The German social democratic party initiated in 2003 the greatest overhaul of labour market legislation in decades, severely cutting unemployment benefits and slashing employment protection legislation. How can we explain this radical policy shift? This paper will present a counter-intuitive...

The New Politics of the welfare state suggests that periods of welfare retrenchment present policy-makers with a qualitatively different set of challenges and electoral incentives compared to periods of welfare expansion. An unresolved puzzle for this literature is the relative electoral success...