New Paths for Third-Sector Institutions in a Welfare State in Crisis: The Case of Portugal

Abstract This article describes the recent changes in the political, cultural and socioeconomic environment of the third sector (TS) in Portugal in the context of crisis and structural adjustment. Belatedly, when compared to many other countries, an overall sector is being structured in Portugal, overcoming the traditional neglect of the political system and the divisions inside the field. The historical institutional approach is here used to make sense of the current changes and debates and the different policy coalitions in place are identified through present and past policy analysis and content analysis of policy debates. This provides a broad background for exploring the hypothesis that the Portuguese TS may be arriving at a critical juncture that will set a new path under the development of a new and broader identity as “social economy.” This paper identifies path-breaking trends, as well as continuities. It argues that the structuring axis TS/welfare state, which has been the driving force of the TS in Portugal, is shifting to the axis TS/economy as a result of changes in both the TS and its political coalitions’ strategies and in the broader context and institutional framework of the welfare state.