governments able to impose the heaviest losses on program beneficiaries were often not those
able to enact the most dramatic and costly investments in long-term fiscal sustainability.
Moreover, in explaining reform choices as intertemporal tradeoffs, we need to employ a causal
logic distinct from that typically used to explain reform as retrenchment.
To demonstrate the validity of this argument, I reanalyze a paired comparison from one
of the most influential studies of welfare-state reform: Paul Pierson’s Dismantling the Welfare
State? Reagan, Thatcher, and the Politics of Retrenchment (DWS). In this book, Pierson
compares and explains the differing patterns of success that Margaret Thatcher and Ronald
Reagan enjoyed in their respective efforts to cut back social programs.
the two countries’ records of reform in what Pierson calls a “core sector”: public pensions. In
DWS’s treatment of this policy field, the puzzle of policy change is: Why was Thatcher able to
enact state pension reforms in 1986 that were so much more dramatic than those Reagan achieved
in 1983? DWS employs as its measure of policy change the size of the losses that each imposed
on pension beneficiaries – implicitly a gauge of the shift in resource claims from retirees toward
contributors and taxpayers. According to this distributive yardstick, Reagan appears mired in the
status quo, able to win only modest and gradual cuts in public benefits, while Thatcher achieved
radical change, massively slashing benefits and privatizing much of the state system.
Studying the same two countries’ reform trajectories, I recast the puzzle of policy change
by asking to what degree their governments reshaped the intertemporal distribution of costs and
benefits. Facing a gathering problem of worsening demographic ratios, to what extent did
politicians in each context impose new short-term burdens on constituents to minimize social
costs over the long run? Viewed through a temporal lens, the puzzle of policy reform is reversed:
while Britain largely delayed the costs of population aging, the United States raised payroll taxes
and cut benefits in the near term, smoothing the impact of demographic change over time. In
4
Paul Pierson, Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment, (New
York: Cambridge University Press, 1994).
3
Convention