The Politics of Trade-Offs: Studying the Dynamics of Welfare State Reform with Conjoint Experiments

The main theories in welfare politics refer to public opinion as the key obstacle to welfare reform, because welfare state retrenchment is highly unpopular. Successful reforms therefore depend on carefully balanced package deals, so that people accept retrenchment, because they are compensated – within the same reform - on a different dimension. In other words: successful packages must present voters with trade-offs. But how do different groups of voters evaluate trade-offs? In other words: when are individuals willing to agree to welfare state reforms that contain elements they clearly reject? 

Studying such politics of trade-offs requires that we know the relative saliency of different reform elements for specific groups, something standard survey data does not provide. We introduce conjoint survey analysis as an appropriate tool, because it prompts respondents to choose between different policy packages and is therefore perfectly suited to examine individual preferences in the context of multi-dimensional reforms.

We present findings from a study of pension retrenchment reform in Switzerland. The analysis relies on data from an original survey experiment with 1’873 respondents, yielding over 18’000 single ratings of specific policy packages. We find that retrenchment can indeed be compensated by specific benefit expansions for relevant opposition groups. Further, ideology outperforms material self-interest as a predictor of the effectiveness of compensations.

Our findings imply that structural and institutional constraints do not prevent successful welfare reform, because agency and politics matter.