The Politics of Welfare State Retrenchment: A Literature Review

Abstract Welfare state retrenchment is widely seen as a highly unpopular endeavour and, therefore, as politically difficult to pursue. This assumption has underpinned most of the political science research on this issue, notably Paul Pierson's seminal contributions about the ‘new politics of the welfare state’. Yet, the question remains why and under what circumstances cutbacks take place in highly developed welfare states despite these formidable political obstacles. This article reviews the literature on the politics of retrenchment, namely on the impact of socio‐economic problem pressure, political parties, political institutions, welfare state structures and ideas. Most authors agree that socio‐economic problems – particularly domestic problems – contribute to an atmosphere of ‘permanent austerity’ which inspires cutbacks. Moreover, according to most scholars, the extent of retrenchment possible depends on the specific institutional configuration of a political system and the path dependence of existing welfare state structures. The debate on the relevance of political parties and ideas, by contrast, is still far from settled. Further unresolved issues include the nature of the dependent variable in retrenchment studies. Also, the exact motives for cutbacks are theoretically still little understood, as are the political mechanisms through which they are realized. I argue that, because of the nature of these persisting issues, the pluralistic dialogue between different methods and approaches – as well as their combination – remains the most promising way forward in the study of welfare state politics.