Why are they doing it? Social democracy and market-oriented welfare state reforms

Comparative research emphasises social democratic parties as leading political forces when universal welfare states are reformed in accordance with market-oriented principles. This is surprising considering the many portrayals of universal welfare states as an institutional feature, which favours the social democrats in political terms. Thus, this article raises a question contemporary research so far has left unanswered: why are they doing it? This question is answered through comparisons of reforms in labour market policy and primary school policy in Sweden and Denmark since the late 1980s, and the theoretical argument is as follows: social democratic governments decide upon reforms when the party elite perceive policy problems as a threat to the legitimacy of the universal welfare state. Political institutions, i.e. welfare policies, functioning as power resources, need to be legitimate otherwise they may work against basic political interests. This argument emphasises strategic and intentional actors as well as institutional politics as explanatory variables and is, with some modifications, empirically supported.