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A Long Goodbye to Bismarck? CHANGING WELFARE STATES

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A Long Goodbye to Bismarck? CHANGING WELFARE STATES Bruno Palier (ed.) A Long Goodbye to Bismarck? The Politics of Welfare Reform changing welfare changing welfare states in Continental Europe Amsterdam University Press a long goodbye to bismarck? CHANGING WELFARE STATES Advanced welfare states seem remarkably stable at fi rst glance. Although most member states of the European Union (EU) have undertaken compre- hensive welfare reform, especially since the 1990s, much comparative wel- fare state analysis portrays a ‘frozen welfare landscape’. Social spending is stable. However, if we interpret the welfare state as more than aggregate so- cial spending and look at long-term trends, we can see profound transfor- mations across several policy areas, ranging from labor market policy and regulation, industrial relations, social protection, social services like child care and education, pensions, and long-term care. Th is series is about tra- jectories of change. Have there been path-breaking welfare innovations or simply attempts at political reconsolidation? What new policies have been added, and with what consequences for competitiveness, employment, in- come equality and poverty, gender relations, human capital formation, and fi scal sustainability? What is the role of the European Union in shaping na- tional welfare state reform? Are advanced welfare states moving in a similar or even convergent direction, or are they embarking on ever more divergent trajectories of change? Th ese issues raise fundamental questions about the politics of reform. If policy-makers do engage in major reforms (despite the numerous institutional, political and policy obstacles), what factors enable them to do so? While the overriding objective of the series is to trace tra- jectories of contemporary welfare state reform, the editors also invite the submission of manuscripts which focus on theorizing institutional change in the social policy arena. editors of the series Gøsta Esping-Andersen, University of Pompeu Fabra, Barcelona, Spain Anton Hemerijck, VU University Amsterdam, the Netherlands Kees van Kersbergen, VU University Amsterdam, the Netherlands Kimberly Morgan, George Washington University, Washington, USA Romke van der Veen, Erasmus University, Rotterdam, the Netherlands Jelle Visser, University of Amsterdam, the Netherlands A Long Goodbye to Bismarck? The Politics of Welfare Reforms in Continental Europe Bruno Palier (ed.) Cover illustration: Sir John Tenniel ‘Dropping the Pilot’ in Punch March 29, 1890, pp. 150-51 Note on the cover illustration, by Stephan Leibfried : ‘Dropping the Pilot’ is a political cartoon published in the British satiri- cal magazine Punch on March 29, 1890, a week after Kaiser Wilhelm II dismissed Bismarck. This iconic cartoon by Sir John Tenniel (1820-1914) shows a uniformed and capriciously crowned Kaiser (1869-1941) watch- ing contentedly from the guard rail of the royal yacht, as Bismarck – de facto captain of the German ship of state – disembarks in his civilian clothes. Founder of the German Empire in 1871, Bismarck (1815-1898) not only built the first unified German state, but was also the architect of the world’s first modern welfare state. Cover design: Jaak Crasborn bno, Valkenburg a/d Geul Layout: V3-Services, Baarn isbn 978 90 8964 234 9 e-isbn 978 90 4851 245 4 nur 754 © Bruno Palier / Amsterdam University Press, Amsterdam 2010 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (elec- tronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book. Table of Contents Acknowledgements 9 Prologue: What Does it Mean to Break with Bismarck? 11 Gøsta Esping-Andersen 1 Ordering change: Understanding the ‘Bismarckian’ Welfare Reform Trajectory 19 Bruno Palier 1.1 Introduction 19 1.2 A Historical Institutionalist Framework for Analysis 21 1.3 Bismarckian Welfare Systems as they Were 35 2 A Social Insurance State Withers Away. Welfare State Reforms in Germany – Or: Attempts to Turn Around in a Cul-de-Sac 45 Karl Hinrichs 2.1 Introduction 45 2.2 The German Social Insurance State as we Knew it 47 2.3 A Sequential Reform Trajectory 51 2.4 The Consequences of Maneuvering out of the Cul-de-Sac 64 2.5 The Bumpy Road out of the Reform Blockade: How was it Possible? 68 2.6 Conclusion 70 3 The Dualizations of the French Welfare System 73 Bruno Palier 3.1 Introduction 73 3.2 The Institutional Arrangements Reflecting the Post-War Compromises 74 3.3 The French Reform Trajectory 77 3.4 Conclusion: Dualisms in the French Welfare System 96 4 Janus-Faced Developments in a Prototypical Bismarckian Welfare State: Welfare Reforms in Austria since the 1970s 101 Herbert Obinger and Emmerich Tálos 4.1 Introduction 101 4.2 How Bismarckian was the Austrian Welfare State? 