Two Steps Forward,One Step Back: Merkel's CDU/CSU and the Politics of Welfare State Reform

Given its traditional support for conservative welfare state policies, the Christian Democratic Union's embrace of major reform measures in late 2003 seemingly marked a significant shift in the party's direction. The extent of its commitment to this new course became a key question in German politics during the election of 2005 and the early phase of Angela Merkel's Grand Coalition. This article examines the factors that contributed to her CDU's embrace of welfare state retrenchment in light of the literature on the politics of social policy reform. It argues that this shift in party policy was driven mainly by calculations of perceived partisan opportunity and organisational latitude. When the latter appeared to change, the consensus on major reform within the CDU crumbled, which in turn affected the party's 2005 campaign and its role in the Grand Coalition government.     

Wohlfahrtsstaatlicher Wandel zwischen „Arbeitszwang“ und „Befähigung“

The concepts of “workfare”, an “enabling” or a “social investment state”, respectively of an “activating welfare state”, share the idea of a paradigm shift of welfare state policies resetting the classic tension between decommodification and (re-)commodification. In this article, a comparative analysis of activating labor market policies in Denmark, Germany and the UK is giving evidence that in all countries recommodification has become a major goal, put into practice by both an increase of workfare and enabling policies. Different reform paths, however, can be identified as the emphasis on enforcing and enabling instruments as well as the particular mix of the instruments varies due to the country-specific background. Hence, the difference of reform policies is supposed to lead to a path dependent implementation of the paradigm shift of welfare state policies.     

Social Welfare in Post-Soviet Armenia: From Socialist to Liberal and Informal?

A drastic shift from strong social citizenship rights to a liberal, privatized, informal welfare model took place in post-Soviet Armenia. Drawing on the Armenian National Statistical Service's 2005 Integrated Living Conditions Survey and research conducted by the Armenian government and international agencies, this article evaluates the system of social welfare in post-Soviet Armenia. It identifies the direction of social policy reform during the transition, considering welfare institutions, levels of social provision, and outcomes. The roles of the labor market, the state, and the informal sector in delivering social welfare are discussed. The Armenian welfare system is classified in terms of current conceptual frameworks for welfare systems.     

Trust in Democratic Institutions in Germany: Theory and Evidence Ten Years After Unification

The German welfare state is in crisis. Alarming long-term demographic trends, the still not fully digested consequences of German unification and the current economic downturn in much of the Eurozone have combined to create an urgent need for welfare reform. Yet the constitutional arrangements which govern the German political system, and well-entrenched political practice, mean that any such reform process is a daunting challenge. Thus, the welfare crisis is also a crisis of German-style co-operative federalism. Current empirical evidence makes for uncomfortable reading, and triggers debate on the nature of the German federation: have the two constitutional principles of federalism and establishing equal living conditions throughout the federation become mutually exclusive? However, as much of the welfare state is centred on the best utilisation of scarce financial resources, it is debatable to what extent alterations in the functional distribution of welfare responsibilities among the territorial levels of government can be regarded as a solution for the current problems. The article concludes that in the search for long-term sustainability of the welfare state the territorial dimension is likely to remain a secondary issue.     

The Australian Welfare State: Has Federalism Made a Difference?

This paper examines the historical development of the Australian welfare state with a view to identifying the role that Australia's federal constitutional arrangements have played in shaping that development. Theoretical paradigms have been unanimous in their prognoses: that federal states are likely to be slow in developing welfare state programmes and typically spend less on them than unitary states. But recently it has been argued that federal institutions may have a “ratchet effect” of slowing down the pace of change, irrespective of its direction. The purpose of this chronological account of significant stages in the development of the Australian welfare state is to use the unfolding of historical events — far too rich in nuance and detail to be captured in quantitative modelling — as a test‐bed for establishing whether, and, if so, to what extent, federalism has impacted on the trajectory of Australian welfare state development.     

