Table of Contents
Hacker’s Four Modes of Policy Change
1. Health Care Policy and Reform in Germany
1.1 Principles and Basic Elements of the German Health Care System
1.1.1 The Health Insurance 20
1.1.2 Rights and Benefits in the Health Care System 21
1.2 Health Care in the Course of the Political Development
1.2.1 Free Choice to Choose –
Reforms during the Past Decade 23
1.2.2 The Politics of the New Government 26
2. Health Care Policy and Reform in Sweden
2.1 Principles and Basic Elements of the Swedish Health Care System
2.1.1 The National Health System 33
2.1.2 Rights and Benefits in the Health Care System 34
2.2 Health Care in the Course of the Political Development
2.2.1 The “Choice Revolution” –
Privatisation of Swedish Health Care Service 34
2.2.2 Beyond Managed Competition –
Continued Privatisation of the Health Care System 38
3. Performance and Reform – Germany and Sweden in Comparison
The provision of welfare is a defining characteristic of the states in Europe, as well as the target of various reform efforts. Within the European welfare states, health care is embedded as a public affair and despite slight variations, the majority of European states guarantees most of the cost of using health services to almost all of their citizens (OECD 1992; 1994). As health care is among the most personal issues, it is also among the most politically discussed. During the 1990s, reforms were introduced in the health care sector in many European countries with the common goal to make existing health care systems more cost efficient and gain greater control over how public resources were spent within them (Mossialos/Le Grand 1999). However, expenditure cuts with regard to the health care system are politically delicate.
Health care has consumed a large and growing portion of social spending in all advanced industrialised societies, particularly in the last decade. This cost explosion coincided with the global economic slowdown and worries about the fiscal viability of the welfare state (Giaimo 2001). Reasons for escalating health care costs are, although to varying degrees, common to Western countries. The health care sector provides fertile ground for technological innovations that may prolong life but at considerable expense (Vang 1990; Rutten/Haan 1990). Moreover, once these discoveries are made, it is extremely difficult for insurers or governments to limit their provision, as patients demand access to these treatments. Furthermore, the aging population of Western countries has direct consequences for health care because older persons are more likely to be in need of cost intensive treatment and/or care due to acute illness or chronic conditions. The ‚turning grey of society’ characterises as a developmental trend the Western countries in a similar way. The relation between those aged 65 or above to the population in gainful employment age will increase in a European average from present 22 to 39 to 100 in 2030. The German population reached with 40 years the highest average age of all countries in the European Union. Germany and Sweden indicated one of the highest population shares of senior citizens (Alber/Schölkopf 1999: 227). Nevertheless, Germany and Sweden do not claim a special position with regard to an unusual demographic burden in international comparison; rather, both countries belong to a group of countries, which especially have to struggle with problems of demographic change. At the same time, birth rates are no longer balanced with increasing longevity, so that there will be fewer working age persons in the future to bear the financial requirements for care (Mendoza/Hernderson 1995 a). The EU-average birth rates almost halved as compared to 1960 and recently evened out at a relatively low level of 1.5 children per woman (Eurostat 2004). Therefore, for the near future, a stagnating up to declining total population of the EU is prognosticated (Alber 2002: 7; 2001).
The systems of health care in Germany and Sweden both have mirrored strong features of equality institutionalised as social rights of citizens and have contributed to a complex system of social security, with guaranteed provision of professional health care at its peak. At present, apart from the debate on the limits of state and market operation in the social domain, the health care sectors in Germany and Sweden have become major sources of problems. The German system preserves more than ever, but it does so on a basis of financing that does not develop in line with overall growth (Evers/Klein 2001). The Swedish system has faced considerable change, which has also resulted in questions addressing doubts if equity in providing health services can and will be maintained (Blomqvist 2002; 2004).
Governments and employers claimed that health care costs posed immediate and long-term problems and began to search for ways to address them. The ‘new politics of the welfare state’ – Pierson’s (1996) famous concept, which deals with welfare state reform in the face of changing demographic and tougher economic conditions – has also modified the position of diverse welfare state stakeholders. The actions and preferences of payers and the state are determined by the prevailing health care system as well as by the political system and whether it provides them an opportunity to influence health policies (Giaimo 2001).
