Since the collapse of the communist regimes of the Soviet Union and Yugoslavia, the welfare regimes in Central and Eastern Europe have been fundamentally transformed in accordance with the process of economic liberalization in these countries. However, the underlying factors behind the diverging paths and trajectories of post-communist welfare states have yet to be understood. Compiling a new dataset covering sixteen countries from 1996 to 2016, this thesis presents a quantitative analysis to explore the underpinnings of welfare state development in post-communist states. First, informed by the Quality of Government (QoG) theory, the empirical evidence shows that institutionalization of electoral democracy and good governance practices play a central role in ensuring welfare efforts. Second, this study suggests that budgetary deficits and low economic performance have a significant negative impact on the level of social spending, as the productive use of economic resources is prioritized in those developing economies. Finally, in contrast with power resource theory, the results of this thesis provide evidence that parliamentary party composition has no effect on social welfare outcomes in this particular context.