Social injustice and economic dynamism in contemporary Korea

Abstract

This article examines the processes of labor market restructuring and welfare reform in South Korea since the 1997/98 crisis, arguing that the Korean state-capital complex has succeeded in effecting a substantial redistribution of income from labor to capital. This redistribution of income has played a critical role in enhancing Korea's international competitiveness and in facilitating a return to sustained growth. The principal mechanisms through which this redistribution has been achieved are the intensified exploitation of weaker sections of the proletariat and the reduction of the traditionally more protected organized sections of the workforce in major firms. At the same time, the state has strengthened welfare safety nets and sought to place concerns about structural competitiveness at the heart of the welfare regime through the promotion of vocational training. What has been most striking about the process of welfare reform, however, has been the capacity of the state to limit the growth of welfare expenditures/provision whilst simultaneously creating massive new labor market insecurities. As a result of the success of the Korean state in restructuring labor markets in order to effect a redistribution of income from weaker sections of the proletariat to capital and limiting the growth of social spending we have witnessed a marked increase in inequality since 1997. Korea's apparent success in transforming itself into a competitive, dynamic neoliberal economy must, therefore, be understood as being symbiotically linked to the intensification of inequality.     

Gerechtigkeit zwischen den Generationen

The concept of intergenerational justice has become ever more prevalent in discussions about welfare reform in Germany. For this reason, we analyse problems of justice between generations using the terminology of philosophical theories of justice. We argue that transfers by the welfare state and transfers by the family must be distinguished in the analysis of material and immaterial transfers between generations. As our empirical results show, problems of justice between generations arise mainly in the case of welfare state transfers. Subsequently, we describe the paradigms of intergenerational justice informing the public debate. Data from surveys over the past fifteen years show to what extend these (public) paradigms are shared by individuals in the German population.     

Running to stand still: aggressive immobility and the limits of power in Russia

The common conception of Russian politics as an elite game of rent-seeking and autocratic management masks a great deal of ‘mundane’ policymaking, and few areas of social and economic activity have escaped at least some degree of reform in recent years. This article takes a closer look at four such reform attempts – involving higher education, welfare, housing and regional policy – in an effort to discern broad patterns governing how and when the state succeeds or fails. The evidence suggests that both masses and mid-level elites actively defend informality – usually interpreted in the literature as an agent-led response to deinstitutionalization and the breakdown of structure – creating a strong brake on state power. More than a quarter century into the post-Soviet period, this pattern of “aggressive immobility” – the purposeful and concerted defense by citizens of a weakly institutionalized state – has in fact become an entrenched, structural element in Russian politics.     

Territorial Justice and Devolution

The concept of territorial justice has a long history in studies of the spatial distribution of welfare state services in the UK. Since the inception of the devolution process, territorial justice has maintained support as a principle to guide policy and has been promoted recently as an objective for the reform of the financial arrangements for the devolved administrations. The first part of the article argues that the standard version of territorial justice is premised on the UK as a unitary state and is unworkable as a political principle of justice after devolution. An alternative version of territorial justice is developed to accommodate a union state. The final part discusses several policy issues post-devolution in terms of different versions of territorial justice: intergovernmental fiscal relations; health care policy including access to medicines; and free community care for the elderly.     

Social policies in Switzerland and Japan: Managing Change in Liberal‐Conservative Welfare States

Both the Swiss and the Japanese welfare states are difficult to classify in any one of the most widespread typologies, as each of the two countries combines features that are typical of the liberal model, such as a large private sector role in the delivery of welfare, with aspects that are more reminiscent of the conservative model. These include a social insurance system geared toward status preservation and low employment rates for mothers. In this article, Japan and Switzerland are characterised as liberal conservative welfare states. After pointing out the key features of this hybrid welfare state model, the article puts forward some hypothesis with regard to the reform trajectory that this model is likely to follow. In particular, it is argued that retrenchment in these two countries is likely to be more substantial than in conservative welfare states, because the private schemes that are going to be curtailed are less accountable to public scrutiny and do not automatically expose retrenchment‐oriented governments to the risk of electoral punishment. The hypothesis is only partially confirmed by the empirical analysis of reform, as Swiss direct democracy institutions are proving a formidable obstacle to a generalised dismantling of welfare programmes. In Japan, uncovered needs resulting from retrenchment and social change are being picked up by families.     

