Understanding long-term care (LTC) reform is at the core of the study of European social policy. Particularly important are the effects of regional devolution on the development of LTC services, being one of the few areas only subject to limited welfare retrenchment. One important question is the extent to which a devolved system of welfare governance influences the process of welfare reform as well as the degree of diversity in the provision and financing of LTC. The article draws upon evidence from Italy and Spain, two 'Latin Rim' countries, both of which have faced similar demands over the last twenty years for reform of systems with limited entitlement to long-term care. It argues that when there is a latent demand for reform, welfare devolution does not inhibit reform when fiscal blame-avoidance opportunities arise at the central government level. Furthermore, we examine the extent to which devolution leads to increasing fragmentation and diversity. The article's findings indicate that by diffusing policy responsibilities, devolution has enhanced LTC reform and reduced pre-existing welfare fragmentation in Spain. In contrast, the lack of countrywide reform in Italy is explained by the absence of political opportunities for the diffusion of the fiscal blame that has frustrated attempts to reform the existing national cash allowanc
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