The views of those who finance the welfare state have steadily gained influence in policy debates, while those who provide and receive social benefits have increasingly found themselves on the defensive. Employers and government policy makers, and their interest in cost containment, have become the driving force behind welfare state reform. (ibid: 334)
However, the aim of containing welfare state expenditure has been controversial. It not only threatens the privileges of constituencies who benefit from social programmes (Pierson 1995, 2001), but also raise fundamental distributional concerns as welfare states have sought to protect the most vulnerable from market forces (Esping-Andersen 1990). In the context of the new politics of the welfare state, the decisive questions are then, whether payers’ and policy makers’ cost containment agendas have succeeded and if so, whether the renunciation of equity has been the price of success by shifting the burdens of welfare state reform disproportionately to the weakest members of society (Giaimo 2001).
„As is true of other fields, welfare state scholarship is more assured in its treatment of continuity than of change” (Daly/Lewis 1998: 18). Although it is an extendedly discussed topic, the change and transformation of welfare states have not received adequate attention, as these elements have not automatically been taken into consideration. During the last decade of the 1990s until today, the period I will focus on, reform of the specific field of national health policies has dominated the political agendas of advanced industrial states as never before. However, welfare state research has concentrated on the post-1970s development of other prominent fields of social policy and surprisingly little attention has been dedicated to health care, leaving the field almost entirely to health policy specialists. This lack of sociological research represents a considerable gap, since recent progress of health care reform raises important problems not just about health policy but about the politics and future of the welfare state in general.
Health care reform represents something of a blind spot in contemporary political analysis, obscured by the emphasis on policy details in much comparative policy research and by the fascination with classic income-replacement programmes in much welfare-state scholarship. (Hacker 2004 a: 723-724)
One reason for the separation of research on health care from mainstream comparative research may be the complexity of this multidisciplinary field. Consequently, political scientists working in this field are often seen as area specialists rather than political science generalists. However, this tendency towards a separation between health policy and political science is adverse as health policy studies could in many cases benefit from a more precise application of general theory, especially when it comes to questions like the origins of policy choices, instead of being overly descriptive. Mainstream comparative political theory would be supplemented by a deeper understanding of the forces that shape policy outcomes in an area that constitutes one of the largest sectors of the economy and tends to occupy a central position in everyday politics in most Western countries (Hacker 2004 a).
The provision of health care involves several dimensions that are central to the study of political science. First, the conflict between health care a highly desirable social good, which most people think should be allocated on the basis of need, rather than through the market or ability to pay, and the limitedness of public resources requires decisions about fairness and solidarity. Secondly, political power in the health care sector tends to be separated between a variety of different actors: besides politicians, commercial enterprises, charity organizations and professional groups are involved. In almost all developed countries, the state assumes the main responsibility for providing at least basic, acute health care to its citizens, often relying on private actors to fulfil this responsibility. Consequently, health politics is shaped by the different ways in which public policy makers strive to maintain control over how resources are spent within the complex networks of actors, who provide health insurance and/or health care services (Mendoza/Henderson 1995 a). How this control is exercised and the extent to which the state itself takes on direct responsibility for the provision and financing of health care is, as I will show, one of the main distinguishing characteristics of different types of health care systems. Finally, health care should be of major interest to political scientists because it constitutes a central part of the modern welfare state. That is why health care, as other parts of the welfare state, is confronted with new and drastic challenges because of economic, social and demographic changes, which Western societies have experienced during recent decades. As pointed out, one effect of these changes is that the general demand for health care services has increased, while public resources for providing them have become more limited. Together with the high sensitivity for technological and medical innovations, this situation poses a seemingly insolvable equation for the modern welfare state: it has to increase its ability to meet future demands for health care services for its citizens, while at the same time need, rather than the ability to pay, should determine access to services. How this dilemma is managed within different health care systems constitutes a fascinating object of study for comparative social policy and is the core of the questions raised in this work.
Consequently, the politics of health policy deserves a more prominent status in the understanding of welfare state restructuring. I will begin my analysis of this relatively neglected topic by defining the central term ‘health care policy’ as well as the terms ‘retrenchment’, ‘privatisation’ and ‘consumer choice’, which are of great importance within the context of health care reform, before I will discuss the methodological considerations and research strategy of my thesis.
My work’s focal point on the politics of health care is sharply distinguished from the system of social care, which focuses primarily on the elderly. Both topics have always been sharply separated in the discourses and institution-building in Germany over the past 150 years (Evers/Klein 2001). Moreover, social care has never been – in contrast to health care – subject to health insurance coverage. Nevertheless, it is not always easy to set clear boundaries between social care and health care.
