In the previous sections I have shown that the interplay between economic, demographic, and political pressures on Bismarckian pension schemes has triggered a multitude of reform measures throughout the 1990s, which were primarily but not exclusively aimed at curbing the growth of pension spending. This development has also left its mark on the scholarly debate about the welfare state. In recent years, welfare state research has gradually shifted from studying welfare state expansion to studying the retrenchment of welfare state arrangements (Green-Pedersen and Haverland 2002). In this chapter, I will first provide a brief survey of the most important theoretical approaches to welfare state retrenchment and discuss their usefulness for the explanation of pension policy outcomes. I will then develop a distinct theoretical framework based on the concept of actor-centred institutionalism. This framework establishes a number of heuristic hypotheses that allow us to identify the political and institutional conditions facilitating or impeding the problem solving capacity of national pension policymakers.

Social policymaking in an era of retrenchment:A review of theoretical approaches

The new politics of the welfare state

In his seminal 1994 work, the Politics of Retrenchment, Paul Pierson has pointed to the remarkable resilience of welfare state arrangements in spite of an increasingly fierce climate of fiscal austerity. Following Pierson, the politics of retrenchment is qualitatively different from the politics of expansion. While the “old politics” of welfare expansion is seen as a strategy of “credit claiming” for highly popular initiatives, the “new politics of the welfare state” is regarded as an attempt to avoid blame for unpopular policies. Once social policies have become established in a society, a powerful network of interests is likely to evolve around these arrangements, which will try to avert any efforts aimed at rolling back the welfare state. As Pierson has argued in his earlier work (1994; 1996), these client-based policy interest groups have to a large extent replaced leftist parties and trade unions as upholders of welfare objectives. Their impact on the success of governmental retrenchment efforts will primarily depend on the specific structure of welfare programmes. According to Pierson, the inherited profile of social policy programmes is the most important predictor for the relative resilience of welfare arrangements.