The Politics of Welfare State Reform in the Netherlands: Explaining a Never-Ending Puzzle

The Dutch welfare state has always posed analytical and empirical puzzles, since existing theories cannot adequately explain the characteristic features of its welfare regime (especially its paternalism and generosity). We discuss two interconnected puzzles about Dutch welfare state development and propose solutions. First, we show that the Dutch exceptionalism is partly an artefact of mainstream typologies that confuse ideal and real types. We resolve this problem and characterize the Dutch welfare state as a very generous welfare system with strong but decreasing paternalist features. This is important because one can expect that reform, especially of generosity, involves a high potential for electoral backlash. Empirically, we observe that some Dutch coalition governments were very reluctant reformers, while others confronted the voters head-on in their attempts to restructure the welfare state's generosity. How to explain this puzzle? We propose an approach to risky welfare state reform that is rooted in prospect theory and that can explain the cross-government variation in reform.