In 1978, Norway established a sickness insurance with no waiting days and full wage compensation. For the past thirty years, Norwegian authorities have repeatedly attempted to change this incentive structure in order to reduce comparatively high sickness-absence levels, but with little success. Thus, Norway seems to exemplify the retrenchment literature's diagnosis of fiscally unsustainable welfare states whose attempts to reduce costs are blocked by strong interest groups and institutional inertia. However, while changes in the incentive structure have been blocked, policy development has taken other paths.
New structures for monitoring sickness absence and for activating employers and employees have been established. The course of a sickness-absence spell has been regulated, with ‘stop points’ and procedures which must be adhered to. Rather than increasing employers’ and employees’ economic responsibility, these actors have been made responsible for the establishment of individual plans, they are to enter into dialogue at compulsory meetings and aim towards the use of active measures. While this often has been perceived as a sign of inability to reform, it may alternatively be viewed as the silent establishment of new relations of governance.
By analysing this specific case, the paper addresses the wider issue of welfare state change. Through the analysis of incremental, qualitative reforms such as these – often overlooked in comparative social policy research – it throws light upon how social policies may work through restructuring citizen–employer–social partner–state relationships.