Gray (2001: 219) states “[i]f health services are effective, it is possible to prevent or reduce (by curing it) the prevalence of a disease or to alleviate its burden by minimising the disability that disease causes. Increasing the level of effectiveness within a health service is governed by healthcare policy.” Following the author (2001), possible changes to health services that might be introduced through healthcare policy can be named:
- the delegation of responsibility for decision-making about the use of resources;
- increasing incentives to achieve better value for money;
- clarifying and strengthening accountability;
- improving performance against targets;
- improving patient care.
The beginning of the recent wave of interest in retrenchment can be attributed to Pierson’s (1995) influential book on welfare state reform in Britain and the United States, Dismantling the Welfare State? One main reason for its stunning effect is its precision about the dependent variable. “Retrenchment is one of those cases in which identifying what is to be explained is almost as difficult as formulating persuasive explanations for it.” (Pierson 1994: 17) Spending cuts alone do not fill the definition; furthermore, also structural reforms, which direct the welfare state toward a more “residual” function as the government contributes little to modify the income and service distribution in a progressive direction. Accordingly, retrenchment means “policy changes that either cut social expenditure, restructure welfare state programs to conform more closely to the residual welfare state model, or alter the political environment in ways that enhance the probability of such outcomes in the future” (ibid: 17). Pierson (1994) distinguishes in this context between “systemic retrenchment”, under which he understands long-term changes in the political environment – and “programmatic retrenchment”, immediate changes in programmes.
By privatisation, I mean “all kinds of policy initiatives, which transfer responsibility or organisational capacity from the public sector to actors outside of it” (Blomqvist 2004:140). This implies that privatisation also includes policies sometimes referred to as ‘market-orienting’, such as public contracting, vouchers and various types of market-like organisational arrangement within the public sector. Consumer choice refers to a situation where citizens are provided with a choice of different, publicly financed, service alternatives and can be linked to privatisation if private actors are allowed to compete for the favours of service users but can also, though less common, be restricted to a choice between public service providers only (ibid.).
“In one sense a discussion about theories and methods in comparative social policy is ‘about everything” – with regard to acts of comparing which are inherent in human behaviour. “In another sense, it may be said to be ‘about nothing’” ((Mabbett/Bolderson 1999: 34) – many of the issues surrounding the theories and methods in comparative research are not exclusive to cross-national studies, or to social policy; there is no distinct social science ‘cross-national method’. So, there is no standard way for categorizing and evaluating different health care systems. Health care systems are very complex, and each has its benefits and detractors. While access to a wide and more varied range of data than is provided by single country material is one of the main advantages of cross-national work, the non-equivalence of the data can be a major concern. The analysis of the role of political decision-making structures, government systems and bureaucracies is the domain of the institutionalist school in comparative social policy. Institutional arguments are ideally suited to the case-study technique because specifics of the organization of government are elevated to a central place in the analysis, and the argument is often historically contingent. Detailed policy studies can, nevertheless, yield generalizable theoretical insights (ibid.). However, the comparative methodology for the study of social policies of welfare states is accompanied by a certain degree to which methodological and conceptual problems are compounded once research crosses national borders (Clasen 1999). Potentially cross-national comparison can render important theoretical insights through theory development and testing. The problem is to ensure that the research is comparing ‘like with like’ (ibid.). For example, similar health services can belong to different administrative fields in different countries. A cross-national equivalence of welfare effort as measured by the statistical branches of international organisations cannot be assumed. “Comparing health care delivery systems is difficult under the best of circumstances.” (Mendoza/Henderson 1995 a: i) This difficulty is compounded when different standards and measures are used in comparisons. A health care system needs to be dissected into its various components so that aspects can be compared accordingly.
