Taylor-Gooby,
State: Public Attitudes,
"The Future of the British Welfare
and
Citizenship
Social Policy under the Conservative
Governments
of the 1980s," European Sociological Review 4 (May
1988).


from
for fundamental
plans
the decade
safe with
While
backs
of the system.47 By the end of

restructuring
s
"the NHS is
repeated promise had become
the government
us."
the government
in various programs,
some
achieved
radical
nontrivial
retrenchment
cut
incremental
efforts
failed,
often
at
ru
cost. The universal Child Benefit,
political
frequently
at a somewhat
in jeopardy,
survived
reduced
(although
considerable
to be
mored
163
to
in part
efforts. A massive
and
well-organized
lobbying
a
to offer
social security review promising
"new Bev
highly publicized
to
for low
ended
modest
up making
programs
eridge"
adjustments
as an instance
income
of
Sickness
touted
successful
Pay,
groups.48
due
level),
a
sector benefit.49
remains
Fur
thinly disguised
privatization,
public
to
foster
caused
retrenchment
Thatcher's
thermore,
attempts
arguably
to
ultimate
downfall. The
tremendously
unpopular
poll tax?designed
the
social
local
their
finan
of
governments
cripple
spending
by cutting
a
source of the downward
out from under them?was
major
legs
in
Her
the
that
forced
Thatcher's
successor,
resignation.
spiral
polls
a
course.
more
to
While
followed
moderate
John Major,
attempting
consolidate
least unpopular
Thatchers
reforms, he launched few initia
cial
tives
of his
own
and
retreated
on
unpopular
issues
like cutbacks
in
Child Benefit.
Parts
ment
of the Conservative
is not
impossible.
of reform?or
quences
benefits?the
state
welfare
would
have
areas,
a government
yet, turn reform
Where
better
or failed
adjustments
social
expenditure
the government
impose.
This
remains
paid
outcome
government's
remarkably
such as its overhaul of Britain's
privatization
that major
retrench
can obscure
the conse
into a source of tangible
state may be vulnerable.

Had
the entire British
resembled
council
the Conservative
housing,
agenda
s record reveals more
cases
succeeded. Yet the government
aside,
pensions
it was able to
Thatcher
demonstrate
welfare
of incremental
Overall
record
of publicly
owned
to restructure
programs.
attempts
and
almost unchanged;
housing
a
price for the cutbacks
significant
stands
successful
industrial
in sharp
efforts
contrast
to the
in other
policy
and its
relations
system
industries.
47
Rudolf Klein, The Politics of theNational Health Service, 2d ed. (London: Longman,
1989); Edwin
in Britain," Political Quarterly 62 (October-December
"The Politics of Health Care Reform
Griggs,
1991).
48
Nicholas Deakin, The Politics ofWelfare (London: Methuen,
1987).
49
Nicholas
Barr and Fiona Coulter, "Social Security: Solution or Problem?" in John Hills, ed., The
State ofWelfare: The Welfare State in Britain since 1974 (Oxford: Oxford University
Press, 1990), 281;
in Sheila B. Kamer
Michael
"Social Welfare
and Privatization: The British Experience,"
O'Higgins,
man and Alfred J. Kahn, eds., Privatization
and the Welfare State (Princeton: Princeton University
Press,
1989).

WORLD POLITICS
164
The United
Many
have
States
seen the United
of the welfare
mantling
enced a significant
as another
States
state. Like
rightward
shift
Britain,
in power
captured the presidency
Republicans
for a dis
likely candidate
the United
States experi
resources
during the 1980s.
in 1980 (aswell as the Senate
to
1986).
power?never
begin with?con
a
state was
inexorable
decline.
The
American
welfare
seemingly
some
to
in
modest
observers
that pub
scope, suggesting
already fairly
it would
lic support for maintaining
be weak. Unlike Thatcher,
how
until
that extensive
Union
tinued
ever, retrenchment
advocates
in the United
States
operated
in a context
of severely fragmented political authority. The combination of weak

of powers,
and federalism
created an institutional
parties,
separation
environment
in many
that was
the polar opposite
of that in
respects
Britain.
Yet at least through 1994 the American
story reads like the British
successes.
of Thatchers
first year
one, minus most
sporadic
Reagans
was
wave
to elect
antitax
the exception.
the
that
had
Riding
helped
was
a
to
of
coalition
southern
able
cobble
loose
him, Reagan
together
in his first year to pass some cuts in social
Democrats
and Republicans
those affecting
the poor. A decade-long
programs,
expansion
especially
of low-income
were
programs was
housing
in the main program
Insurance.
The Reagan
introduced
cuts
rapidly reversed. Significant
for the poor, AFDC, and in Un
ex
administration
successfully
employment
the fact that responsibility
for these two programs was shared
ploited
state governments.
Both
in the
with
fared poorly
fiscally
strapped
at
state
the
level.50
1980s, although many of the cutbacks occurred
rev
This first-year
record has shaped many appraisals of the Reagan
olution.51
ment
further
As
dissipated
budget
in other
countries,
however,
support for retrench
popular
out in 1982, when
assault
The
Reagan
petered
rapidly.
cuts were
overwhelmingly
rejected.
Reagan's
single
the New
Federalism
would
have
initiative,
proposal,
reform
major
transferred
responsibility
turn for the federal
for AFDC and food
governments
assumption
re
stamps to the states (in
over
of complete
control
50
In the case of AFDC, which
is not indexed, this happened
failed
largely because state governments
to index benefits to inflation. Given
this structural feature of the program, "nondecisions" allowed quiet
retrenchment. This trend predated Reagans
arrival in office. Indeed, cuts in real benefits were greater
Carter s presidency
(when inflation was high) than under Reagan.
during
51
"Social Insurance, Distributive
See, for example, two frequently cited studies: Sara A. Rosenberry,
Criteria and theWelfare
Backlash: A Comparative Analysis," British Journal ofPolitical Science 12 (Oc
tober 1982); and John Palmer and Isabel Sawhill, eds., The Reagan Experiment
D.C.:
(Washington,
Urban Institute Press, 1982).

