Contentious Institutions: An Augmented Rational-Actor Analysis of the Origins and Path Dependency of Welfare State Institutions in the Western Countries

Welfare states in the Western countries have had very similar goals, yet the choice of institutions to approach these shared goals has generated protracted power struggles among major interest groups and great cross-country variation in institutional structures. Relating recent debates on new institutionalism to earlier debates on power, this paper outlines an augmented rational-actor approach to the explanation of the origins of welfare state institutions and of variations in their degree of path dependence. With a differentiated concept of power costs and the degree of power asymmetry among actors as a central variable, this augmented model partly combines some salient characteristics of the rational-choice, historical, and sociological versions of new institutionalism. The augmented rational-actor approach proves fruitful in understanding conflicts characterizing the emergence and change of major social insurance institutions in 18 rich Western countries since the late nineteenth century and up to the present. It complements rational-choice institutionalism focused on voluntary cooperation, contracts and conventions.