Coping with Permanent Austerity Welfare State Restructuring in Affluent Democracies

T H E welfare states of the affluent democracies now stand at the centre of political discussion and social conflict. Analysts frequently portray these conflicts as fundamental struggles between supporters and opponents of the basic principles of the post-war social contract. They often emphasize that the politics of social policy are played out against the backdrop of a transformed global economy that has undercut the social and economic foundations of the welfare state. While containing elements of truth, such portrayals distort crucial characteristics of the contemporary politics of the welfare state. Changes in the global economy are important, but it is primarily social and economic transformations occurring within affluent democracies that produce pressures on mature welfare states. At the same time, support for the welfare state remains widespread almost everywhere. In most countries, there is little sign that the basic commitments to a mixed economy of welfare face a fundamental political challenge. Nor is there much evidence of convergence towards some neoliberal orthodoxy. Yet the chapters in this volume have also stressed that welfare states are undergoing quite significant changes. In this conclusion, I argue that the contemporary politics of the welfare state take shape against a backdrop of both intense pressures for austerity and enduring popularity. In this context, even strong supporters of the welfare state may come to acknowledge the need for adjustment, and even severe critics may need to accept the political realities of continuing popular enthusiasm for social provision. Thus, in most of the affluent democracies, the politics of social policy centre on the renegotiation, restructuring, and modernization of the terms of the postwar social contract rather than its dismantling. The crucial issue is whether particular national settings facilitate the emergence of such a centrist reform effort, and if so, on what terms.