Contrary to the trend of grouping typologies, I will apply the county-specific case study. The case study approach allows the researcher to analyse country-specifically. Concepts are operationalized in case studies through exemplification (Mabbett/Bolderson 1999). In the context of comparative social policy, the characteristic of a case study approach is that the research examines the specific institutional, historical and political features of the prevailing social policies of countries, instead of imposing a standardizing framework whereby only pre-selected items of data are accepted for inclusion in the analysis (ibid.). The relationship between theory and observation in more interactive in this type of study than in those that use a standardizing methodology and attempt to test hypotheses. Several advantages result from the case study: a detailed analysis of national patterns becomes possible; the focus is on the complexity of the variation. Therefore, a first principle of this methodological approach is the examination of variations. The primary basis for selection of these empirical cases, Germany and Sweden, is variation with respect to the type of health care system, what will be discussed in the following paragraph. A second principle deals with the influence of context. Cuts or increases of the range of entitled persons or the scale of services can have different meanings in distinct national settings. Thirdly, this method provides advantages for the analysis of changes. Its forte lies in the interpretation of the diversity of specific cases as well as in its capacity to develop limited generalisations, which take the historic chronology as well as the specific context into consideration. The analysis’ starting point is an extensive understanding of current changes, which arouses the need for examining principles and basic elements of the prevailing national conditions. As Daly und Lewis (1998: 21) put it: “To be persuasive, accounts of welfare state transition must be able to comprehend continuity as well as change, diversity as well as similarity […] as one of a number of fault-lines along which welfare states operate and change.” Jones Finer (1999) also calls for a focus on individual countries with different principles and forms of social policy provision, which should consent to a more productive discussion on, and evaluation of, trends.
My analysis comprises empirical analyses of the countries Germany and Sweden with regard to their recent pattern and progress of health care reform. Obviously, the health care systems in the prevailing countries are in many ways unique, as are the formal political institutions which structure the policy-making processes in this area. It is decisive that both cases have distinct medical financing arrangements, whose diversity is decisively determined by the state administrations (Anttonen/Sipilä 1996): Germany and Sweden represent the two main types of health care systems in Europe, social insurance and national health services. Social insurance systems’, also labelled “multi-payer systems”, main characteristic – the health insurance – is provided through a plurality of publicly regulated, non-profit insurers, so called sickness funds, financed by payroll contributions. National health services, also classified as “single-payer systems” (Hacker 2004), provide most health care services directly through the state and fund by general taxation (Blomqvist 2002). Health care systems are further characterized by ownership. Social insurance systems are marked by a mixed public-private ownership of facilities, with entrepreneurial physicians paid according to services provided. They generally create the greatest diversity of coverage, segmented by region, occupation or workplace, across citizens; and, in some cases, even exclude wealthier citizens from statutory protection, who are expected to buy into the public system or insure themselves. National health services have predominantly public ownership of health care facilities, with a salaried medical profession and universal coverage. In public-ownership systems, too, a significantly larger share of spending is usually governmental than in mixed-ownership systems. In Western Europe, social insurance systems predominate in the centre (the Benelux countries, France, Germany and Austria) and national health systems predominate in the North, South and West (Denmark, Sweden and the United Kingdom, Spain, Portugal, Italy and Greece) (Blomqvist 2002). The diverse patterns loosely correspond to Esping-Anderson’s (1990) more general clustering of welfare states as ‘corporatist’ and ‘social democratic’ respectively. In neither of these systems has the market previously played a large role. Health care services were either provided by primarily non-profit medical providers, who were completely compensated for their services and were confronted with little or no competition, in the case of social insurance systems; or through the public sector, in the case of tax-based systems. During the period examined, Germany and Sweden have faced considerable cost pressures, which they tried to react to with introducing reforms. Perhaps most importantly, the changes that have taken place in the two countries’ medical financing structures have differed noticeably.
However, the categorisation as systems implies clusters of typical characteristics, as actual systems are approximations to ideal types: no pure form exists, rather all contemporary health systems are mixed. The ideal typical clustering leads to a relatively broad variation range between the countries in each cluster. Moreover, any simple analysis can only be a picture while health systems have been in a state of flux during the 1970s, 1980s and 1990s. “Health systems are dynamic systems, continually adapting and readapting to the wider political, economic and social systems of which they are a part.” (Freeman 1999: 89) This implies that the state activities in the context of health care are extraordinarily difficult to define, at least in categories for cross-country comparisons. The changing nature of health care institutions suggests that a system’s special quality is not solely its internal structure, the composition of functional subsystems of finance, delivery and regulation for the example of health care, but also its interaction with its environment, that is the subsystems’ embeddedness in the economic and political systems of the prevailing country. The idea that the health care state, at least in Western Europe, has three ‘faces’ depicts the given association: the health care state is not only a welfare state but also a capitalist industrial state and a pluralist democratic state (ibid.).
