Cover Sanneke Kuipers 21-10-2005 11:41 Pagina 1 Sanneke Kuipers Sanneke Kuipers The Crisis Imperative Why do some welfare state crises trigger comprehensive reforms, while others subside without having exhibited Crisis Rhetoric and Welfare much effect? This book argues that crises are deliberately State Reform in Belgium and the constructed as an imperative for change. Under certain con- changing welfare states Netherlands in the Early 1990s ditions, crises can be a powerful weapon in the hands of change-oriented policymakers. The Crisis Imperative In the early 1990s, Belgium and the Netherlands were both characterized by a ‘welfare without work’ pathology, not unlike that found in many other continental welfare states at the time. When crisis rhetoric was applied in both countries, the results of the subsequent welfare state reforms were quite different in both their scope and breadth. The Crisis Imperative: Crisis Rhetoric and Welfare State Reform in Belgium and the Netherlands in the Early 1990s probes the rhetorical strategies and institutional structures of the two cases, and provides deeper insights into the factors that condition the success of a crisis imperative. Sanneke Kuipers is a postdoctoral research fellow at the Department of Public Administration of Leiden University in the Netherlands. ISBN 90 5356 808 5 www.aup.nl Amsterdam University Press Amsterdam University Press The Crisis Imperative 21-10-2005 15:04 Pagina 1 the crisis imperative The Crisis Imperative 21-10-2005 15:04 Pagina 2 CHANGING WELFARE STATES Processes of socio-economic change – individualising society and globalising eco- nomics and politics – cause large problems for modern welfare states. Welfare states, organised on the level of nation-states and built on one or the other form of national solidarity, are increasingly confronted with – for instance – fiscal prob- lems, difficulties to control costs, and the unintended use of welfare programs. Such problems – generally speaking – raise the issue of sustainability because they tend to undermine the legitimacy of the programs of the welfare state and in the end induce the necessity of change, be it the complete abolishment of programs, re- trenchment of programs, or attempts to preserve programs by modernising them. This series of studies on welfare states focuses on the changing institutions and programs of modern welfare states. These changes are the product of external pressures on welfare states, for example because of the economic and political con- sequences of globalisation or individualisation, or result from the internal, politi- cal or institutional dynamics of welfare arrangements. By studying the development of welfare state arrangements in different coun- tries, in different institutional contexts, or by comparing developments between countries or different types of welfare states, this series hopes to enlarge the body of knowledge on the functioning and development of welfare states and their pro- grams. editors of the series Gøsta Esping-Andersen, University of Pompeu Fabra, Barcelona, Spain Anton Hemerijck, the Netherlands Scientific Council for Government Policy (Wetenschappelijke Raad voor het Regeringsbeleid – wrr) Kees van Kersbergen, Free University Amsterdam, the Netherlands Jelle Visser, University of Amsterdam, the Netherlands Romke van der Veen, Erasmus University, Rotterdam, the Netherlands previously published Jelle Visser and Anton Hemerijck, A Dutch Miracle. Job Growth, Welfare Reform and Corporatism in the Netherlands, 1997 (isbn 90 5356 271 0) Christoffer Green-Pedersen, The Politics of Justification. Party Competition and Welfare-State Retrenchment in Denmark and the Netherlands from 1982 to 1998, 2002 (isbn 90 5356 590 6) Jan Høgelund, In Search of Effective Disability Policy. Comparing the Develop- ments and Outcomes of the Dutch and Danish Disability Policies, 2003 (isbn 90 5356 644 9) Maurizio Ferrera and Elisabetta Gualmini, Rescued by Europe? Social and Labour Market Reforms from Maastricht to Berlusconi, 2004 (isbn 90 5356 651 1) Uwe Becker and Herman Schwartz (eds.), Employment ‘Miracles’. A Critical Comparison of the Dutch, Scandinavian, Swiss, Australian and Irish Cases ver- sus Germany and the US, 2005 (isbn 90 5356 755 0) Martin Schludi, The Reform of Bismarckian Pension Systems. A Comparison of Pension Politics in Austria, France, Germany, Italy and Sweden, 2005 (isbn 90 5356 740 2) The Crisis Imperative 21-10-2005 15:04 Pagina 3 The Crisis Imperative Crisis Rhetoric and Welfare State Reform in Belgium and the Netherlands in the Early 1990s Sanneke Kuipers amsterdam university press The Crisis Imperative 21-10-2005 15:04 Pagina 4 The publication of this book is made possible with a grant from the gak Foundation (Stichting Instituut gak, Hilversum). Cover illustration: Joseph M. Turner, The Burning of the Houses of Parliament, 1834 Cover design: Jaak Crasborn