In their book “Beyond Continuity: Institutional Change in Advanced Political Economies” Streeck and Thelen (2005: 1-33) identify types of gradual transformation:
1) Displacement refers to the ‘slow rising salience of subordinate relative dominant institutions’ or in layman’s terms to fact that dominant institutional arrangements are replaced by dominated institutional arrangements. The case in point was liberalisation of certain markets in the 1980s. Liberalism was already partly present but in many respects it was not the dominant institution and was only ‘activated’ in the 80s.
2) Layering refers to new elements attached to existing institutions gradually chaging their status and structure. The existing institional structure is not replaced but an additional institutional layer is added. For instance, social assistance in France in the 1980s was introduced in parallel to existing social security arrangements.
3) Drift entails the rising ineffectiveness of existing institutional arrangements as circumstances change and institutions are not actively maintained. As new social risks emerge with the onset of the post-industrial economy, existing welfare institutions may for example become inadequate.
4) Conversion describes a process whereby existing institutions are at least partly redeployed for new purposes. One example that comes to mind is the changing objective of unemployment benefits. Traditionally conceived as social insurance against a risk (unemployment), it is increasingly becoming a way to foster re-employment.
5) Exhaustion occurs when institutions contain the seeds of their destruction. The most prominent contender of this argument is Marx: the internal contradictions of capitalistic institutions will lead to their demise.