POLITICS
Medicaid).
find even
The
a
proposal
OF THE WELFARE
was
so
unpopular,
STATE
165
that
however,
and died without
it could
not
ever
sponsor
congressional
being
second term incremental
of vari
By Reagans
expansions
ous social programs
for the poor were back on the agenda,
and Con
modest
increases
in
food
and
Medicaid
and a
gress passed
stamps
tax
dramatic
of
the
income
earned
credit
for
poor working
expansion
families.53
single
introduced.52
Middle-class
culties
forced
also weathered
programs
reforms
significant
to trim Medicare
of Social
s
the storm. Trust

Security,
costs
fund
and there was
diffi
a se
cuts
exploding
(mostly through
In all these efforts, however,
provider
compensation).
Republicans
fearful of the electoral
of retrenchment
refused to move
consequences
ries of efforts
in
agreement. The need for consensus

to program defenders
be acceptable
was most
within
the Democratic
Party. This
clearly evident in the 1983
on a
Social Security
where
the
reliance
amendments,
bipartisan,
quasi
commission
assured
that
radical
reforms
would
be rejected.54
corporatist
It was also true, however,
of the series of broad budget packages
that
cutbacks
in
the
Medicare
sought
system.55
forward
in the absence
in turn assured
of bipartisan
that reforms would
nature of the wel

it is generally
Although
argued that the residual
fare state in the United
States creates a narrow political
base, the initial
was
state
backlash
the welfare
short-lived.
against
support
Declining
for
From
social programs
election.
1982 onward?
preceded Reagans
re
that is, immediately
the
first
of
round
following
budget cuts?polls
true
vealed growing
for the welfare
state.56 As
is
elsewhere,
support
was
than
for
for
means-tested
far
lower
that
middle
programs
support
class programs,
but the same public
opinion
pattern
of modest
declines
in support followed by rapid recovery is evident for both targeted and

universal
thusiasm
programs. Reagan
for retrenchment
became
faded.
much
more
In any event,
as
en
popular
nature
the fragmented
hesitant
52
to
Tim Conlan, New Federalism:
(Washington,
Reagan
Intergovernmental
Reform from Nixon
D.C.: Brookings
Institution,
1988), 95-238.
53
Paul E. Peterson, "The Rise and Fall of Special Interest Politics," Political Science Quarterly 105
to
"Universal and Targeted Approaches
(Winter 1990-91); Robert Greenstein,
Relieving Poverty," in
In
Jencks and Paul Peterson, eds., The Urban Underclass (Washington, D.C.: Brookings
Christopher
stitution, 1991).
54
Paul Light, Artful Work: The Politics of Social Security Reform (New York: Random House,
1985).
55
and Aaron Wildavsky,
The Deficit and the Public Interest (Berkeley: University
of
Joseph White
California Press, 1989).
56
Fay Lomax Cook and Edith J. Barret, Support for theAmerican Welfare State (New York: Columbia
and theWelfare
State:
University Press, 1992); Robert Y. Shapiro and John T. Young, "Public Opinion
The United
States in Comparative
Perspective," Political Science Quarterly 104 (Spring 1989). In line
with my general argument, Shapiro and Youngs
research indicates similar patterns in other countries.

WORLD POLITICS
166
of American
backs met
institutions
political
a hostile
in
reception
assured
that plans
for further
cut
Congress.
both the emergence
of a large structural
sure, with
budget
to tax increases,
deficit during the 1980s and resistance
little room was
state moved
left for social policy expansion. The American
welfare
into
a zero-sum
some
came
ex
at
in
which
for
often
the
era,
programs
gains
re
the Democrats
continued
when
pense of others. This
atmosphere
To
be
turned to theWhite
House
in 1992, although social spending for the
of the 1993
poor was a prime beneficiary
late 1980s through
1994 the situation was
essentially
stagnant
agreement.
budget
one of reallocation
From
the
within
an
budget.57
The 1994 elections, which ended forty years of Democratic predom

the most vigorous
yet to the
precipitated
challenge
state.
American
welfare
had learned
lessons
Republicans
important
from past defeats. Social Security was taken off the table. The
issue was
as a matter
the deficit and
of controlling
carefully framed
bringing gov
ernment
at institutional
"closer to the people." Efforts
(the line
change
item veto and balanced-budget
amendment)
preceded
(though with
most
limited success) attacks on social programs. To diminish
visibility,
in Congress,
inance
of the major cuts were scheduled for the year 2000 and beyond. If fully
implemented, the Republican budget proposals introduced in 1995
a fundamental
reform of American
social policy.
It
represent
outcome
be
several
before
the
of
is
this
latest
battle
will, however,
years
are
now
clear. Republican
cutbacks
it
and
will
only
being formulated,
take some time for their impact to register with
the electorate. While
a
test
the current political
environment
of the resilience
of
poses
major
the welfare
both
American
and
the
else
state,
experience
precedent
cast doubt on the
a
where
that Republicans
will discover
proposition
cuts in social programs.
deep reservoir of public tolerance for sharp
would
Germany
Germany,
German
like Sweden,
has a very extensive welfare
the
state, though
is
toward
transfer
than
rather
system
payments
geared
public
over the life
across
and toward redistribution
cycle rather than
services,
income groups. As
considerable
swing
ity. A
right-of-center
there has been a

States,
to the
auster
right in elections
during the period of
coalition
has been in office since 1982. In recent
in Britain
and
the United
57
on Pro
On recent spending trends, see House Ways
and Means Committee,
Background Material
on
D.C.: GPO, March
the Jurisdiction
grams within
of the Committee
Ways and Means
(Washington,
1994).


