Abstract
This article argues that explaining institutional differentiation requires the incorporation of public preferences and understandings into accounts of state development. Using primary evidence concerning policy discussions and public opinion, it suggests that culture determined the specific features of both the British National Health Service Act of 1946 and the American Medicare Act of 1965, as well as the differences between them. Examining the interaction of institutions and culture inserts democratic standards into the top-heavy Weberian discussions of state autonomy and accounts for the seemingly inexplicable failure of policymakers to ensure cost control over the new health programs.