From the perspective of the standard comparative research method, the choice of Germany and Sweden presents a ‘method of agreement’ case selection. This method seeks to explain a similar outcome – in my case the relative success in cost containment in the health care sector – of countries, which are as different as possible (Skocpol and Somers 1998). Examples of differences between the cases are, as already pointed out, the varying institutional trajectories with respect to the organisation of health care systems, as well as welfare policies more broadly considered. However, according to the method of agreement, one similarity, which both cases share, is the decisive factor, as this common variable is crucial for the relevant similar outcome. This method is problematic with regard to the possibility of ‘equifinality’. This means that there are different ways, which might lead to a similar outcome; not necessarily, a common reason/variable has to exist, so that the search for a common factor would no longer be necessary. Furthermore, the method of agreement is obviously based on an ideal-typical notion: one independent variable, which is a crucial factor in both countries, explains the dependent variable, the phenomenon of a similar outcome. But even if the structures are quite different in both cases, it is more realistic that several causes lead to a similar outcome, above all in macro-sociological questions. With regard to the problematic nature of the method of agreement, I turn away from a strict comparison of two countries and rather choose the method of testing hypotheses of three theoretical approaches – path dependence, convergence theory and Hacker’s (2004 b) model of modes of policy change – depicted in detail in the theoretical chapter. The two cases, Germany and Sweden, shall function as tools to identify, which thesis can explain the development in the health care sector of these two countries. Two sorts of evidence shall support my argumentation: firstly a more detailed investigation of recent policy developments in Germany and Sweden and secondly basic statistics on the health care sector, which mainly derive from the OECD Health Data Base (2004)
For the comparison of the two countries, I chose a prevailing similar structure. The work begins by an introductory examination of the pressures to control costs that both countries have faced. It then explores the roots and character of the countries’ policies. This brief history-based analysis of the complexity and diversity of the health care patterns is important for a better understanding of the development of health care services and the way they operate in their national contexts. Moreover, the structure of the system as such influences the developing of reform solutions. In the second subchapter, I will analyse the context of the welfare society in question on the basis of the discussion of dynamics and effects of reforms in the health car sector. The third chapter deals with the comparison of the two countries, which shall exceed the dimensions of the preceding chapters. Finally, in the conclusion, I will estimate, which theory can explain best the development in the health care sectors of Germany and Sweden. The focus of this work is on analysing if recently there has been a tendency towards convergence in German and Swedish health care or if rather, according to the theory of path dependence, the two countries still follow their distinct policy paths or if the scenarios of Hacker’s (2004b) framework of modes of policy change offer a valid explanation for Germany’s and Sweden’s recent health care policy and reform. The main questions are: Have political and market actors altered the major institutions of the prevailing health care state – and if so how – or do we rather deal with small-scale reforms? Which consequences do the carried out reforms imply? An evaluation will be given if the reform measures have been successful or failed with regard to the restructuring process of the welfare state, which aims at cost containment and is at the same time characterised by a strong adherence to equity.
Over the years, the provision of health care has been exposed – more or less – to changes, which have exceeded national boundaries; and while the goals of national welfare provision are similar, the structures differ starkly. Does modernisation in this context have to be interpreted as a relatively uniform, global process, in which course traditions are broken and societies become more and more alike – with reference to Parsons (1971) – not only with regard to their economies, but also to their institutional structures? Or shall we rather assume, with reference to Eisenstadt (1979), Rokkan (2000), Therborn (2000) and Pierson (2001), that modern societies develop path-dependently? Hence, historically differing institutional traditions have evolved in various societies. A “methodological gulf” (Mabbett/Bolderson 1999: 49) appears between supporters of the view that globalisation will entail (downward) convergence on welfare states, and those scholars who hold the view that distinctive national solutions remain possible.
The question if the welfare state has continued to offer the comprehensive social protection that characterized its objectives and functioning in the immediate decades after World War II arises an affirmative answer from scientists, whose best known representative might be Paul Pierson. As Pierson (1996) states in the influential work “The New Politics of the Welfare State”: despite the welfare state faces economic hardship due to social transformation, an examination of actual policy indicates that these burdens have not produced fundamental shifts. A wide spectrum of research has largely consented to this assessment (Taylor-Gooby 1999 ; Esping-Andersen 1996; Pierson 2001). According to this position, welfare states are under tension and as a consequence cutbacks have taken place, but social policy frameworks remain fixed as they are secured by their continuing popularity and influential electorates.
