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Political attempts to reform existing policies often fail to bring about substantial change. When they succeed, the new policy is heavily influenced by the pre-existing policy path. This is confirmed by the story of Danish welfare reforms in the 1980s and 1990s, which can be explained in terms of their path dependency. In order to understand better the mechanisms of path dependency I draw on the fundamental insights of the new institutionalisms: rational choice institutionalism, historical institutionalism, and social constructivist institutionalism. The article begins with a brief presentation and comparison of the three new institutionalisms. It then discusses the dialectics of path shaping and path dependency before seeking to explicate the mechanisms of path dependency. Finally, the various accounts of path dependency are applied in an empirical study of the failure of welfare retrenchment in the 1980s and the relatively successful restructuring of the welfare state in the 1990s.