Contentious Institutions

Welfare states in Western countries have shared similar goals, yet the choice of institutions to approach these shared goals has generated protracted power struggles among major interest groups and great cross-country variation in institutional structures. Relating recent debates on new institutionalism to earlier debates on power, this paper outlines an augmented rational-action approach to the explanation of the origins of welfare state institutions and of variations in their degree of path dependence. With a differentiated concept of power costs and the degree of power asymmetry among actors as a central variable, this augmented approach partly combines some salient characteristics of the rational-choice, historical, and sociological versions of new institutionalism. The augmented rational-action approach proves fruitful in understanding conflicts characterizing the emergence and change of major social insurance institutions in 18 rich Western countries since the late 19th century and up to the present. It complements rational-choice institutionalism focused on voluntary cooperation, contracts and conventions.