Welfare State Restructuring without Grand Coalitions: The Role of Informal Cooperation in Blame Avoidance

This article argues that welfare state restructuring, which is highly unpopular among voters, is politically feasible if government and opposition parties cooperate informally with one another. Contrary to what key arguments made in the literature assert, restructuring does not require the formation of a grand coalition to diffuse blame from voters. Informal cooperation between parties is a distinctive blame-avoiding strategy, which differs not only from other party-oriented strategies such as building a grand coalition, but also from voter-oriented ones, such as obfuscation and exemption. By analysing the politics of pension reform in Germany, this article shows that informal cooperation enables political parties to restructure the welfare state without running the risk of electoral failure.     

Coming to terms with a ‘European identity’: The Sudeten Germans between Bonn and Prague

An expansion of the welfare state is often expected to cause a strengthening of the identification of ‘the people’ with the state. It is the aim of this article to show that the integration of the pension system of the former GDR into the pension system of the FRG has to be seen as an expansion of the welfare state that did not have this positive effect. To this purpose, the German pension systems and their unification are analysed. It is argued that the gauge for identification with the welfare state is the national interest and not private benefit and that therefore the integration of the GDR pension scheme did not result in a strengthening of identification, despite the welfare expansion.     

Regime Shift in Japan?Two Decades of Neoliberal Reforms

This paper uses insights drawn from a paired comparison of Switzerland and Japan to give an account of the changes brought about by neoliberal policy adaptation in Japan over the last two decades. In Switzerland, notwithstanding further liberalization of the traditionally liberal regime prompted by the economic hardships of the 1990s, the referendum system helped the Social Democrats and unions to defend their rights and maintain the welfare schemes belatedly established in the 1980s. By contrast, the Japanese ruling party not only delayed liberalization of the protectionist state, but also aggravated fiscal problems by implementing a series of expansionary macroeconomic policies in the 1990s. Thus, without pursuing coherently such neoliberal policies as fiscal consolidation, privatization, or market deregulation, the Japanese state now faces a serious dilemma between the immediate need for structural reforms and the social unease that would result. Focusing on the reform packages of the Nakasone (1982‐87), Hashimoto (1996‐98), and Koizumi (2001‐) administrations, the paper reviews the sequences of reform policies as an interplay among economic challenges, actors’ aspirations, and institutional constraints, and further develops arguments about the segmented structure, peculiar to the Japanese state, that retards political changes.     

Policies,Principles, and Polls: Bill Clinton’s Third Way Welfare Politics 1992–1996

Bill Clinton in his 1992 presidential campaign promised that, if elected, he would bring about the “end of welfare as we know it.” This catchy election pledge aimed to address middle class concerns about so–called welfare dependency while also arguing that the government had an important role to play in fighting poverty and unemployment. Clinton’s Third Way position, at best, offered a way out of the liberal/conservative impasse on how to effectively reform America’s welfare system. At worst, Clinton’s position undermined the concept of welfare entitlements that the Democratic Party had established in America. As it turned out, in 1996 during the lead up to that year’s presidential election, President Clinton signed into law the most significant federal welfare Act since the 1960s. However, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) that Clinton signed had largely been drafted by congressional Republicans. This article draws on interviews with three of Clinton’s senior welfare advisers to examine his welfare reform proposals and politics. It concludes that the failure of Clinton’s Third Way welfare agenda opened the way for more conservative reforms. This experience is illustrative of the pitfalls of Third Way politics with its mix of post–entitlement welfare policies and hard–nosed electoral positioning.     

Party Competition and Reforms of Unemployment Benefits in Germany: How a Small Change in Electoral Demand Can Make a Big Difference

This article shows how party competition has influenced reforms of unemployment benefits in Germany. The existing literature on German labour market policy emphasises institutional factors and predicts policy stability. Consequently, the recent fundamental reforms (‘Hartz reforms’) pose a challenge to previous research. By looking at the spatial configuration of the party system and at policy demand, this article argues that the incremental retrenchments of the 1980s and 1990s were conditioned by centripetal competition and a high degree of welfare consensus, whereas the more radical Hartz reforms were made possible by a limited shift in public opinion in favour of restructuring and the lack of a left-wing counterweight in the party system. Thus, the structure of the party system exacerbated the effect of a demand shift that was only moderate. The analysis is not meant to discard other explanatory factors, rather it intends to demonstrate the relevance of party competition to the study of labour market reforms in Germany and, more generally, to comparative welfare state research.     

