We examine whether a fundamental change in the core dimension of modern 20th century statehood, the welfare state, has become evident in response to changed exogenous and endogenous challenges. By combining quantitative and qualitative approaches we take stock of social policy development in four advanced welfare states – Austria, Denmark, New Zealand and Switzerland – over the last 30 years. Neither spending patterns nor structural changes support a ‘race to the bottom thesis’, according to which the changed environment of welfare state policies has led to a downward spiral in benefit provision. On the contrary, we show that social spending levels have risen, mainly due to a catch-up of former welfare state laggards. In structural terms, a blurring of welfare regimes can be observed. This twofold process can be described as dual convergence.

Introduction

The welfare state is intrinsic to statehood in contemporary advanced democracies. However, rising unemployment, increasing public debt, declining economic growth, an ever more competitive economic environment and changing demographics have increased the pressure on advanced welfare states over the last decades. How have welfare states responded to these changing conditions? What patterns of welfare state adaptation can we observe and what are their causes? Does politics still matter for social policy-making or is there a market-driven development towards a residual welfare state model?

The influence of the state on the trajectory of human lives is more comprehensive and sustained than that of any other organizational construct. We provide a definition of the modern nation-state in four intersecting dimensions – resources, law, legitimacy, and welfare – and review the history and status of each dimension, focusing on the fusion of nation and state in the 19th century, and the development of the ‘national constellation’ of institutions in the 20th. We then assess the fate of the nation-state after the Second World War and, with western OECD countries as our sample, track the rise and decline of its Golden Age through its prime in the 1960s and early 1970s. Finally, we identify the challenges confronting the nation-state of the 21st century, and use the analyses in the following eight essays to produce some working hypotheses about its current and future trajectory – namely, that the changes over the past 40 years are not merely creases in the fabric of the nation-state, but rather an unravelling of the finely woven national constellation of its Golden Age. Nor does there appear to be any standard, interwoven development of its four dimensions on the horizon. However, although an era of structural uncertainty awaits us, it is not uniformly chaotic. Rather, we see structured, but asymmetric change in the make-up of the state, with divergent transformations in each of its four dimensions.

What is the state of the state? The members of the national Research Centre Transformations of the State (TranState) at the University of Bremen use the contrast with the OECD nation-state during its ‘Golden Age’ in the 1960s and early '70s to study the rapidly changing interface between international and domestic politics, and between public and private governance. Studies currently underway at TranState confront the changes in the tightly woven fabric of the twentieth-century western, multi-functional state, which emerged after World War II with the functional amalgamation at the national level of the Territorial State, the state that assures the Rule of Law, the Democratic State, and the Intervention State. This functional definition is expressed in the acronym TRUDI.

Both TranState research and the contributions to this volume are aligned along TRUDI's four dimensions of statehood: resources (financial, means of force), rule of law, (democratic) legitimacy, and welfare. These dimensions developed over four centuries and merged, during the ‘Golden Age’, in one institution, the nation-state. Since then, however, processes of globalization, denationalization, privatization as well as individualization have initiated a new dynamic. The finely woven national constellation of the Golden Age state is coming apart – it is unravelling. Yet though an era of structural uncertainty is ahead, not everything is in flux. We may see structured asymmetric change in the make-up of the state, with divergent transformations in each of its four dimensions.