We examine whether a fundamental change in the core dimension of modern 20th century statehood, the welfare state, has become evident in response to changed exogenous and endogenous challenges. By combining quantitative and qualitative approaches we take stock of social policy development in four advanced welfare states – Austria, Denmark, New Zealand and Switzerland – over the last 30 years. Neither spending patterns nor structural changes support a ‘race to the bottom thesis’, according to which the changed environment of welfare state policies has led to a downward spiral in benefit provision. On the contrary, we show that social spending levels have risen, mainly due to a catch-up of former welfare state laggards. In structural terms, a blurring of welfare regimes can be observed. This twofold process can be described as dual convergence.

Introduction

The welfare state is intrinsic to statehood in contemporary advanced democracies. However, rising unemployment, increasing public debt, declining economic growth, an ever more competitive economic environment and changing demographics have increased the pressure on advanced welfare states over the last decades. How have welfare states responded to these changing conditions? What patterns of welfare state adaptation can we observe and what are their causes? Does politics still matter for social policy-making or is there a market-driven development towards a residual welfare state model?