bno, Valkenburg a/d Geul Layout: Adriaan de Jonge, Amsterdam isbn 90 5356 808 5 nur 754 © Amsterdam University Press, Amsterdam 2006 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 sys- tem, or transmitted, in any form or by any means (electronic, mechanical, photo- copying, recording or otherwise) without the written permission of both the copy- right owner and the author of the book. The Crisis Imperative 21-10-2005 15:04 Pagina 5 Contents Acknowledgments 7 1 The Crisis Imperative 9 1.1 Welfare State Crisis in the Lowlands 9 1.2 The Puzzle and Its Pieces 10 1.3 The Theoretical Argument 12 1.4 Analysis of Reform 13 1.5 Purpose, Relevance and Limitations 15 1.6 Book Plan 17 2 Crisis and Change 19 2.1 Introduction 19 2.2 Welfare State Change in Belgium and the Netherlands: A Tough Nut to Crack 20 2.3 An Alternative Explanation: Crises and Institutional Dynamics 27 2.4 Conclusion 35 3Comparing Social Security Crises:Design and Method 37 3.1 Introduction 37 3.2 Similar Institutional Structures 38 3.3 Differences 43 3.4 Similar Predicaments 45 3.5 Different Outcomes 47 4 “Nothing as Permanent as a Temporary Arrangement”: Belgian Policy Making on Unemployment Benefits 53 4.1 Introduction 53 4.2 The Challenges of Post-Industrialism in Belgium 55 4.3 Belgian Politics 57 4.4 Power in Practice: Social Partners 61 4.5 The Evolution of Social Security Policy 68 5 The Crisis Imperative 21-10-2005 15:04 Pagina 6 4.6 Policy Reactions to Adversity 72 4.7 Effects of Adjustments: Ever Deeper Trouble? 76 4.8 Conclusion 89 5 Global Pacts and Crisis Plans 91 5.1 Introduction 91 5.2 Contradictions and Crisis 93 5.3 Actors’ Resources and Venues 100 5.4 Institutional Obstacles to Change 106 5.5 Conclusion 114 6 The Sticky State and the Dutch Disease 119 6.1 Introduction 119 6.2 Post-Industrial Challenges to the Dutch Economy and Its Society 121 6.3 Politics in the Netherlands 122 6.4 The ‘Polder Model’: Industrial Relations and Socio-Economic Policy Making 126 6.5 The Runaway Social Security System 131 6.6 The Dutch Disease and Policy Remedies 135 6.7 Reforms Enforced, Contradictions Reinforced 137 6.8 Conclusion 145 7 Crisis Narratives and Sweeping Reforms 147 7.1 Introduction 147 7.2 From Incubation to Open Crisis 148 7.3 Access to Resources and Venues 163 7.4 Triggers and Change Agents 169 7.5 Conclusion 175 8 The Politics of Crisis Construction 179 8.1 Small Steps or Giant Leaps? 179 8.2 The Crisis Stratagem 180 8.3 Reform in Retrospect: Much Ado About Nothing? 186 8.4 On Balance 189 Notes 193 List of Abbreviations 207 List of Interview Respondents 211 Bibliography 215 Index 229 6 The Crisis Imperative 21-10-2005 15:04 Pagina 7 Acknowledgments This book began as a dissertation at Leiden University’s Department of Public Administration. Many people contributed to its completion as a dis- sertation, and further along the way to the significantly revised version here before you. Thank you! I owe special thanks to my supervisors and mentors in Leiden, Paul ’t Hart and Kees Goudswaard, who have provided me with invaluable support and inspiration. Arjen Boin was there from the start. In fact, he lured me into academia and has never let me down since, and I owe him for it. Romke van der Veen has been a constructive consultant and stim- ulating advisor. Jos Berghman provided encouragement and guidance in Belgium and generously introduced me to his wide network of contacts in Belgian politics and industrial relations. The Belgian case study would not have been possible without the help and hospitality of the colleagues at Leu- ven University, where Marleen Brans and Geert Bouckaert allowed me to spend four months. The interviewees, both in the Netherlands and Belgium, offered me their precious time to share their experiences and expertise on the cases researched. Their openness to my questions and prompt, positive responses to my requests for interviews and authorization of their citations have made this research an inspiring and rewarding adventure. I had no idea before I started that social security policy was such a com- plex, technical field. Nevertheless, Leo Aarts and Philip de Jong adopted me as their assistant on the so-called Donner Committee, which was advising the Dutch government on disability insurance reform at the time. Leo and Philip’s expertise, patience, thought-provoking discussions, and sense of humor provided a great and enjoyable learning experience. I chose to continue working at the Department of Public Administration at Leiden University as a post-doctoral research fellow, and I did so with good reason. Of all my colleagues at the department, some people in partic- ular come to mind: Anne-Greet, Celesta, Fleur, Gerard, Jörg, Jos, Liesbet, Martijn G., Martijn van de M., Mette, Sander, Sandra, Torsten and Willeke, helped resolve my own little crises along the way and were always around for a good coffee break, a discussion, and some gossip.