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Journal of European Public Policy
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The other side of agency: bricolage and
institutional continuity
Martin B. Carstensen & Nils Röper
To cite this article: Martin B. Carstensen & Nils Röper (2021): The other side of
agency: bricolage and institutional continuity, Journal of European Public Policy, DOI:
10.1080/13501763.2021.1936128
To link to this article: https://doi.org/10.1080/13501763.2021.1936128
Published online: 08 Jun 2021.
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The other side of agency: bricolage and institutional
continuity
Martin B. Carstensen
a
and Nils Röper
b
a
Department of Social Science and Business, Roskilde University, Roskilde, Denmark;
b
Cluster
of Excellence, The Politics of Inequality, University of Konstanz, Konstanz, Germany
ABSTRACT
Agency has received much attention in recent historical institutionalist
theorizing of change processes, but remains largely disconnected from
questions about mechanisms that stabilize institutions. To help fill this
lacuna, the paper presents bricolage as one key mechanism through which
actors stabilize an institutional setup. It suggests that institutions may be
defended by keeping intact the institutional logic on which the incumbent
coalition is based, but rearrange the salience of the ideational and
institutional elements that make up the existing institutional setup. The
empirical relevance of the argument is supported through a case analysis of
a 1980-reform that could have changed the face of German corporatism, but
never was, namely the policy of collective equity funds (Tariffonds). Through
process tracing, we explain the fate of the reform with the effectiveness of a
last-minute intervention based on a bricolage of the extant institutional logic.
KEYWORDS Agency; bricolage; Germany; historical institutionalism; institutional stability; reform
process
Introduction
New institutional analysis has greatly advanced our understanding of the
dynamics underlying the creation of public policy. Most importantly, it pro-
vided a much-needed corrective to the largely unmediated agency of
much behavioralism by offering a range of arguments for why patterns of
human interaction tend to stabilize over long period of times
(Hall & Taylor, 1996). Soon, however, serious questions were raised across
the three new institutionalisms, whether the focus on structure had left too
little room for agency (Schmidt, 2008). As a response, and similar to
debates in rational choice- and sociological institutionalism (Greif & Laitin,
2004; Lawrence & Suddaby, 2006), historical institutionalists have in recent
decades turned their attention to theorizing agency in explanations of insti-
tutional change (Emmenegger, 2021; Fioretos, Falleti, & Sheingate, 2016;
© 2021 Informa UK Limited, trading as Taylor & Francis Group
CONTACT Martin B. Carstensen mcar@ruc.dk
JOURNAL OF EUROPEAN PUBLIC POLICY
https://doi.org/10.1080/13501763.2021.1936128
Gerschewski, 2021). Particularly fruitful has been the greater analytical
emphasis on the work perpetuated by actors to change institutions by shift-
ing their coalitional basis (e.g., Béland, 2009; Mahoney & Thelen, 2010; Streeck
& Thelen, 2005). Rather than assuming that institutions automatically
produce action, this body of scholarship suggests that institutions require
interpretation, which may over time lead to gradual, albeit significant,
shifts in how an institution is practiced.
However, the progress made in injecting agency into accounts of insti-
tutional change so far remains unmatched in how historical institutionalist
scholarship theorizes institutional continuity. That is, in explanations of insti-
tutional continuity, historical institutionalism still relies on a conception of
path dependency as almost automatically produced by increasing returns
and with actors all but gone from theoretical (if not empirical) accounts of
institutional stability. This is not to say that the coalitional approach of histori-
cal institutionalism does not recognize that building coalitions depends on
continued work by agents for their stability (Mahoney & Thelen, 2010).
Early work by Pierson (1996) notably highlighted the importance of adapta-
bility for the stability of institutions. However, the notion that stabilization
requires agency –what we call ‘the other side of agency’–remains distinctly
undertheorized (see also Emmenegger, 2021).
