Policy instruments and welfare state reform

Abstract

A core, but so far untested, proposition of the new politics perspective, originally introduced by Paul Pierson, is that welfare state cutbacks will be implemented using so-called ‘invisible’ policy instruments, for example, a change in indexation rules. Expansion should, by implication, mainly happen using ‘visible’ policy instruments, for example, a change in nominal benefits. We have coded 1030 legislative reforms of old-age pensions and unemployment protection in Britain, Denmark, Finland and Germany from 1974 to 2014. With this unique data at hand, we find substantial support for this crucial new politics proposition.