This chapter briefly sets the background for the comparative chapters by discussing the common challenges faced by the post‐war welfare state, beginning in the 1970s with the end of the Bretton Woods system and the two oil crises, followed by the increasing competition in the capital and product markets in the l980s and 1990s. It then goes on to outline the differences among welfare states that help explain the differential trajectories of adjustment, including the structure of the formal welfare state and the regulation of employment; the locus of responsibility for caring services – in the family, the state, and/or the market; the organization of the industrial relations through coordinated or uncoordinated bargaining systems; and the nature of economic and political governance institutions.
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