Paul Pierson *
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The much-discussed crisis of the welfare state is now two decades old. The tremendous twentieth-century expansion of social programs has been a remarkable feature of advanced industrial societies. In all these countries the welfare state is a core institution, accounting for between one-fifth and one-third of GNP. Ever since the postwar economic boom ended in the early 1970s, however, social programs have faced mounting political challenges. Questions of expansion have long since given way to an acknowledgment of the limits to welfare state growth and the prospect for extended austerity. Despite this fundamental change, however, we still know stunningly little about the politics of social policy retrenchment. In contrast to our vast knowledge of the dynamics of welfare state expansion--arguably the most well-tilled subfield of comparative public policy--welfare state retrenchment remains 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.
This puzzling state of affairs results in part from the very success of earlier scholarship. The quality of historical research on the welfare state has encouraged a simple process of borrowing already developed models for the examination of a new environment. I would argue, however, that there are compelling reasons to reject such a straightforward extrapolation, that the new politics of the welfare state is instead quite different from the old. Welfare state expansion involved the enactment of popular policies in a relatively undeveloped interest-group environment. By contrast, welfare state retrenchment generally requires elected [End Page 143] officials to pursue unpopular policies that must withstand the scrutiny of both voters and well-entrenched networks of interest groups. It is