Why did pro-welfare Social Democrats and Christian Democrats cease to support the welfare state in the 1980s and 1990s, and support measures such as tighter welfare programme conditionality rules and lower social security benefits instead? Building on the party position change literature, I argue and empirically demonstrate that parties with an activist-dominated party organization adapt their position to shifts in the party voter position. Parties with a leadership-dominated party organization adapt their position to shifts in the median voter position. Parties in which neither leaders nor activists dictate party policy shift in the opposite direction of the previous policy shift if they are excluded from office. Using a cross-sectional time-series regression analysis of 181 position shifts of European Socialist, Social Democratic and Christian Democratic parties in the period 1977–2003, I find strong evidence that party organization is a crucial mediating variable in explaining when these parties shift to the right or left. Demonstrating that differences in party organizations motivate parties to respond to different incentives, this study has implications for the relationship between party behaviour and welfare state policy-making.