Since the early 1990s, European welfare states have undergone substantial changes. Traditional programmes, such as old age pensions have been curtailed. Cost-containment measures have been adopted also in other parts of the welfare state, ranging from health care services to invalidity benefits. At the same time, today's welfare states have taken up some new functions. They are expected to help and/or push non-working people back into employment, to complement work income for the working poor, to help parents reconcile work and family life, to promote gender equality, to support child development, and to provide social services for an ageing society. This book provides a thorough empirical account of these developments in western Europe. It also discusses a number of interpretations that have been put forward in relation to the transformation process, in particular whether change amounts to retrenchment, dualisation, or whether it is better captured by the notion of a reorientation towards an active, social investment-based welfare state. On the theoretical level the book focuses on the drivers of the transformation process. It does so on the basis of a multidimensional understanding of social policies, and highlights the importance of political competition and policy learning processes as explanatory factors for the emergence of a new welfare settlement.