In the past three decades, the systems of social consumption in advanced industrial countries have undergone significant changes. Economic and demographic changes have necessitated adaptations to cover new risks in addition to the old while making the welfare states fiscally sustainable (Armingeon and Bonoli 2006). In the period of welfare state expansion, partisanship strongly manifested itself in the battles over the introduction of welfare state programs and their expansion. Expenditures were a reasonably good proxy for generosity, and scores of quantitative studies showed strong effects of partisanship. Quantitative analyses also demonstrated the depressing impact of veto points on expenditures (Huber and Stephens 2001). In the era of retrenchment and recalibration, problem pressures and policy legacies have added to the complexity of policy-making processes and raised the question whether partisanship continues to matter. In line with the argument in this book, this chapter is the first of three studying the political determinants of consumption and investment policies and their distributive effects. We focus on the political determinants of social consumption policies across advanced industrial societies. Ansell and Gingrich (this volume) develop a similar analysis of social investment policies. Finally, Beramendi (this volume) analyzes the distributive impact of different combinations of these two sets of policies.

We analyze the determinants of extensive or far-reaching reforms, and we focus in particular on the impact of partisanship on the reform process. Our argument in its briefest form is that partisan preferences on the Left and the Right as to the kinds of reforms to be implemented remain quite distinct, but that the translation of these preferences into policies is shaped by the interaction of the magnitude of economic and demographic problems, policy legacies, constitutional veto points, and coalitional pressures.

Most parties have accepted the need to restrict some benefits (e.g., raise the retirement age) and to reevaluate the merits of public and private participation in the provision of social services (e.g., employment agencies).