In the era of "activation," which is characterized by the decentralization and individualization of social services, welfare caseworkers play an increasingly important role in shaping the policy outcomes of the welfare state. In this article, it is argued that to theoretically accommodate the complex institutional and systemic environments in which today’s caseworkers operate, the street-level bureaucracy approach introduced by Lipsky should be married with institutionalist theory, thereby laying the groundwork for a micro-institutionalist theory of policy implementation.