As institutions generate interests, as well as being generated by them, different institutional arrangements for health care may be in part the result of pluralist, competitive politics, but they also structure subsequent competition (Freeman 1999). Increasing access to health care meant initiating new and specific policy competences for national governments, for example, as well as organizational interests such as sickness funds and health authorities, on whom the administration of policy depends. Decision-making is formed by institutions and interests which themselves were formed by previous decisions: In this respect Pierson (1995, 1996, 2001) refers to the possibilities of politicians, which are limited by institutional and programmatic patterns of the past. Hence, patterns of policymaking can be described as ‘path dependent’: institutions and interests are ‘confined’ to the system of which they form part. Deviations are only gradually possible and succeed only very seldom, so that the path can hardly be substituted completely. The results are restricted options for acting, which further stabilise the path. In this context, Pierson (1995, 1996) distinguishes between structural reforms and programmatic reforms. The former imply reforming the system by changing its structures. They are substantial reforms, which cannot be cancelled and therefore have a sustainable effect on the development of the welfare state. Structural reforms are opposed to programmatic reforms, which only contain cuts of single programmes.
Moreover, cuts of welfare provision cause blame avoidance; when a broad range of persons is affected by large-scale cutbacks, there is the danger that constituencies will punish responsible parties . Consequently, governments are forced to choose reforms, which will not lead to voting out. This problem might be overcome when a new treaty contains the consent of all parties. However, unification depends on which actors are the contracting parties. For Central and Northern Europe, unions and labour parties keep a central role in the reform process (Ebbinghaus/Hassel 2000). Furthermore, due to the complicated nature of welfare state restructuring and the fact that cuts of provision bear enormous risks for being re-elected, it is preferred to introduce reforms slowly and step-by-step, an observable fact called ‘inertia’ (Pierson 1995, 1996).
The hypothesis for the theory of path dependence can be formulated in the following way: despite welfare states face economic hardship due to social transformation, and as a consequence cutbacks have taken place, policy change in the field of health care is only possible within a restricted scope as policies and institutions have developed an own dynamic, which fixes and even reinforces the existing framework of a country’s health care system, as the status quo is secured by continuing popularity and influential electorates.
The central claim of the convergence argument is that high welfare expenditures cause higher labour costs, which result in lower profitability and the economic crisis, caused by capital migration, requires reform. Different countries, distinguished by diverse organisation and financing of health provision, seem to follow common health policy objectives, such as adequacy and equity in access, efficiency at macro and micro levels, freedom of choice for consumers and autonomy for providers (Freeman 1999). However, the main goal behind the reforms was to make existing health care systems more cost efficient and gain greater control over how public resources were spent within them (Blomqvist 2002).
Despite specific organisational features arising from different political, economic and social structures of the respective individual countries, different systems show a high degree of functional shared aims (Mabbett/Bolderson: 1999). The supposed scenarios for welfare statism could be summarized as a ‘choice’ between two opposing versions of convergence . From a traditional European – and especially EU – perspective, convergence has meant harmonization (either up- or downwards, but preferably upwards) between European social policy regimes, in the interests of community building on a continental scale. Whereas for the forecasters of a globalised post-modern world order, there can be only one direction for convergence: downwards, on world scale (Jones Finer 1999). Questions are raised under what conditions policy makers in different countries will orient policies in new and similar directions, thus breaking away from pre-established policy legacies. Nonetheless, arguments about convergence are still controversial among comparative policy analysts, since they seem to challenge insights about the role of national institutions in policy-making, which are classified as stable arrangements.
 Social rights are entitlements to social protection by virtue of citizenship and/or occupation; and/or contribution record; and/or proof of need according to non-arbitrary criteria (Jones Finer 1999: 17).
 For the definition of ‘structural reforms’ see the chapter ‘Theoretical Background’.
 The German system is more similar to that of the Netherlands and Belgium than to the French or Swiss. The Swedish health care system is quite similar to those of the other Scandinavian countries but differs in some important aspects from tax-based systems in the UK and Ireland and, even more so, from systems of the Mediterranean (Blomqvist 2002).
 Taylor-Gooby (1999) examines the two contrasting views of Pierson’s (1995, 1996) inertia concept (see below) and Esping-Andersen’s legacy claim (1990, 1996), the latter established the term ‘frozen welfare landscape’: the reform process follows the regime logic. The prospect of failing of European welfare states is stated – due to the path dependency of the regimes, the welfare states are no longer adapted to changing conditions of the society. Consequently, Europe presents a dead end with regard to the concept of welfare states. However, the national adaptation arguments are based primarily on cases via country studies and therefore have been criticized for being relatively susceptible to be weak on theoretical insights.
 A historical event, such as political change, might function as a chance for broader change.
 This phenomenon is in turn determined by differences in the organisation and political capacities of constituencies.