Scholarly research has long struggled to define the nature and role of institutional legacies – the inheritance of earlier forms – in processes of institutional change. Although conceptualization of such legacies varies widely, from distributions of power and resources to institutional performance and ideologies, the avatars of an institution's past are generally considered an ineluctable feature of its present. And while legacies often enter accounts of institutional stability, how such history bears upon processes of institutional change remains far from clear. In the case of pension reform, some scholars argue that as the cost of an institution's prior financial commitments rises, so too does pressure for fundamental change; others claim precisely the opposite: that expanding political constituencies and financial liabilities make radical change increasingly unlikely. As the analysis in Chapter 2 showed, both accounts may be correct, but not universally so. The effect of prior pension commitments on the likelihood of privatization depends upon the magnitude of that commitment, such that rising pension costs generate pressure for structural reform only when these liabilities are modest; only in large and generous pension systems does policy “lock-in” obtain with rising benefit costs.

The cross-national analysis also pointed to an alternative conceptualization of institutional legacies that helps to explain how large and small welfare states can long be stable but later become subject to path-departing change. Such legacies entail citizens' beliefs about and perceptions of the institution, or what I call its political legacy.