The transformation of night-watchman states into insurance states is one of themost notable societal developments in recent history. In 1880, not a singlecountry had a nationally compulsory social policy program. A few decades later,every single one of today's rich democracies had adopted programscovering all or almost all of the main risks people face: old age, sickness,accident, and unemployment. These programs rapidly expanded in terms of range(number and types of risks covered), reach (number of people covered), andresources (money spent). Today, all rich democracies cover all main risks for avast majority of citizens with binding public or mandatory private programs.Three main aspects of this transformation are particularly fascinating: thetrend (the transformation to insurance states happened in all rich democracies),differences across countries (the generosity of social policy varies greatlyacross countries), and the dynamics of the process.

Concerning the trend, Figure 1.1 shows the development of socialpolicy in terms of range, reach, and resources. What explains this meteoric risein all the rich democracies? How can we understand their fundamentaltransformation from night-watchman states into insurance states? Regardingdifferences across countries, Figure 1.2 presents twomeasures of welfare state generosity: total social expenditure as a percentageof GDP and the average percentage of benefits in case of unemployment(replacement rates). Why does Sweden spend almost twice as much of its nationalwealth on social policy as the United States? Why is the benefit for anunemployed worker in Switzerland almost 80 percent of her previous wage, whileit is less than 50 percent in Ireland? Why does welfare state generosity varyacross countries? With respect to dynamics, why and when didsocial policy emerge? What conditions led to expansion? What conditions led toretrenchment? What explains the timing of social policy milestones?

Existing Approaches

The large welfare state literature offers a variety of explanations for socialpolicy provision in general, and the questions of trend, differences, anddynamics in particular. Let me distinguish three broad approaches to makingsense of the enormous scale and cross-national diversity of social insuranceprovision: functionalist, antagonistic, and cross-class approaches.