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Growth Strategies and Welfare State Reforms in Europe

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Abstract

This chapter ends the volume's journey exploring the role of growth strategies and associated welfare reforms in the evolution of advanced capitalist economies. Its key argument is that welfare reforms are institutionally and politically linked to countries’ growth strategies, i.e. their adaptations to the new era of growth since the 1980s. Linkages between welfare systems and growth regimes (and economic activity more generally) are rarely made in the social policy literature. Usually, the main explanation for welfare state reforms refers to sociodemographic changes such as aging, entry of women into the labor market, and emergence of new social risks (Esping-Andersen 1999; Bonoli 2005; Hemerijck 2013). Recent research on the politics of the welfare state highlights the relevance of changes in citizen preferences for explaining welfare state reforms (e.g. Gingrich and Häusermann 2015). Here again, there is no link between welfare state reforms and national economic strategies. When welfare state reforms are linked to economic issues and policies, they are often portrayed as being imposed by generic global factors such as globalization, neoliberalism, and austerity, but not as mitigated by countries’ institutional and political idiosyncrasies. Yet, in practice, when welfare systems have changed (Hemerijck 2013; Palier and Hay 2017; Taylor-Gooby et al. 2017), their transformations have not been the same across all countries; they have not followed the same timing or the same logic, although the countries were exposed to the same exogenous, sociodemographic or economic forces of change.

