Empirical puzzle

In recent decades, policymakers in all advanced Western nations have implemented encompassing welfare state reforms, breaking with past welfare arrangements. Social democracy, in particular, engaged in significant policy change under the Third Way paradigm (Giddens 1998; Cuperus et al. 2001; Green-Pedersen et al. 2001; Clasen 2002; Bonoli & Powell 2004; Merkel et al. 2008; Huo 2009; Randall & Sloam 2009; Keman 2011). The transformation and modernisation of social democracy under Third Way agendas was a successful strategy in the early and mid-1990s, as many social democratic parties regained power after often long periods in opposition (Cuperus & Kandel 1998; Powell 2004). The Third Way was an explicit appeal to new voters from the centre ground, using well-known labels such as New Labour in Britain or ‘die Neue Mitte’ (the New Centre) in the case of the German social democratic party (SPD). In office, the new agenda became visible as Third Way social democracy introduced welfare state reforms that broke with social democracy's traditional reputation on welfare, with which ties with its core constituency in the 20th century had been forged (Esping-Andersen 1985, 1990; Bonoli & Powell 2004; Merkel et al. 2008; Huo 2009).

However, in many Western countries, social democratic parties suffered a remarkable electoral decline after the turn of the millennium. Parliamentary elections in countries such as Denmark, Germany, the Netherlands and the United Kingdom resulted in disastrous losses for the incumbent social democratic parties that had gained office under the Third Way agenda. The 2009 European Parliament elections showed similar tendencies at the supra-national level. The losses were typically concentrated among social democracy's core constituency of manual workers and lower white-collar employees, indicating that these parties will continue to suffer a weakened position in the near future. In contrast, many parties on the left and right wings of the party spectrum increased their electoral strength or even emerged as new competitors. In a postscript to a volume on the Third Way (Bonoli & Powell 2004), Bonoli (2004: 210f ) compares party shares from the early 2000s with corresponding figures from the 1990s and characterises the Third Way as an electoral failure.