the Social Democrats,
with
however,
have
considerable
influence.
desrat,
gained
unions
have been under pressure,
powerful
their majority
years,
other
countries
Thus, Germany
resources and
167
in the Bun
And
although Germany's
unions
in
compared with
their organizational
strength has held up quite well.58
a
case
of
left power
diminished
represents
moderately
fragmented
political
authority.
state is based, not on
maximizing
employment,
are
to the "outsiders," who
to
but on providing
subsidies
encouraged
to those who are
leave the labor market
highly productive.
Esping-An
dersen has speculated
that the result is likely to be an "insider-outsider"
The
German
relatively
welfare
conflict inwhich
the employed (along with employers) increasingly
a
of subsidizing
large and growing
"surplus popula
tion."59 Indeed, within
the recent wave of commentary
about the con
to
tribution
of high wages
and extensive
social protection
Europe's
costs
economic
huge wage
steeply ris
problems, Germany's
(including
balk
at the cost
to the
attention.60
taxes) have received particular
ing payroll
Adding
as the West
stress has been the cost of unification,
German
welfare
to cover the far less
state was extended
East Germany.
productive
The
fiscal
pressures
go away. Demographic
to unification
begin
pressures
will
facing Germany
shifts will increase
to subside. There
translate
into a sharp
are evident
costs
even
is, however,
insider/outsider
to
and are unlikely
if expenses
related
sign that these
line
conflict. This
little
of potential cleavage is based largely on age,with by far the largest and

most
group of outsiders
consisting
expensive
are formidable
sioners and early retirees. There
ment
of former
insiders:
pen
to the
develop
costs
lines.61 Where
barriers
of political
along generational
cleavages
are the main
source of
insid
with
pressure,
aging
budgetary
ers will have to
too
in
will
be
outsiders.
that
the future they
recognize
is likely to temper any tendency
between
toward a polarization
This
"them" and "us."62
associated
a
new
the reform
political
cleavage,
revealing
sharp
in the late 1980s fits the general
cross-national
pattern
Far from
sions
of pen
for re
58Thelen(fn.l9).
59
and 1992).
(fn. 35,1991
60Esping-Andersen
were 26.5% of gross income in
Combined
employer and employee social insurance contributions
1970, 32.4% in 1980, and are forecast to hit 39.2% in 1994. Financial Times, July 2,1993,
p. 13.
61
and Barbara Boyle
"Generational Politics," in John L. Palmer, Timothy
Smeeding,
Hugh Heclo,
eds., The Vulnerable (Washington, D.C.: Urban Institute Press, 1988).
Torrey,
62
of private pension schemes
(fn. 35,1992)
rightly suggests that the development
Esping-Andersen
to sever the link between
such a polarization,
since itwould allow current workers
could encourage
institutional
their own retirement situation and that of the preceding generation. Yet the enormous
a
and political barriers to any radical change in a mature, pay-as-you-go
major
pension system make
along these lines highly unlikely. See Pierson (fn. 31).
development

WORLD POLITICS
168
trenchment
in popular
social programs.63 With

projections
indicating
as a result of
the
trends,
long-term
demographic
some critics
for pension
reform was widely
While
recognized.
enormous
need
deficits
a
the Kohl government
in
of the entire scheme,
pressed for
rethinking
stead searched for consensus
and
the
social
and
among experts
partners,
from
the
Social
Democrats.
Union
support
eagerly sought
opposition
on
re
statements
submitted
representatives
pension
joint
the
the
Greens
Pension
Reform
Act
parties except
supported
in November
familiar
1989.64 The
resulting
plan incorporated
an
increase in the
rates,
slightly lower replacement
techniques:
and business
form. All
passed
pruning
retirement
contributions.
Combined
with
earlier
age, and increased
reforms
have
substantial
these
cutbacks,
savings.
generated
budgetary
The basic structure of Germany's
generous
system remained
pension
In the case of health care reform as well, corporatist
however.
unaltered,
of entrenched
interests
and a search for cross-party
accommodation
consensus
has been the rule.65
cast to retrenchment
conservative
The one indication
of a distinctly
to 1989 came in the pattern of benefit
cuts. Most
initiatives
af
prior
fected were welfare
and unemployment
a
to labor market
considered
hindrance
were
relatively
well
protected
under
insurance
benefits
that could be
these benefits
flexibility. While
the SPD-led coalition
of the late
after 1982.66 Still,

reductions
1970s, they experienced
disproportionate
were
the basic reality that
limited and did not overturn
the differences
a
within
framework.
social welfare
relatively consensual
policy operated
a
cutbacks were
has argued, moderate
As Offe
by
carefully designed
a
to prevent
orchestrated
coalition"
and
political
"defacto bipartisan
outcry.67
The
strains of the postunification
more
dramatic
with
concern
period raised the possibility of
reform. Germany's
worsening
about industrial competitiveness,
fiscal
situation,
generated
combined
growing
crit
63
in the United
and Demographic
Karl Hinrichs,
"Public Pensions
Equity
Change: Generational
no. 16/93 (Bremen: Univer
States and Germany," Centre for Social Policy Research Working
Paper
im vereinten
der Rentenversicherung
1993); Winifried
Schm?hl, "Die Finanzierung
sity of Bremen,
no. 1 (1992).
Deutschland,"
Wirtschaftsdienst,
64
in Berhard
in der Bundesrepublik,"
Friedbert R?b and Frank Nullmeier,
"Altersiccherungspolitik
und Wandel (Opladen: West
Blanke and Hellmut Wollmann,
eds., Die alte Bundesrepublik' Kontinuit?t
deutscher Verlag, 1991).
65
in
der Gesundheitsreform
"Krankheit, Geld und Politik: Zur Geschichte
Douglass Webber,
16 (1988).
Leviathan
Deutschland,"
66
in R. Morris,
State inTransition,"
ed., Testing the Limits
Jens Alber, "The West German Welfare
in
Brandeis University
Press, 1988); Claus Offe, "Smooth Consolidation
of Social Welfare (Hanover:
State: Structural Change, Fiscal Policies, and Populist Politics," in Piven
theWest German Welfare
(fn. 35).
67
Offe
(fn. 66),
140.

