Working Paper Series,
Stockholm University, Swedish Institute for Social Research

Abstract: In interdisciplinary research on welfare state regress in Western Europe, interest has focused on the causes and extent of retrenchment. Causal debates have concerned the role of globalization, post-industrialism, European integration, and partisan politics. The "new politics" perspective views pressures towards retrenchment as basically generated by post-industrial changes causing government budget deficits and permanent austerity, developments pressing all governments to attempt to cut welfare state programs. These attempts are resisted by powerful interest groups consisting of welfare state benefit recipients, and therefore retrenchment is likely to be a limited phenomenon. Such recipient-based interest groups generated by welfare states are seen as largely replacing left parties and unions once driving welfare state expansion, thus marginalizing the role of class-related politics in the retrenchment process. Conclusions pointing to only limited retrenchment and a minor role for partisan politics have been criticized because of the non-theoretical definition of the welfare state and because of the concentration on social expenditures. The power resources approach, focusing on the role of distributive conflicts between major interest groups for welfare states development, widens the theoretical definition of the welfare state to include full employment as well as social transfers and expenditures. In Western Europe full employment was one of the cornerstones of the postwar "Keynesian welfare state," entailing a social contract which markedly differed from the one in the United States. The return of mass unemployment in Europe since the mid-1970s constitutes a major welfare state regress, and at the same time generates government budget deficits and austerity. Analyses based on citizenship rights in social insurance programs indicate major retrenchment in some West European countries, with political parties and welfare state institutions in significant roles. In this perspective the return of mass unemployment and cuts in social rights appear as a reworking of the European post-war social contract. The widening of the scope of welfare state indicates that trans-nationalization may have differing effect on its different aspects.

Keywords: welfare state retrenchment; globalization; European Union; partisan politics; unemployment.

25 pages, May 5, 2003

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