Contributing to the broader effort of theorizing agency in institutional
stability and change, this paper conceptualizes what we argue is a key mech-
anism through which actors can stabilize institutions, namely bricolage of the
existing institutional logic to shore up support from the incumbent coalition.
The argument is based on an intuitive proposition: In a situation of pressure
on the coalition of incumbent actors, with key actors close to defecting from
the institutional setup (Culpepper, 2005), ideas are needed that may renew
support and refute competing narratives about the need for change. Since
the stability of the institutional setup rests on the coalitional support it
receives from incumbent supporters (Hall & Thelen, 2009), it is vital that argu-
ments mustered in its support breath new energy into the supporting
coalition without undermining the extant institutional logic and its power-
distributional implications (Hall, 2016). Given this balancing act, we
contend that bricolage –here understood as a reorganization of ideational
and institutional elements from the existing institutional logic (see Campbell,
2004; Carstensen, 2011; Hannah, 2020)–may work as a viable strategy in
defending the status quo. To do so effectively, requires that the reconfigured
institutional logic convinces incumbent actors about its continued problem-
solving capacity, distributional attractiveness, and normative acceptability
(see below).
To offer an initial plausibility probe of institutional bricolage as a mechan-
ism of institutional maintenance, we turn to the example of German Vermö-
genspolitik (‘wealth politics’). In 1980, equity funds collectively managed by
2M. B. CARSTENSEN AND N. RÖPER
unions and employers (Tarriffonds) all but passed into legislation. These col-
lective stock sharing schemes would have had the potential to change the
face of German corporatism by transforming corporate ownership patterns
over time and altering bargaining channels of industrial relations. We argue
that had it not been for the last-minute introduction of the ordoliberal idea
of open market access to the policy debate by the junior government
coalition partner The Free Democratic Party (FDP), Tarriffonds would have
been introduced. Interestingly, we are not seeing here the use of a new
idea to defend the status quo. Rather we are witnessing a bricolage of the
existing institutional logic through the activation of an idea that belongs to
the same tradition on which the dominant approaches to wealth policy is
based, but never before applied in this specific context. Based on process
tracing that draws on archival research, media coverage and interviews
with insiders to the policy process, we show how the benefits enjoyed by
incumbent actors –including veto points (Mahoney & Thelen, 2010)or
increasing returns from the existing institutional setup (Pierson, 2000)–did
not automatically prevent change. Instead, the coalitional foundation under-
lying institutions required active, strategic work to be maintained, particularly
as they were threatened by challengers of the status quo.
The paper is structured in the following way. First, we develop the concept
of bricolage in the context of institutional stabilization. Second, we present
our analysis of the policy of Tariffonds. Finally, we conclude.
Bricolage and institutional stabilization
To see how a bricolage of the existing institutional logic may work as a stra-
tegic tool for actors’effort to maintain institutional stability, it is important to
first appreciate the coalitional basis on which institutional stability rests (Hall
& Thelen, 2009). Institutions are distributional instruments that, given their
unequal implications for resource allocation, are fraught with tensions
(Mahoney & Thelen, 2010, p. 8). The stability of such settlements is based
on the durability of compromises among groups of powerful actors, which
requires ongoing work by actors to maintain (Thelen, 2004). Securing
support from the coalition becomes all the more important with shifts in
the distribution of power resources between or within coalitions (Capoccia
& Kelemen, 2007), or through the loosening of functional and political con-
nections between institutional domains, which may bring on a critical junc-
ture with real possibility for major change (Carstensen & Röper, 2019;
Streeck, 2009).