Wedge Politics and Welfare Reform in Australia

The election of the Howard Government has marked a paradigm shift in welfare policy with the implementation of far reaching reforms around the concept of mutual obligation. At the same time, there has been media speculation about the Government's use of 'wedge politics' to sustain its political agenda with respect to welfare and other policies. Wedge politics, however, is yet to receive detailed analysis in Australian political science. We define wedge politics to be a calculated political tactic aimed at using divisive social issues to gain political support, weaken opponents and strengthen control over the political agenda. The purpose of this paper is thus twofold: to develop a definition of wedge politics and to investigate how the Howard Government's welfare reform agenda might be understood as an example of such politics, drawing out its longer-term implications.     

Reclaiming Community? From Welfare Society to Welfare State in Australian Catholic Social Thought

Influenced by both conservative and left wing communitarian thinking, current debate about welfare governance in Australia reflects an inflated evaluation of the potential role of the third sector or civil society organisations in the production of welfare. This paper gives an overview of twentieth century Australian Catholic social thinking about state, market and civil society relations in the production of welfare. It highlights the neglected, historical role of the Catholic Church in promoting a "welfare society" over a "welfare state" in Australia. It points to the reasons for the Church's later embrace of the welfare state and suggests that these reasons should make us deeply sceptical of the current communitarian fad.     

Das Alter: adressiert, aktiviert, diskriminiert

In the last years, ageing – or rather active ageing – has become a highly popular issue. In contrast to the disputed activation in labor market policies, the activation of old age seems to be a win-win-situation that benefits everyone. However, embedded in two highly topical debates – demographic change and activation-based welfare state reform – the conditions of the popularization of active ageing remain a blank within the German discussion. This concerns the specifics of old age activation as well as the power-related implications and the normalizing and standardizing consequences of this re-negotiation of old age. It is the aim of this article to discuss these blanks theoretically, paying reference to Anglo-Saxon gerontology, to works on active society and to gender theory on sameness and difference.     

The rise and fall of conservative reform in the United States: George W. Bush and the transformation of the Reagan legacy

Americans often remark that 9/11 changed their nation forever. Conservatives rarely note, however, that the attacks also changed the effort at conservative reform that began with the election of Ronald Reagan in 1980. Reagan preached strength in foreign policy but rarely used force to fight the Cold War. On the home front, Reagan pursued neo-liberalism within the limits of political prudence, under the influence of neo-conservative ideology among other factors. Reagan's Republican successor George W. Bush has used force in pursuit of democratic nation-building while expanding the American welfare state at a pace not seen since the 1960s. If elected, Bush's opponent, Senator John Kerry, might face a Republican Congress and thus gridlock on domestic policy. Kerry also favors a more realistic stance for the nation in foreign affairs. Ironically, the revival of the Reagan legacy of conservative reform may hinge on the defeat of the Republican incumbent, a defeat that could open the possibility of reclaiming Reagan's party for the cause of limited government and individual liberty.     

Fighting with Goliath: The reform of the public health care insurance scheme in Germany,its potential to increase employment and alternative models of reform

Faced with steadily growing expenditures of the public health care insurance companies, rising statutory contributions for health care insurance and constantly high unemployment, the German government decided to introduce a reform of the public health care insurance scheme that came into force in January 2004. The first part of this paper discusses the reasons for the reform and presents its central elements. Since the reform was introduced to contribute to an increase of legal employment by a reduction of statutory contributions to the public health care scheme, I will discuss the reform's potential to increase employment. In the next step the paper illustrates alternative models of health care reform (citizen's scheme and individual health care premium) and compares their potential for job growth. Although the health care reform of the government considers both the need to reduce statutory contributions to public health care insurance and to ease income tax in order to compensate for higher individual payments for medical treatment, its potential for job growth is limited because it lacks support from the health care bureaucracy and the pharmaceutical industry. A reform of welfare state politics resembles a fight with a Goliath made up of powerful interest groups, a reluctant bureaucracy and uncertain socio-economic outcomes.