Welfare Retrenchment

This chapter examines the debate over the retrenchment of the welfare state. It discusses Paul Pierson’s groundbreaking ‘new politics of the welfare state’ thesis, which argues that the politics of welfare retrenchment operates according to fundamentally different rules from the politics of welfare expansion. In particular, the presence of groups with a shared interest in preserving existing social policies means that the defence of the welfare state is not left just to labour and parties of the left. In addition, both recipients and providers of welfare policies stand ready to mobilize against programme cuts, making retrenchment exceedingly difficult. To the extent that retrenchment takes place, Pierson contends that it occurs primarily via techniques of obfuscation that hide the government’s responsibility for its actions. The chapter also analyses claims that retrenchment is more extensive than Pierson acknowledges if a different metric is used, such as social spending relative to need, or if recent cutbacks are taken into account, such as those that occurred in Greece in response to the sovereign debt crisis. Finally, the chapter traces an alternative trajectory of welfare reform. As against the unsavoury and conspiratorial methods emphasized by Pierson, governments may enact spending cuts by taking their case to the public, hitching retrenchment to higher objectives, negotiating with the social partners or political opposition, and addressing concerns about fairness. The two channels of reform are not mutually exclusive; rather, they point to different ways to cut, adapt, and modernize the welfare state.