102 4.3 Welfare State Change since the 1970s: Reform Sequences 104 4.4 Bismarck is Dead. Long Live Bismarck 120 5 Continental Welfare at a Crossroads: The Choice between Activation and Minimum Income Protection in Belgium and the Netherlands 129 Anton Hemerijck and Ive Marx 5.1 Introduction 129 5.2 The Dutch Miracle Revisited 131 5.3 Belgium’s Reluctant and Erratic Path towards Activation 139 5.4 Path-Dependent Policy Divergence across Small Continental Welfare Regimes 145 5.5 Explaining within Regime Policy Divergence 152 6 Italy: An Uncompleted Departure from Bismarck 157 Matteo Jessoula and Tiziana Alti 6.1 Introduction 157 6.2 A Bismarckian Route... With a First Departure 158 6.3 Departing from the Bismarckian Compromise: A Stepwise Process of Reform 161 6.4 Towards the End of the Bismarckian Compromise 177 6.5 Conclusions 179 7 Defrosting the Spanish Welfare State: The Weight of Conservative Components 183 Ana Guillén 7.1 Introduction 183 7.2 The Point of Departure: The Spanish Welfare State in the Late 1970s 185 7.3 Reforming Social Protection in the Last Three Decades 189 7.4 Explaining the Spanish Trajectory of Reform 202 7.5 Conclusions 205 TABLE OF CONTENTS 8 Reform Opportunities in a Bismarckian Latecomer: Restructuring the Swiss Welfare State 207 Silja Häusermann 8.1 Introduction 207 8.2 Welfare State Growth in a Context of Institutional Power Fragmentation 210 8.3 Endogenous and Exogenous Challenges to the Swiss Welfare System 215 8.4 Reform Dynamics since the 1980s along Two Dimensions 218 8.5 Conclusion: The Politics Linking Modernization and Cost Containment 229 9 The Politics of Social Security Reforms in the Czech Republic, Hungary, Poland and Slovakia 233 Alfio Cerami 9.1 Introduction 233 9.2 The Period before 1945 235 9.3 The Period from 1945 to 1989 237 9.4 The Period from 1989 onwards 241 9.5 Policy Discourses and International Organizations 248 9.6 Conclusion 250 10 Reforming Bismarckian Corporatism: The Changing Role of Social Partnership in Continental Europe 255 Bernhard Ebbinghaus 10.1 Introduction 255 10.2 The Role of Social Partners in Welfare System Theories 257 10.3 Social Governance in Bismarckian Welfare Systems 261 10.4 Social Governance in Bismarckian Pension Systems 264 10.5 Social Governance in Bismarckian Labor Market Policies 270 10.6 Conclusion: Towards Reforming Governance 276 11 Trajectories of Fiscal Adjustment in Bismarckian Welfare Systems 279 Philip Manow 11.1 Introduction 279 11.2 Revenue, Debt, Expenditures 281 11.3 Dilemmatic Policy Choices 287 11.4 Taxes versus Social Insurance Contributions – French and German Experiences 292 11.5 Conclusion 297 TABLE OF CONTENTS 12 Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms 301 Anton Hemerijck and Werner Eichhorst 12.1 The Adaptive Capacity of the Continental Welfare State 301 12.2 The Continental Employment Dilemma 305 12.3 Reconciling Welfare with Work: A Sequence of Intense Reforms 313 12.4 An Unfinished Social Reform Agenda for Bismarckian Countries 323 12.5 Conclusion 331 13 The Long Conservative Corporatist Road to Welfare Reforms 333 Bruno Palier 13.1 Introduction 333 13.2 How did Continental European Welfare System Change? The Commonalities of the Typical Bismarckian Reform Trajectory 335 13.3 How to Explain the Bismarckian Welfare Reform Trajectory? 362 13.4 What have the Bismarckian Welfare Systems Become? 374 13.5 What are the Main Economic and Social Consequences of the Welfare Reform Trajectory? 380 13.6 The Crisis and Beyond 385 Notes 389 Bibliography 403 About the Contributors 439 Index 443 TABLE OF CONTENTS Acknowledgments As shown in this book, the Conservative corporatist road to welfare re- forms was long and difficult. The journey to the completion of this book was also long and consisted of many phases. It started in Paris in Decem- ber 2005, where the team of authors first met, before going to Harvard in 2006, where our first drafts were intensely discussed, and then back to Paris in 2007 and 2008, where chapters were harmonized. For me, it also passed via Berlin, Chicago and other conference locations in 2008, where the results were tested, and finally Stockholm in 2009, where final editing and writing was undertaken. The journey was long but much less difficult than the ‘Bismarckian ’ welfare trajectory itself, thanks to the considerable and generous support we received from various institutions, and thanks to interested colleagues and their inspirational ideas . Many institutions provided us with both financial and organization- al help: the French Ministry of Social Affairs (DREES-MIRE), Sciences po (Direction scientifique, Cevipof and Centre d’Études Européennes), the EU -funded Networks of Excellence CONNEX and RECWOWE, the Friedrich Ebert Stifftung, the Fondation Jean Jaurès and the Harvard Cen- ter for European Studies. In the various phases of our project, we benefited enormously from the remarks and input of many scholars, whose feedback always had construc- tive consequences for the following stage of our project.
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