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Research Paper (postgraduate) from the year 2006 in the subject Politics - International Politics - Region: Western Europe, grade: 1, University of Zurich, language: English, abstract: A new impact to welfare state research was given by the crisis and the resulting, far-reaching changes during the past two decades. Not only the development and extension of the welfare state, but also the retrenchment became a topic of theorists and researchers. There exist a lot of explanations about the reasons of the crisis of the welfare state: globalization and the liberalization of the economy, heavily state-debts and the ageing society were some of the most dominant.In this paper, I'm not primary interested in the reasons of retrenchment. I'll focus on how they were realized. Which groups are interested in a smaller welfare state? How does retrenchment work on the political level? The paper discusses these questions on the basis of the situation in Sweden during the early 1990's. The analysis bases on an (rational choice orientated) historical institutionalism approach, stressing the effects of path dependency. The results show, that mainly market-liberal tended to favor retrenchment. But also the Social Democratic party was partly in favor for some reforms, having chosen a pragmatic strategy to defend the core of the Swedish welfare system. All in all, the economic crisis in the 90s changed the character of the Swedish welfare state. It lost a lot of its universalism, private sectors were introduced and "quasi-markets" established. Also the unemployment rate is still very high, compared with the ones before the crisis. Furthermore, the tendency of the welfare state seems to go into the direction of more costumer-choice - and thus more quasi-markets and private sectors.