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... Countries have a specific policy legacy in terms of the ratio of welfare resources that is bound in policies entailing immediate vs. future distributive effects, or -in other words -in policies immediately correcting market outcomes vs. policies enhancing productivity. This legacy in terms of an investment/consumption ratio structures the relative saliency of policy functions in a country, the problem diagnosis/growth strategy, as well as the reform capacity (Hassel and Palier 2015;Beramendi et al. 2015). Functional "problem pressure", such as low employment performance or high child poverty rates do not explain directly the type of problems policy makers perceive as relevant, the diagnosis they make of these problems and the solutions they will adopt. ...
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Growth and Welfare in Advanced Capitalist Economies takes stock of the major economic challenges that advanced industrial democracies have faced since the early 1990s and the responses by governments to them. It has three goals: firstly, to further our understanding of how political economies have transformed over the past decades; secondly, to analyse the contribution of governments to these changes, by looking at their growth strategies and thirdly, to highlight and analyse the role of the reforms of welfare systems in this transformative change.In a nutshell, this book maps and provides general understanding of the evolution of growth regimes in advanced capitalist countries. It identifies five main growth regimes in contemporary advanced capitalist economies (three export-led and two domestic demand-led ones). To do so the book combines a supply side approach to economic growth as advocated by the Varieties of Capitalism Literature (OUP, 2001) with a demand side perspective as the recent discussion on growth models has exemplified. It argues that all political economies consist of growth regimes, which are based on a set of institutions that shape the supply side of the economy as well as on demand drivers such as government spending and private consumption. Both supply and demand are heavily shaped by the welfare state which provides for skills through education systems and stimulates demand through high social spending and private pension funds. The book focuses on the analysis of welfare reforms as growth strategies pursued by governments in an era characterised by financialization and the rise of the knowledge economy.
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This book serves as a sequel to two distinguished volumes on capitalism: Continuity and Change in Contemporary Capitalism (Cambridge University Press, 1999) and Order and Conflict in Contemporary Capitalism (1985). Both volumes took stock of major economic challenges advanced industrial democracies faced, as well as the ways political and economic elites dealt with them. However, during the last decades, the structural environment of advanced capitalist democracies has undergone profound changes: sweeping deindustrialization, tertiarization of the employment structure, and demographic developments. This book provides a synthetic view, allowing the reader to grasp the nature of these structural transformations and their consequences in terms of the politics of change, policy outputs, and outcomes. In contrast to functionalist and structuralist approaches, the book advocates and contributes to a ‘return of electoral and coalitional politics’ to political economy research.
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Chapter
Vor dem Hintergrund einer sich deutlich verbessernden Arbeitsmarktlage und eines Rückgangs der Arbeitslosigkeit leitete die Regierung Merkel (2013 bis 2017) Maßnahmen zur Reregulierung des Arbeitsmarktes ein. So wurde mit den zentralen arbeitsmarkt- (und tarifpolitischen) Reformprojekten der letzten Jahre – unter anderem der Einführung des gesetzlichen Mindestlohnes, der Stärkung der Tarifautonomie und den Regelungen zur Verhinderung des Missbrauchs von Werkverträgen und Leiharbeit – das Ziel der Stärkung von Arbeitnehmerrechten und der Sicherung der Qualität von Arbeit verfolgt, auch wenn dieses Ziel teilweise im Gesetzgebungsprozess oder auch in der Umsetzung abgeschwächt wurde. Besondere Herausforderungen bestanden in der dritten Amtsperiode der Regierung Merkel in der trotz Beschäftigungsrekorden wachsenden Ungleichheit auf dem Arbeitsmarkt, in der verfestigten Langzeitarbeitslosigkeit und in der Integration von Flüchtlingen. Geprägt ist die Periode weiterhin von einer Debatte um die Folgen der Digitalisierung für den Arbeitsmarkt.
Chapter
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Chapter
This book serves as a sequel to two distinguished volumes on capitalism: Continuity and Change in Contemporary Capitalism (Cambridge, 1999) and Order and Conflict in Contemporary Capitalism (1985). Both volumes took stock of major economic challenges advanced industrial democracies faced, as well as the ways political and economic elites dealt with them. However, during the last decades, the structural environment of advanced capitalist democracies has undergone profound changes: sweeping deindustrialization, tertiarization of the employment structure, and demographic developments. This book provides a synthetic view, allowing the reader to grasp the nature of these structural transformations and their consequences in terms of the politics of change, policy outputs, and outcomes. In contrast to functionalist and structuralist approaches, the book advocates and contributes to a 'return of electoral and coalitional politics' to political economy research.
Article
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Chapter
The Italian welfare state has experienced a huge reform trend in the last two decades. This has been consistent with a lengthy (and still limited) transition towards a more financially viable system of social policies; and a more effective labour market regulation. These trends have been confirmed in the last few years, when the Italian social and employment policies saw further reforms to address short- and long-term challenges. The chapter shows the huge reform record (both before and after the recent economic crisis) has not led to paradigmatic changes: the Italian system is still heavily based on transfers, with limited social services, while active labour market policies and social investment measures in general are still of minor importance. All this confirms the Italian welfare system is still part of the Southern European model, with open questions about its future sustainability and adequacy.
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Presidential election years attract attention to the rhetoric, personalities, and agendas of contending White House aspirants, but these headlines do not reflect the ongoing political shifts that will confront whoever moves into the White House in 2017. Earthquakes and erosions have remade the U.S. political terrain, reconfiguring the ground on which politicians and social groups must maneuver, and it is important to make sure that narrow and short-term analyses do not blind us to this shifting terrain. We draw from research on changes since 2000 in the organizational universes surrounding the Republican and Democratic parties to highlight a major emergent force in U.S. politics: the recently expanded “Koch network” that coordinates big money funders, idea producers, issue advocates, and innovative constituency-building efforts in an ongoing effort to pull the Republican Party and agendas of U.S. politics sharply to the right. We review the major components and evolution of the Koch network and explore how it has reshaped American politics and policy agendas, focusing especially on implications for right-tilted partisan polarization and rising economic inequality.
Chapter
To what extent have the new economic and budgetary rules adopted since 2010 (the European Semester, Fiscal Compact, Six Pack) changed the relationships between France and Europe in the field of welfare policies? To test whether the hardening of European Union (EU) economic instruments is followed by greater EU influence on social policy than in the past, we compare the role played by the EU in French welfare state reform before and after 2010, focusing on pensions, healthcare and employment policies. If one compares reforms before 2009 and reforms implemented when France has been subjected to Excessive deficit procedures (in 2009 and since 2013), one sees that the EU has gained two means of pressure. First, the need for deficit reduction is now explicitly integrated into French political discourses and policies and, second, the EU is able to demand evidence of reform. However, we show that France has maintained some flexibility on the timing and content of the reforms. Because, on the one side, welfare state reforms need to be negotiated domestically and, on the other side, of growing market concern about public debt, it remains difficult to claim that Brussels is the main driver of welfare state reform.
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This chapter makes a comparative analysis of the trajectories of welfare change in Italy and Spain since the outbreak of the financial crisis. We look at the differences in the types of institutional design to study welfare reform in these two countries and assess how recent changes have affected welfare state institutions. This chapter also assesses the level of the European Union (EU) involvement through formal instruments around the European Semester as well as by the means of agreements with the Troika and the European Central Bank (ECB). For this part of the analysis, three sets of documents have been used: Commission Recommendations and Council Decisions in relation to Excessive Deficit Procedures (EDP); Commission country-specific Recommendations based on Stability or Convergence Programmes, and Policy Measures to boost growth and jobs (National Reform Programmes). These documents allow an analysis of the contents of formal adjustment pressures. Other documents and sources (including newspaper articles) have also been analysed to look at the role of conditionality and ‘backroom’ diplomacy.
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This contribution asks whether the Memoranda of Understanding on Specific Economic Policy Conditionality (MoU), signed between bailed out member states and the European Union (EU), have changed the latter’s potential to intrude in the reform of national social and labour market policies and, if so, how. What have been the effects of the measures and reforms taken under the MoUs on national social and labour market policies? The MoUs of Greece and Portugal are analysed with a focus on pension systems and labour market policies. It is argued that the MoUs have been unprecedentedly intrusive in national social and labour market policies. The level of intrusiveness has varied, depending on the difficulty of implementing the MoU reforms, the extent to which the adjustment has been seen to be stalling and the degree to which a given policy area is directly relevant to the adjustment in question. The effects of the reforms induced by the MoUs have sometimes been intended as moves in the direction of a necessary modernization. However, the pressing demand to cut public expenditure and substantially improve competitiveness, combined with the increase in demand for social and labour market support due to mounting unemployment rates, has weighed heavily on such attempts.