World Economy and International Relations

The development of the South European welfare state has raised several questions regarding the transformation and viability of its defining features in the new millennium. Where do the incentives for change come from? What are the obstacles and opportunities for change? The key issues concern the stability of welfare institutions, the resilience of welfare policy legacies, such as familialism, and the constellation of actors involved in the processes of continuity and change. This article examines the challenges faced by the South European welfare state and argues that after the global economic crisis of 2007–2011 South European countries continue to share the main characteristic of very weak welfare capitalism, although Greece, Italy, Portugal and Spain have undertaken divergent paths to cope with the political economy of austerity. In addition, the article suggests that prospects for Europeanization are dwarfed by the fact that national actors use EU constraints and opportunities in the field of social policy either to strengthen their legitimization, amplify their room for manoeuvre or expand their power. Hence policy reforms reflect the timing, the constellation of actors and the political and social conflicts that prevail in each country. By ‘bringing politics back in’ this article departs from mainstream research on South European welfare policy change where institutions are typically anthropomorphised and treated as coherent actors in the policy process. The article contributes to the literature by offering a sounder explanation that includes the role of political entrepreneurs as a crucial analytical aspect in understanding variations in welfare state patterns in Southern Europe.