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Abstract In mainstream welfare state theory the new institutional approach has explained incremental changes as institutions gradually adjust at the margin. However, big and sudden changes remain outside the scope of this theory. The article uses the theory of punctuated equilibrium to argue that politics is characterized by long periods of stability followed by dramatic bursts of change. The theory is tested on policy data from 18 Western countries, 1971–2002. It confirms that the degree of non-incrementalism depends partly on the institutional friction in a country and partly on the type of welfare programme in question.
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