POLITICS
icism
state. Yet
of the welfare
continuity:
OF THE WELFARE
East Germans
the response
were
brought
169
STATE
to unification
into theWest
emphasized
German
social
on
terms. In response
to
generous
extremely
budgetary
so
a
cuts
in major
series
of
have
been
introduced
then,
are
on
more
cuts
the way.68 Again,
how
cial programs,
and
probably
levels rather than challenge
ever, the pattern has been to trim benefit
policy
regime
since
pressures
the basic
The
structure
recent
of programs.
ambitious
expansion
of long-term
care
in-home
covering
is clear grounds
services
for skepticism
about the
and nursing-home
or a
backlash
for radical retrenchment
prospects
against
generational
the German
will
relieve
the
sickness
funds
welfare
state.69 The
system
care
for long-term
of responsibility
amounts
to fiscal
relief for
While
partly
expenditures.
new
it
L?nder
bene
involves
(state) governments,
significant
strapped
a
as
stress
at
time
of
and
wide
fits
well.
Its introduction
budgetary
and
local
spread
social
discussion
assistance
budgets
the scheme
costs indicates
the continuing
of high
social wage
as well as the electoral
of social programs,
clout
attractiveness
political
of the elderly.70
There
is a possibility
that groups more easily defined as problem
disaffected
such as the long-term
youth,
unemployed
(especially
or East Germans)
the
become
could
targets for political
immigrants,
rates and labor mar
attacks. Concern
about mounting
unemployment
cases,
ket inflexibilities point in the same direction. The Kohl government s

do indeed concentrate
expenditures
will pro
benefits.
unemployment
Sharp cuts, however,
a
SPD
since the conditions
from the
and unions,
voke
strong challenge
for
workers.
Further
of the
have significant
implications
unemployed
even
is
that
these
the
force
of
demands
such
more,
demographic
polit
recent
proposals
on
for cuts
in social
and welfare
ically difficult
long-term
suggests
reforms would
have only a limited effect on the
recent
of retrenchment
situation.71 The
history
budgetary
are
to be skittish about
that most governments
pursuing
likely
68
in den Monaten
Dezember
1993 und ein
"Die Sozialpolitik
November,
J?rgen Plaschke,
no. 2 (1994).
auf das Jahr 1993," Nachrichtendienst,
R?ckblick
sozialpolitischer
69
over
to an
in Germany"
Care Insurance
(Contribution
Jens Alber, "The Debate
Long-Term
OECD seminar on the Care of the Elderly, Paris, OECD, 1994); Ulrike G?tting, Karin Haug, and Karl
in Germany: A Case Study inWelfare
Care Insurance
"The Long Road to Long-Term
Hinrichs,
at theWorld
of Sociology, Bielefeld, July 1994).
State Expansion"
Congress
(Paper presented
70
of German
Industry (bdi), described the original pro
Tyll Necker, president of the Association
not include the reduction of one paid holiday as an offset) as an official declaration of
posal (which did
war against German
industry. Alber (fn. 69), 17.
71
social expenditure, compared with
By 2040 pensions are expected to account for 61% of German
40% in Britain and 44% in Sweden. OECD, Aging Populations: The Social Policy Implications
(Paris:
OECD, 1988).

WORLD POLITICS
170
big social policy battles unless they promise to yield substantial bud
getary
gains.
assure that an
and budgetary
of
pressures
atmosphere
to surround
state. Indeed,
the German
welfare
in holding
has been quite successful
the line
government
Demographic
austerity will
continue
the German
on
as Offe
a
aptly puts it, it has been
period
of
social
fundamental
rethinking
policy
structure of
The
institutions?both
political
spending. Yet,
consolidation.,,
A
mote
tional
possibility.
rules and
consensus.
where
are
The
Kohls
unlikely
much
appetite
a re
constitu
on
premium
1994 elections,
a razor-thin
majority,
corporatist
policy
networks?puts
in the October
SPD's significant
gains
coalition
to
of "smooth
seems
retained only
government
a
coalition
that has never
governing
invigorate
for radical initiatives.
shown
Sweden
combines
Sweden
successful
tremendously
smost
and one of the world
unions,
powerful
states. With
tive welfare
the breakdown
social
democratic
party,
and redistribu
extensive
of centralized
collective
bar
in the past decade, and the political

power
gaining,
SAP
of the
has given way to periodic
fluctuations
between
hegemony
SAP governance
insti
of the bourgeois
Swedish
and coalitions
parties.72
a
for
of
like
British
considerable
concentration
ones, provide
tutions,
union
has weakened
authority.
political
As with Germany,
two
distinguish
other countries
an
periods?the
to 1990
prior
circumstances
and budgetary
tinctiveness
of Swedish
namics
politics
to 1990
prior
in the three preceding
of reform
discussed
there was
showed
analysis
only occasional
much
enthusiasm
of trends
in Swedish
cyclical patterns
and the dramatic
social policy must

shared with
that Sweden
worsening
of economic
over
the dis
the past four years. Despite
and the Swedish welfare
state, the dy
to the processes
bears many
similarities
cases.
of who was in office,

Regardless
no government
of social programs;
trimming
of the Swedish wel
for a major
revamping
fare state.
to
has tried to link the prospects
for retrenchment
Esping-Andersen
from the structure of Sweden's welfare
state, positing
policy feedback
service provision
and high public sec
that Sweden s system of extensive
a
tor
in the
promotes
cleavage between workers
employment
public and
72
A bourgeois coalition government was in power from 1976 to 1982 and, following
to 1994.
showing in decades in the "earthquake" election of 1991, from 1991

the SAP'sworst
POLITICS
OF THE WELFARE
STATE
171
sector unions and

private sectors.73 In the 1980s both private
employers
in part because
criticized
of the way
occurred
This
public employees.
Sweden's
centralized
industrial
relations
system created
linkages be
tween
sector pay, and in part
and
because
of the
private
public
simply
tax costs of massive
sector
high
public
employment
expansion.74
ex
It might
be expected
that the events of the past few years would
this tension.
acerbate
after
The
1990. The
came under
economy
extraordinary
in output
and the rise in unemployment
state itself.75 Yet
little to do with
the welfare
Swedish
fall
pressure
seem to have had
relatively
state did not cause
if the welfare
cated
in Sweden's
those
schemes,
participating
rose from
signed
tolerate
to operate
burdens
social benefits
current
the economic
crisis,
it is clearly
predicament.
Unemployment,
in government-financed
active
in 1989 to over 12 percent
3 percent
impli
including
labor market
in 1993.76 De
at full
state cannot
the Swedish welfare
employment,
of this magnitude.
and
Sweden's
generous
expensive
led to immediate
fiscal trouble when
rising unemploy
revenues
In only four years
and higher outlays.
falling
produced
from having
the largest surplus in the OECD to operating
Sweden went
the largest deficit. Government
level
outlays reached the extraordinary
ment
of 73 percent of GDP in 1993, and the deficit stood at over 14 percent of

