This book aims at understanding the impact of globalisation on social policies in small states. It comprises four in-depth case studies on the trajectories of welfare state restructuring in Austria, Denmark, New Zealand and Switzerland between 1970 and 2008. The focus is on four policy sectors: namely pensions, labour market policy, health care and family policy. The four countries represent different welfare regime types but share the similarity of being small states and thereby being inherently dependent on challenges of the world market and other external political-economic influences. The book is structured in six parts: a comprehensive introduction where the authors present their analytical framework which structures the case studies, the four country case studies, and a part which undertakes a cross-national comparison and examines the extent to which political factors can explain the trajectories.

The introduction depicts three alternative scenarios of adjustment processes in the advent of globalisation: business as usual (no welfare state convergence and domestic compensation as still a possible option), race to the bottom (convergence towards welfare state residualism) and falling between the first two scenarios (transformation to a supply-side orientation but no dismantling). A further assumption is that, besides socio-economic problem pressure, political factors determine the reform trajectories, in particular power resources, partisan complexion of governments, veto players, supranational influences and policy legacies. Here, the authors address the usual hypotheses of comparative public policy research and comparative welfare state literature. As a yardstick for the dependent variable, the policy change, the authors use Peter Hall's threefold classification of policy change.

The word restriction of this review does not allow sufficient appreciation of the four country studies. All four are excellent. They are rich in detail, historically informed, well structured and give an excellent overview of the reform trajectories in the four investigated policy sectors. Students and researchers who need a quick but thoughtful overview of the welfare states as well as the reform dynamics in small states cannot renounce on buying and reading this book. Patterns and driving forces of change are systematically reported. Furthermore, all four case studies follow the same structure. They start with a short summary of the political systems and the historical development of welfare states, and, then, in a chronological order, analyse the reform policies and the probable influence of the determinants of interest. In Austria, the Bismarckian welfare state has survived, and reforms mirror not only effects of socio-economic developments and the partisan complexion of government but are also strongly influenced by the EU accession (1995), which has triggered a supply-side orientation. The Danish incremental reform trajectory is marked by negotiation-based politics due to the strong tradition of social partnership and the dominance of minority governments. New Zealand is of the four countries the one with most radical policy change which the authors mainly explain by the partisan complexion of government. As is always the case in comparative politics, the Swiss case is the most difficult to handle. Between 1970s and today, the Swiss welfare state shifted from the liberal to the conservative model (although with liberal traits). Due to the specificities of the Swiss political system, this specific trajectory is less to be explained by partisan effects than by institutional determinants (direct democracy).

Instead of going into further details of the comprehensive case studies let us summarise the main and most interesting results of this project. First, the authors contend that the third scenario has taken place in the small states: welfare states have changed to a more supply-side orientation (most salient in labour market policy, family and pension policies) but they are far away from being dismantled. The second finding is that – cross-nationally – this change has not only been triggered by socio-economic problem pressure but also by political factors. Concerning the effects of these political factors, the most interesting results are as follows. The authors find evidence for negative feedback effects of past decisions and programme design (fiscal costs, non-wage labour costs). Furthermore, the shift towards supply-side-oriented economic policies is independent from party effects, but liberal and secular conservative parties have been more active in welfare retrenchment than left parties, with Christian Democrats in between. Eventually, there are also effects of political institutions. Interestingly, there are more short-term effects of institutions in New Zealand and more incremental effects in Switzerland, with Austria and Denmark located in between. The third finding is that globalisation is a real challenge for the four small states because strategies of compensation (and therewith the welfare state) became more difficult to sustain.

Alongside these great advantages and accomplishments of the book, which really make it worth reading, the volume has also some small weaknesses. The authors view the selected countries as most likely cases for welfare state change induced by globalisation. Because small states are particularly vulnerable, at first sight it seems likely that their welfare states are particularly challenged by economic liberalisation and internationalisation (efficiency hypothesis). However, de facto, according to the authors, the historical record shows the contrast: in spite of stark globalisation effects, the small states maintained their welfare state traditions. Although this argument is plausible, on the basis of the small state literature, theoretically the contrast could also be argued: due to their vulnerability, small states have developed compensation policies and stark social partnership traditions both of which counterbalance the external influences by public policies, protecting them from the world market risks. Following this argument, it is reasonable to argue that small states are most likely cases for welfare state resilience. In addition, in terms of methods it would have been of added value if the authors could have also integrated a large state, say France or Germany. This would have facilitated the description of the specific trajectory of small states more thoroughly. More importantly, however, the within-case methods as well as the comparative method are not systematically applied. It would have been valuable if the authors had been more explicit on this point, perhaps by applying process tracing in the case studies and a flexible mix of Mill's methods in the comparison (Mill, Reference Mill1874). Moreover, in the individual case studies the globalisation effect (as well as endogenous challenges) is not explicitly analysed. How we could measure such effects is not openly discussed, nor do the authors make arguments on how we are able to differentiate between domestic and external influences in welfare state reforms. In other words, it remains unclear how we know whether we observe domestic or external triggered change when we observe change. Therewith, the reader would also have appreciated it if the book discussed more systematically the effect of European economic integration. Because New Zealand and Switzerland, two non-EU member states, are included, variance concerning the effect of this factor could have been given. Eventually, at the very end of the book the authors contend that ‘due to their small number of decision-makers and the resulting lower decision-making costs’ (p. 245) small states may react somewhat faster than large states to challenges. Against the background of the Swiss experience of Langsamkeit (slowness), this argument seems to be contradictory. Last but not least, it is a pity that the book does not discuss the effect of ideas and changing employers’ constellations and labour relations. Against the background of the great expertise the authors have, this gap could have been avoided. Discussing the effect of these factors would have broadened and refined the standard comparative public policy perspective.

In sum, the book offers significant lessons on transformation of the welfare state in small states. It is extremely valuable for teaching, having the potential to become a bible in welfare state courses for the next decade. The book is of interest not only because of the detailed country studies it contains but also because it shows how political factors matter. It makes clear why political science is indispensable in comparative welfare state research. Academically, the volume produces new questions which further research has to address − I do not view this as a deficiency, but as a great benefit of the book.