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The New Politics of the Welfare State Author(S): Paul Pierson Source: World Politics, Vol 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: The Johns Hopkins University Press Stable URL: http://www.jstor.org/stable/25053959 Accessed: 01/08/2009 16:03 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=jhup. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected]. The Johns Hopkins University Press is collaborating with JSTOR to digitize, preserve and extend access to World Politics. http://www.jstor.org THE NEW POLITICS OF THE WELFARE STATE ByPAULPIERSON* much-discussed crisis of the welfare state is now two decades THE old. The tremendous twentieth-century expansion of social pro grams has been a remarkable feature of advanced industrial societies. In state a core all these countries the welfare is institution, accounting for between one-fifth and one-third of GNP. Ever since the postwar eco nomic boom ended in the early 1970s, however, social programs have faced mounting political challenges. Questions of expansion have long to an to state since given way acknowledgment of the limits welfare growth and the prospect for extended austerity. Despite this funda we mental change, however, still know stunningly little about the poli In contrast to our vast tics of social policy retrenchment. knowledge of state most the dynamics of welfare expansion?arguably the well-tilled state re subfield of comparative public policy?welfare retrenchment mains largely uncharted terrain.1 Theoretically informed discussion has been limited to very abstract commentaries or the rather reflexive, often implicit application of propositions derived from the study of social policy expansion. state in success This puzzling of affairs results part from the very of on earlier scholarship. The quality of historical research the welfare state a of has encouraged simple process borrowing already developed models for the examination of a new environment. Iwould argue, how are reasons to a ever, that there compelling reject such straightforward new state is extrapolation, that the politics of the welfare instead quite state enactment different from the old. Welfare expansion involved the of in a environ popular policies relatively undeveloped interest-group ment. state By contrast, welfare retrenchment generally requires elected * am to to I grateful the Russell Sage Foundation for financial and administrative support and as as comments. Glatzer for considerable research assistance, well helpful Miguel1 state see Worlds On welfare expansion, G?sta Esping-Andersen, The Three of Welfare Capitalism (Princeton: Princeton University Press, 1990); and Evelyne Huber, Charles Ragin, and John D. Stephens, "Social Democracy, Christian Democracy, Constitutional Structure, and theWelfare State," 99 American Journal of Sociology (November 1993). WorldPolitics 48 (January1996), 143-79 144 WORLD POLITICS officials to that must pursue unpopular policies withstand the scrutiny of both voters and well-entrenched networks of interest groups. It is not to therefore surprising that variables crucial understanding the for mer are use one. process of limited for analyzing the latter to an state This essay seeks lay the foundations for analysis of welfare I on retrenchment. emphasize the critical constraints reform resulting from the role of supportive interest groups and, ultimately, voters.2 The state growth of the welfare itself transforms the politics of social policy. a state to more As result, the welfare has proved be far resilient than more other key components of national political economies and far state one to ex durable than existing theories of the welfare would lead is in pect. The argument presented four stages. Section I highlights the characteristic qualities of retrenchment politics. Section II discusses in more state detail the principal theories of welfare expansion and sug a gests why the distinctiveness of retrenchment makes straightforward to state application of these arguments the contemporary welfare prob lematic. Section III explores the dynamics of retrenchment in four cases: Great Britain, the United States, Germany, and Sweden. Section IV builds on this theoretical and empirical analysis to offer some basic propositions about retrenchment politics. I.Why the Politics of Retrenchment Is Different This essay s central claim is that because retrenchment is a distinctive to same process, it is unlikely follow the rules of development that op state are two erated during the long phase of welfare expansion. There reasons this. the of fundamental for First, political goals policymakers are different; second, there have been dramatic changes in the political context. Each of these points requires elaboration. a to There is profound difference between extending benefits large numbers of people and taking benefits away.3 For the past half century, was a expanding social benefits generally process of political credit to overcome concern tax claiming. Reformers needed only diffuse about rates resort to (often sidestepped through social insurance "contribu tions") and the frequently important pressures of entrenched interests. had Not surprisingly, the expansion of social programs until recently 2 s as In this sense, my analysis parallels Verdier recent effort to interpret foreign trade policy "the outcome of a process influenced by voters." Daniel Verdier, Democracy and International Trade: Britain, xv. France and the United States, 1860-1990 (Princeton: Princeton University Press, 1994), 3 6 R. Kent Weaver, "The Politics of Blame Avoidance," Journal of Public Policy (October-Decem ber 1986). 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 to A combination of economic changes, political shifts the right, and costs states rising associated with maturing welfare has provoked grow to turn ing calls for retrenchment. At the heart of efforts these de mands into policy have been newly ascendant conservative politicians. Conservative governments have generally advocated major social pol icy reforms, often receiving significant external support in their effort, new especially from the business community.5 Yet the policy agenda contrast to initiatives dur stands in sharp the credit-claiming pursued state ing the long period of welfare expansion. The politics of retrench ment it on is typically treacherous, because imposes tangible losses voters return concentrated groups of in for diffuse and uncertain gains. Retrenchment entails a delicate effort either to transform program an at matic change into electorally attractive proposition or, the least, to costs Advocates retrenchment minimize the political involved. of must of reform is persuade wavering supporters that the price manage a able?a task that substantial public outcry makes almost impossible. an in Retrenchment is generally exercise blame avoidance rather than costs are con credit claiming, primarily because the of retrenchment centrated (and often immediate), while the benefits are not. That con a centrated interests will be in stronger political position than diffuse ones a in As interests is standard proposition political science.6 become more concentrated, the prospect that individuals will find itworth their to concen while engage in collective action improves. Furthermore, are more to to trated interests likely be linked organizational networks about how their interests. that keep them informed policies affect These informational networks also facilitate political action. reason An additional that politicians rarely get credit for program cutbacks concerns the well-documented asymmetry in the way that voters react to losses and gains. Extensive experiments in social psy 4 in and Peter Flora and Arnold J. Heidenheimer, eds., The Development of Welfare States Europe America (New Brunswick, N.J.: Transaction, 1982). 5 to treat as As recent research has suggested, it would be wrong business always and everywhere to opposed welfare state programs. For illuminating studies of the United States, see, for example, Colin Gordon, New Deals: Business, Labor, and Politics inAmerica, 1920-1935 (Cambridge: Cambridge or University Press, 1994); and Cathie Jo Martin, "Nature Nurture? Sources of Firm Preference for National Health Reform," American Political Science Review 89 (December 1995). Nonetheless, it is clear that most business organizations in all the advanced industrial democracies have
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