the adjustment
levels of taxation,
existing
on the
to fall
side.
heavily
expenditure
of a true fiscal crisis after 1990 required
emergence
GDP.77 Given
bound
The
extensive
was
re
was
1991 and 1994 Sweden

between
Furthermore,
governed
by
one whose
was consider
center of
coalition?and
gravity
bourgeois
forms.
a
burden
ably to the right of the one that governed between 1976 and 1982.
to a
favorable
thus might
have seemed uniquely
complete
is striking
is that even under these ex
overhaul
of social policy. What
state
circumstances
there was no sign that the welfare
traordinary
care
was
to
taken
would
be radically restructured.
considerable
Instead,
ex
structure
of existing
Prominent
the
operate within
programs.78
Conditions
73
"Labor and
(fn. 35, 1992); see also Peter Swenson,
(fn. 1); Esping-Andersen
Esping Andersen
the Limits of theWelfare
State," Comparative Politics 23 (July 1991).
74
and Swenson
Schwartz (fn. 15); Pontusson
(fn. 19).
75
and John Stephens,"The
OECD, Economic Survey: Sweden (Paris: OECD, 1994); Evelyne Huber
at the International
State" (Paper presented
Future of the Social Democratic Welfare
Sociological
Association Meeting,
1993), 7-11.
Oxford,
September
76OECD
(fn. 75), 36.
77
Ibid.
78
and Crisis" (Paper presented
States: Development
John D. Stephens, "The Scandinavian Welfare
at theWorld
of Sociology, Bielefeld, Germany, July 1994).
Congress

WORLD
172
an
include
amples
sickness
benefits,
POLITICS
of waiting
days
of replacement
expansion
a
lowering
for unemployment
and
rates for
unemploy
ment benefits (from 90 percent to 80 percent), a freeze on adjustments

in child
and a raise
allowances,
in the retirement
age, from
to
sixty-five
sixty-six.
Ironically,
nomic model
the breakdown
also diffused
public and private

it easier
has made
of the Swedish
of other
components
some of the pressure
sector workers.
The
on the divide
eco
between
end of centralized
bargaining
to
sector workers
for private
pay settle
decouple
ments
made
the option
from the public sector.79 Higher
unemployment
sector workforce
less attractive
and shifted atten
the public
of cutting
tion
to transfer
where
programs,
the provision
of generous
benefits
has
always depended on keeping the cohort of recipients small. Both the

crisis package accepted by the unions and the SAP in late 1992 and the
toward cuts in transfer pro
1993 budget were geared
government's
insurance,
Thus, while
(sick pay, unemployment
grams
pensions).80
economic
for the welfare
created added pressure
state, they
problems
a more
and
incremental
did so in away that encouraged
pol
dispersed
itics of austerity,
sector workers.
The government
ical restructuring
istering
austerity
drastic measures.
erning
coalition
rather
than a polarization
showed
weakened
public
and private
to use the
for rad
opening
with
the
of
admin
pain
Coping
for
coalition's
enthusiasm
the bourgeois
little
of the welfare
between
inclination
state.
In any event, only the Conservatives

within
the gov
serious
doubts
about
Sweden's
universalist
expressed
welfare state. Polling data from 1992 indicated overwhelming support

since 1986 for the major pro
increases
including
spending,
the principal
rules of blame
followed
coalition
carefully
grams.81 The
crisis
for
of re
It sought SAP and union
avoidance.
support
packages
cover
at
of
the
form, purchasing
opportunities
price
forgoing
political
for radical change.82 A similar approach was taken to pension
reform,
in
the
followed
and
United
States.
the
process
Germany
paralleling
con
in June 1994, based on extensive
reform introduced
The pension
of
labor
and
and
the
sultations
cap
among
representative
major parties
for social
79
and Swenson
Pontusson
(fn. 19).
80
Current
State at the Crossroads,"
"The Swedish Welfare
and John Stephens,
Evelyne Huber
Sweden, no. 394 (January 1993), 1-7; OECD (fn. 75).
81
and the Future of the Universal Wel
"The Crisis of the Swedish Social Democrats
Bo Rothstein,
at
himself argues that weakening
middle-class
fare State," Governance 6 (October 1993). Rothstein
to the SAP s 1991 election defeat, but his article
state may have contributed
tachment to the welfare
no real evidence for this claim and the polling data he presents suggest otherwise.
provides
82
Huber and Stephens
(fn. 80).

OF THE WELFARE
POLITICS
to get Sweden's
ital, seeks
public
pension
STATE
system
173
on a stable,
long-term
footing without challenging its basic principles.83

Far from using its electoral breakthrough and the onset of a bud
to remake the welfare
state, Swe
getary crisis as a golden
opportunity
course.
den's bourgeois
coalition
chose a cautious
the
Throughout,
to the
coalition
initiatives
avoided
that might
lend credence
studiously
accusation
1994
that
elections
it sought
vindicated
to dismantle
the coalitions
state. The
the welfare
October
in away that re
concerns,
on
In
assaults
social programs.
but
the unpopularity
of even modest
economic
the SAP triumphed,
the face of Swedens
difficulties,
posting
one of its
vote totals ever. Moreover,
the victory was achieved
highest
on a
to reduce the deficit
that stressed
the SAP's intention
platform
vealed
largely
through
tax increases
rather
IV.The New Politics
than budget
cuts.
of the Welfare
State
and social pressures have fostered an image

