Introduction

Some social security research suggests that ‘the alignment of political forces conspires just about everywhere to maintain the existing principles of the welfare state.’ Much of the knowledge in the field agrees that ‘the cards are very much stacked in favor of the status quo’ (Esping-Andersen 1996: 265 and 267). Studies on welfare state reform indicate that retrenchment tends to be more rhetoric than reality, as affecting core areas of public policy. The gap between the rhetorical claims and the actual record of Thatcher's social security reform serves as a good example (Bradshaw 1992; Pierson 1994). Parsons (1995: 577) puts forth that ‘at best, government tampered at the margins with … various combinations of policy maintenance and succession.’ Based on a comparative study on welfare state retrenchment in industrialized societies, Mishra (1990) concludes that despite rhetoric, governments have, in practice, been reluctant, unwilling, and unable to go beyond partial termination – such as cutbacks and savings – to make more substantial changes.

Yet not everyone agrees that welfare states of the past decades are so impotent (cf. Bovens, 't Hart and Peters 2001). In a more positive assessment, Scharpf and Schmidt (2000: 19) suggest, ‘there are indeed several paths toward a successful adjustment of advanced welfare states.’ They offer this statement despite the fact that they found no solution for the adequate adaptation to international economic pressures. Scharpf and Schmidt analyze how countries differ in their macroeconomic policy responses; some nations alter their exchange rate policy, while others attempt to impose wage restraints. Whatever the response, it becomes clear that welfare states face respective problems as a consequence of their respective basic social security systems (Esping-Andersen 1999). This leads us to anticipate that countries with a similar basic structure face similar problems to which similar reactions can be expected. If, however, the social security dilemmas are similar, the international challenges identical, and the social security systems very comparable, why are solutions to those similar predicaments strikingly different? Belgium and the Netherlands are both continental welfare states, with occupational social insurance programs, corporatist decision-making arrangements and consensual political systems.