To Reform or Not to Reform? Exploring the Conditions for Successful Welfare Policy Reform through a Comparison of Pension Reform and Sick Pay Inertia in Norway

Differential reform capacity in different policy areas of the welfare state is a largely unexplored area of research. Here we try to explain the puzzling difference between the contemporary dynamics of pension policy and sick-pay policy in Norway.  Despite persistent concerns about soaring sickness absence rates, the basic structure of the generous sickness insurance has remained nearly unchanged since 1978. This is despite several (failed) initiatives by successive governments to reform the incentive structure vis-à-vis both employers and individual employees. The case also deviates from general tendencies towards retrenchment elsewhere. In contrast, the pension system har undergone a fairly radical structural reform that promises to secure economic sustainability in the face of population ageing. The successful implementation of the pension reform is surprising in its own right as it has been enacted despite comparatively weak reform pressures and without the psychological boost from an acute economic crisis.

In order to explain these differential outcomes we need to look beyond traditional power mobilisation theory and Paul Pierson’s New Politics thesis since both tend to generalise across welfare policy areas. Instead we will try to make sense of the observed divergence by exploring three theoretical perspectives: 1. A rational decision perspective that focuses on differences in the strategic game between the social partners and the political parties. 2. An institutional perspective that emphasises differences in the existing social insurance schemes and their inbuilt institutional logic. 3. A discursive perspective that draws attention to differences in the framing of the reform debate.