Economic,
political,
fare states under siege. Yet if one turns from abstract discussions
cial
to an examination
transformation
of actual
of wel
of so
it becomes
policy,
the proposition
that these strains have generated
review of four cases does indeed suggest a dis
shifts. This
to sustain
difficult
fundamental
new
but not one

environment,
state. Nor
of the welfare
that has provoked

like a
anything
to attribute
to
is
it
this
dismantling
possible
case selection,
cases of neoconser
since the choice of two prototypical
cases
two
vatism
the
of severe bud
and
United
and
(Britain
States)
room
shocks
for various
and
Sweden)
gave ample
getary
(Germany
an
inThatcher's
scenarios of radical retrenchment.
Even
Britain, where
tinctly
one of Eu
committed
Conservative
Party has controlled
ideologically
over
a
most
for
centralized
reform has
decade,
systems
rope's
political
been incremental
rather than revolutionary,
leaving the British welfare
state
most other countries
In
intact.
is
the
evidence of continuity
largely
even more
apparent.84
83
of Health
and Social Affairs, Pension Reform in Sweden: A Short
(fn. 78), 19. Ministry
Stephens
1994).
Summary (Stockholm: Cabinet Office,
84
Schwartz (fn. 15) argues that there has been major change in the four small states he studies: Swe
of public
and New Zealand. His study focuses on the internal organization
den, Denmark, Australia,
service provision, rather than on the level and quality of services actually provided, and it does not even
on its own
discuss the transfer payments
that account for the majority of welfare-state
spending. Even
narrow terms, however, Schwartz's
study provides remarkably little evidence that the changes he cata
common
in all modern public sec
logs add up to radical reform rather than the continuous
tinkering
a
tors. The evidence looks credible only for New Zealand,
tiny country on the periphery of the world
economy, which clearly faced severe adjustment problems in light of its long (and unusual) tradition of
It seems far more reasonable to treat this case as an outlier than to view it as the paceset
protectionism.
ter in a global march toward radical reform of the welfare state. See
Stephens, Huber, and Ray (fn. 38).

WORLD
174
POLITICS
have experienced
be sure, there has been change. Many
programs
or reductions
in
benefits.
of
rules
On occasion,
eligibility
tightening
To
a
individual programs (such as public housing in Britain) have undergone

more
radical
reform.
In countries
where
pressures have been
budgetary
severe.
the
Over
span of two decades,
greatest,
are
even in the boom
some
in
social
however,
inevitable;
policy
changes
sometimes
social programs
fared poorly.
years of the 1960s
specific
cuts have
been more
is striking is how hard it is to find radical changes in advanced
What
states. Retrenchment
whenever
pursued
cautiously:
consensus
have sought all-party
for significant
governments
structures
rather than experi
and have chosen to trim existing
welfare
possible,
reforms
has been
or pursue
new programs
privatization.
so many
is
have seen the
observers
striking, given that
finding
as one of fundamental
in modern
change
period
political
post-1973
economic
economies.
A harsher
climate
has certainly
de
generated
ment
with
This
restraint. Additional
from
for spending
pressures have stemmed
trends. Yet
and adverse demographic
the maturation
of social programs
of many
reformers
and with
the extent
the aspirations
compared with
mands
in fields such as industrial

of change
or the
of public
privatization
policy,
state.
relative stability of the welfare
I have
suggested
to understand
that
relations
industries,
policy,
what
what
has been
the considerable
quires looking beyond

sources
consider
enduring
forces
that
stabilize
of incremental
welfare
modifications
macroeconomic
stands
out
is the
re
happening
on the welfare
state to
pressures
are
support. There
political
powerful
states and channel
in
the
direction
change
of existing policies. The first major pro
of
stems from the

conservative
char
for social programs
generally
now
state
institutions.
The
welfare
of democratic
political
the status quo, with all the political
that this sta
represents
advantages
state.
tus confers. Nondecisions
the
favor
welfare
Major
generally
pol
tection
acteristics
actors. Where
of numerous
icy change usually requires the acquiescence
institutions
is shared among different
(for example, Germany,
power
the United States), radical reformwill be difficult.

cases
is not easy
change
of concentrated
political power. A second and crucial
comes from the
source of the welfare
states
high elec
strength
political
initiatives. Despite
toral costs generally
retrenchment
associated with
about declining
support for the welfare
popular
scholarly
speculation
As
even
state,
the British
polls
struggles
halting
and Swedish
show,
radical
in a situation
show
over
efforts
little
evidence
a shift, and actual

political
even
even less. On the contrary,
of such
reveal
social spending
to dismantle
the welfare
state have
usually

exacted
high
POLITICS
of
the
welfare
175
state
of social benefits
political
price. Recipients
are
and are generally well organized.
They
are
for cutbacks
than taxpayers
politicians
to support
costs. Nowhere
is there evidence
are
concentrated
relatively
to
also more
likely
punish
to reward them for lower
the scenario
of a self-rein
to middle-class
disenchant
with
cutbacks
leading
forcing
dynamic,
ment
retrenchment.
for more
and exit, laying the foundation
Instead,
a mild
in
the recurrent
pattern
swing
polls has been
public-opinion
state in the wake of poor economic
and
the
welfare
performance
against
stress, followed
budgetary
cuts.
of significant
Nor
does
by
a resurgence
state's political
least in the medium
the welfare
of support
position
seem
at the first whiff

to have
been
se
of its key
the decline
term?by
for
those
benefits
where
labor.
Only
organized
as
are
in
such
unions
the sole organized
constituency,
unemployment
immediate
surance, has labor's declining
power presented
problems,
of social
The growth
and even here the impact can be exaggerated.85
riously eroded?at
traditional
constituency,
state
the terrain of welfare
politics. Maturing
spending has reconfigured
new
the consumers
and
social programs
interests,
organized
produce
to defend
the
that are usually well placed
of
social
services,
providers
state.
welfare
The
networks
tute a barrier
associated
to radical
with
mature
welfare
sense
state programs
consti
as well. As recent re
in another
change
once initiated,
certain
has
demonstrated,
path dependence
are hard to reverse.86
courses of
and
indi
Organizations
development
to
that
commitments
viduals
arrangements,
making
particular
adapt
more efficient
some
to
costs
of
the
render
(even
may
potentially
change
commit
than the costs of continuity.
far higher
alternative)
Existing
a
ments
lock in policymakers.
systems provide
good
pension
Old-age
on
a
basis:
countries
Most
pay-as-you-go
operate
pensions
example.
current workers
the previous
that finance
genera
pay "contributions"
search
on
85
Indeed, a cross-national
programs provides further support for this
comparison of unemployment
rates for UI (benefits as a percentage of previous income)
OECD has measured
replacement
analysis. The
over time in twenty countries, with data through 1991. This data thus permit, for one program, a re
levels. In the majority of
cent quantitative
appraisal of program generosity rather than simply spending
m 1991 than the average rate for either the
rates were
cases (twelve out of
twenty), replacement
higher
1970s or the 1980s, while most of the other cases experienced very marginal declines. Organization
The OECDjobs Study: Facts, Analysis, Strategies (Paris:
for Economic
and Development,
Cooperation
OECD, 1994), chart 16, p. 24.
86
75 (May
of QWERTY," American Economic Review
See Paul David,
"Clio and the Economics
1985); andW. Brian Arthur, "Competing Technologies,
by Histori
Increasing Returns, and Lock-In
cal Events," Economic Journal 99 (March 1989), 116-31. For good extensions to political processes, see
in James A. Caporaso,
An Institutional Perspective,"
ed., The Elu
Stephen A. Krasner, "Sovereignty:
sive State: International and Comparative Perspectives (Newbury Park, Calif: Sage Publications,
1989);
and North
(fn. 20).

