Abstract

The question of which factors shape the development of social programs in the phase of retrenchment has moved to the fore of scholarly debates on the welfare state. Conventional wisdom held that the degree to which schemes withstand curtailments varies with the degree of universalism or middle class integration. An influential attack on this conventional wisdom by Paul Pierson argued that selective programs were the winners of the retrenchment phase, and that the degree of middle class integration does not explain program-specific trajectories. Departing from a critical review of his argument, the paper re-examines Pierson's claims. It shows that an examination of the extent to which conservative governments have realized their proclaimed policy goals does not provide an answer to the question of to which extent various groups of welfare beneficiaries weather the storm of retrenchment policies. By holding the degree of middle class integration constant, and comparing the development of selective programs in the United States and in Germany, the empirical analysis produces two major findings. First of all, the beneficiaries of selective programs cannot be considered winners of the retrenchment phase; secondly, there is a marked country-specific variation in the development of selective programs, as German poor relief recipients stood their grounds much better than their American counterparts. Theorizing about the proper conceptualization of welfare state retrenchment, the paper argues that program-specific trajectories are largely a function of the financing structure of the scheme which shape the fiscal interests of state élites. To what extent these interests translate into effective retrenchment hinges upon the coalition chances of public policy makers with collective actors who represent cost-control interests on the one side and need satisfaction interests on the other.