ABSTRACT
The Social Democratic literature distinguishes welfare systems according to the degree to which benefits are related to wage labor, which class bears the brunt of the cost of these benefits, and the degree to which benefits usurp business prerogatives in the labor and capital markets. The process of policymaking, therefore, is a process of embedding the balance of class power within the structure of the state. The balance of class power outside the state is institutionalized in the form of biases in those structures of the state, and it is this institutionalized bias that has a direct impact on the shape of welfare reform. Before welfare reform, the dominant economic classes in Britain, Sweden, and Germany were relatively successful in transforming economic power into political powers. The foregoing analysis also speaks to the theoretical debates among the Social Democratic, state-centered, and neo-Marxist perspectives regarding the causes of welfare state development.