WORLD POLITICS
176
cut
in place, such systems may face incremental
Once
are
to
to
resistant
but
radical
reform.87
backs,
they
notoriously
Shifting
an
based arrangements
would
untenable
private, occupationally
place
to finance
burden on current workers,
them
the
requiring
previous gen
tior?s retirement.
eration
s retirement
while
own.
saving for their
so for
is
This
undergo
change.
especially
cannot be isolated from broad social
develop
simultaneously
all institutions
Over
time,
very large ones, which
ments. The welfare
state
last two decades
cial provision.
have
I have
As
is no exception.
But
a transformative
been
argued,
expectations
there
is little
for
period
for greater
sign that the

systems of so
change
have
rested in part on the implicit application of models from the period of
welfare
change,
creates
for these
can be read to suggest

which
that economic
expansion,
in union power, or the presence
the decline
of a strong state
I find little evidence
the preconditions
for radical retrenchment.
state
claims.
still leaves us some distance

from a
investigation
coherent
It does, however,
theory of retrenchment
politics.
comparative
some
a
of
the
blocks
for
such
The
of
pressures
suggest
building
theory.
a
at
center
have
been
the
which
of
dis
long
shifting global economy,
to deserve
cussions
of the contemporary
welfare
state, continue
major
more
more
attention. What
needs
is what
consideration
(if
nuanced)
This
preliminary
happens when
institutionalized
these
collide with popular, deeply

pressures
are
I
have
that politicians
public policies.
emphasized
to pursue
not
that will
their chances for reelec
strategies
likely
damage
tion. The
of
electoral
combined
with
the gen
considerations,
centrality
eral unpopularity
about
hypotheses
These
considerable
some
state cutbacks,
suggests
plausible
the political
for
reform.
preconditions
significant
are
to
and would
need to be subjected
only tentative
of welfare
hypotheses
is compatible
with
sustained
the
scrutiny. Each, however,
comparative
outlined
of
and
with
the
retrenchment
here
evidence
pre
analysis
sented.
there is signifi
First, radical retrenchment
may be facilitated when
are in a
cant electoral slack, that is, when
believe
that
governments
they
to
absorb
the
electoral
of
consequences
strong enough position
unpop
ular decisions.88
limited)
success
Thus,
one
reason
may
have
been
for Thatchers
the division
relative
among
her
87
Thus
(though
still
opponents
in Germany,
States the maturity of existing schemes limited poli
Sweden, and the United
cymakers to very gradual and incremental reforms of earnings-related
pension systems. More dramatic
reform was possible in Britain because the unfunded
scheme was far from maturity,
earnings-related
having been passed only in 1975. Pierson (fn. 31).
88
For an example of this argument, see Garrett
(fn. 41).

177
within
electoral
system. This may have given her
first-past-the-post
room to pursue
that would
have been beyond
policies
unpopular
the reach of a government
in a precarious
electoral position. However,
electoral
slack ex ante is a tricky business,
and most govern
calculating
are
even the
ments
to
As I have indicated,
cautiously.
proceed
likely
with wide
retreated when
confronted
Thatcher
government
generally
more
spread opposition.
of budgetary
Second, moments
of retrenchment
form. Advocates
crisis may open opportunities

for re
to
will
such moments
try to exploit
as an effort to save the welfare

state rather than
present reforms
destroy
to avoid
it. Framing
the issue in this manner may allow governments
cutbacks. Making
the claim of crisis
blame for program
widespread
credible,
however, generally
In turn, the need
requires collaboration
for consensus
makes
with
the political op
to utilize
it difficult
position.
crises to promote
the appearance
of
radical restructuring.
Thus, while
in social programs,
it is
fiscal stress encourages
downward
adjustments
a
a radical overhaul
of
far less clear that it provides
for
social
platform
policy.
will vary with
of retrenchment
advocates
the
the success
Third,
chances for lowering
the visibility
of reforms. Those
retrench
seeking
ment will try to avoid political outcries by diminishing the visibility of

their cutbacks or by trying to hide their own responsibility for unpop
ular outcomes.
Success
in these
efforts,
I have
on the design of political institutions. Whether
argued,
depends
partly
political authority is
or not
to structure the choices available to retrench

helps
is concentrated
and
advocates. Where
(as in Britain
authority
to
will
be
avoid
blame
for
Sweden),
unpop
governments
hard-pressed
concentrated
ment
ular decisions,
but
strategies
plement
a greater
to
capacity
they will have
develop
that obscure
cutbacks.
Governments
and
im
in more
the need to
that minimize
systems must fashion
strategies
fragmented
veto
force multiple
institutional
points. How
through
policy changes
to
for
it
easier
find
duck
ever, they may
accountability
unpopular
poli
cies. Federalism,
for
for example,
considerable
up
opened
possibilities
a tactic that is
to shift the blame for cuts in some programs,
Reagan
central
to the current
deficits
are
efforts of congressional
Republicans.
institutions
the
for changing
(the rules of the
prospects
Finally,
can re
If retrenchment
advocates
game) may be of great significance.
structure
in which
and
trade-offs
between
the ways
taxes, spending,
to shift
and decided,
evaluated,
they may be able
presented,
have
of political
So
these
institutional
shifts
far,
power.
relevance.
In Europe
rare, but several instances may be of growing
the balance
been

178
WORLD
POLITICS
the increasing policy significance of the EC may alter the terrain for
struggles
over
can be
as
presented
legally
or
because
of the single market
state.
the welfare
If reforms
or
required
imperative
economically
moves
toward monetary
national
union,
may be freed
governments
from some blame for welfare-state
In the United
cutbacks.89
States the
new
in Congress
deferred
efforts to cut programs
Republican
majority
to
until after a strong (but only modestly
the
successful)
push
change
intent of the rule changes was to increase the
rules of the game. The
salience of taxes and create a more favorable climate for attacking
social
spending.
sources of cross-national
If this analysis suggests some plausible
vari
con
to
states
it
the
need
also
welfare
and
ation,
highlights
disaggregate
across
cases
in
sider variations
the four
considered
Indeed,
programs.
across programs
outcomes
the con
often differed more
(for example,
trast between
council
and the NHS in Britain)
than across
housing
across pro
It is commonly
countries.
argued that the crucial distinction
universal
and those that target the
grams will be between
programs
poor,
be especially
vulnerable.90 Yet the current
assertion.
in out
this
Rather, variations
support
and that the latter will

does
investigation
comes across
not
in the four countries

do not generally
track the
programs
reasons that
divide.
the
likely
universal/targeted
Among
targeted pro
more vulnerable:
not
cuts in these pro
grams have generally
proved
grams
tend
to
governments
sal programs
yield only minimal

in radical
interested
savings, and conservative

budgetary
to the univer
reform object the most
that require high tax rates and compete with plausible pri
the current
that a
Instead,
suggests
investigation
area of research concerns
the
features
of
that
allow
programs
promising
on voters or
either to obscure the
of retrenchment
governments
impact
to diminish
their own
for unpopular
reforms.91
Programs
accountability
vate
alternatives.
that are poorly
indexed,
for example,
make
it easier
to pursue
a low-vis
ibility strategy of allowing inflation to gradually erode the value of ben

efits.
All of these hypotheses build on the core argument of this essay: that
frontal
assaults
on
the welfare
state
carry
tremendous
electoral
risks.
89
For an argument about how EC institutions may allow blame-avoiding
behavior on the part of
see Andrew Moravcsik,
state governments,
member
the State" (Manu
"Why the EC Strengthens
1994).
script,
90
Robert Kuttner has called this "the most fundamental principle in the political economy of social
in Sidney Blumenthal
and Thomas
and the Democrats,"
spending." Kuttner, "Reaganism, Liberalism,
1988), 113. For a critique, see Pierson
Byrne Edsall, eds., The Reagan Legacy (New York: Pantheon,
(fn. 12), 6,170.
91
See Pierson (fn. 12), 17-26,169-75.

POLITICS
OF THE WELFARE
179
STATE
state is the
of the welfare
of blame
contemporary
politics
politics
avoidance. Governments
the electoral
of mod
imperatives
confronting
ern
undertake
will
when
retrenchment
discover
democracy
only
they
The
ways
to minimize
techniques
the possible
the political
to come
are hard
to variation
costs
involved.
But
as I
emphasize,
such
some
by.While
in policy
this analysis
of
suggests
the most
outcomes,
significant
but commonality.
retrench
Everywhere,
keys
concerns not variation
finding
re
ment
state remains the most
is a difficult undertaking.
The welfare
silient aspect of the postwar political
economy.
so
is
be
this
that old arguments
Understanding
why
requires
a new
a
recast to address
and
of
the
At
rethought
exigencies
setting.
con
time when historical
institutionalism
has become
this
fashionable,
clusion has broad
for
the
of
implications
study
comparative
politics.
con
calls to incorporate
historical
analysis into the study of
are
we must
Yet
remain
of
temporary
cognizant
politics
compelling.92
on
are
in the wrong way. There
the hazards of drawing
history
signifi
The
strong
cant
to
in using historical
social
dangers
study contemporary
analogies
context
since
the
of
social
reformers
and
the
in
goals
politics,
policy
which
have
Instead, histori
they operate
undergone
change.
profound
that social policy change
is a
analysis should emphasize
over time.
on the
so
focus
of
inherited
impact
My
unfolds
structures
cial policy
of the
draws on this precise point. The growth
state has transformed
welfare
the politics
of social policy. A historical
cally grounded
that
process
perspective
ronment
rather
previous
should
in an envi
operate
policymakers
the past,
inherited
from
shaped by policies
that current
echo the conflicts
will
of a
politics
stress
fundamentally
than suggesting
era.
that today's
92
Sven Steinmo, Kathleen Thelen,
and Frank Longstreth,
tutionalism in Comparative Analysis
(Cambridge: Cambridge
eds., Structuring Politics: Historical

Press, 1992).
University

Insti

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The New Politics of the Welfare State

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THE NEW POLITICS OF THE

crisis of the welfare

or the rather reflexive,

implicit application of propositions derived from the study of social

I am grateful to the Russell

for financial and administrative

WorldPolitics 48 (January1996), 143-79

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the role of supportive

and far more

IV builds on this theoretical and empirical analysis to offer some basic

of these points requires elaboration.

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been a favored political activity, contributing greatly to both state

shifts to the right, and

into policy have been newly ascendant

that the price of reform is manage

are not. That

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chology have demonstrated that individuals respond differently to pos

than are positive

their policy preferences

Association of Retired People (AARP)had amembership of twenty

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than one hundred).10 The

by making the effects of policies more difficult to detect or by making

II.The Limits of Existing

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of human capital and certain kinds of labormarket flexibility.

spiral in social provision,

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and firms will

is only one factor in investment

other factors (for example, infrastructure, worker productivity) justify

should not face problems

in social policy would

This content downloaded from 147.251.112.81 on Thu, 20 Feb 2014 09:25:07 AM

stability. In short, policy

and the Politics

tions in social provision largely to differences in the distribution of po

three decades following World War

II. Furthermore, the replacement

data with more fine-grained

tics of the welfare

and goals that characterizes

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POLITICS OF THE WELFARE STATE

left parties but also the more varied constituencies

and that retrenchment

the fact that welfare

shifting base of support may

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vary along crucial

In the field of comparative social policy, the claim that political

veloped primarily in the work of Theda Skocpol and her collabora

II social policy developments.

belated and halfhearted development of socialwelfare

social policies.27 Where

political authority is fragmented, entrenched minorities will often block