In this view, the ongoing mobilization of supporters of the status quo is
key for maintaining stability (Mahoney & Thelen, 2010; Carstensen & Ibsen,
2021), and in some cases to keep ‘external constituencies’with no particular
interest in the issue unorganized (Emmenegger, 2021). This involves
JOURNAL OF EUROPEAN PUBLIC POLICY 3
defending the reigning institutional logic, understood as the strategies,
routine approaches, and shared decision rules that structure interactions in
the institutional setup (Deeg, 2005). Carving out room for agency means
taking seriously that coalition building and maintenance do not automatically
occur because of common, objective interests. Instead, it suggests that actors
need to shore up common beliefs about the payoffof extant institutional
setup (Culpepper, 2008). The stability of coalitions and the institutions they
support thus rely on the ongoing development of ideas, theories and narra-
tives that provide common interpretive lenses through which members of
the coalition can identify with each other (Hall, 2016; Seidl, 2020). Naturally,
this task becomes all the more important and challenging in periods of uncer-
tainty (Blyth, 2002; Hall, 1993) where relative structural indeterminism give
actors greater leeway than normal circumstances permit (Mahoney, 2002).
Given that incumbent actors cannot automatically maintain support
among key coalitional members (Capoccia, 2016), mounting an effective
defense is no mean feat. In Capoccia and Kelemen’s(2007, p. 352) terms,
the goal is the survival and return of the existing institutional setup, i.e., ‘res-
toration of the pre-critical juncture status quo’. Reaching this goal requires
treading a tight rope balance between maintaining the thrust of the existing
institutional logic while also re-casting it to the extent that it may act as an
effective response to the challenges leveled at it by a coalition of challengers
(Röper, 2021b). In this situation, given that extant institutions are under
pressure, simply rehashing the same arguments will hardly be a viable strat-
egy. On the other hand, taking on a new narrative based on a competing
institutional logic would likewise threaten to undermine the coalition, since
it would involve caving to the offense of the challengers. In essence, a
viable route involves keeping intact the basis of the institutional logic on
which the institutional setup is based, but couch it in a narrative that
speaks to the challenges leveled at existing institutions.
This mechanism for stabilization may usefully be captured with the
concept of bricolage, understood as a reorganization of ideational and insti-
tutional elements from the existing institutional logic (originally developed in
Levi-Strauss 1966). Working as a bricoleur –which may roughly be translated
as a ‘handyman’or a ‘jack of all trades’–political actors approach the task at
hand from the perspective of which instruments they have at their disposal,
and not which instruments are rationally most suitable (Baker & Nelson,
2005). This is a satisficing and conservative actor that pragmatically
engages in a dialogue with cognitive and symbolic instruments to decide
what meaning they may gain when combined in new ways (Campbell,
2004). Despite interpretive constraint placed on actors by meanings already
imbued by their previous application (Carstensen, 2011), the bricoleur is
able to creatively come up with ingenious solutions that may reestablish
4M. B. CARSTENSEN AND N. RÖPER
order until it is yet again upset by the arrival of a new problem (Hannah, 2020;
Röper, 2020).
The heterogeneous set of elements at hand are both the ideas and insti-
tutions already actively in use –the relative salience of which may be
reshuffled through bricolage –as well as left over ideational and institutional
debris from ‘paths not taken’(Schneiberg, 2007) or previously subordinated
or minor set of practices (Crouch & Keune, 2005) that are added to the set
through bricolage. The latter, more expansive form of bricolage holds
greater potential to over time change and not only stabilize institutions
(Campbell, 2004). More generally, the long-term effects of the redeployment
of existing institutional elements are impossible to know in advance. Indeed,
unintentionally laying the seeds for long-term institutional change is a risk
that actors using this mechanism for stabilization must be ready to run (Car-
stensen, 2017).
Although commonly employed to understand change processes (Camp-
bell, 2004), here we redirect the concept of bricolage towards the question
of how support for the extant institutional setup is maintained. We take
from gradualist approaches in historical institutionalism that the enforcement
of institutions varies over time and hinges on the capacity of actors to dom-
inate the interpretation of what the institutions may mean (Streeck & Thelen,
2005). Bricolage as a strategy for stabilization comes into play when incum-
bent actors seek to bolster support for the institutional setup by creatively
re-using existing elements to persuade potential defectors (Culpepper,
2005) of the continued viability of the institutional setup in cognitive, norma-
tive and distributional terms. Bricolage of the existing institutional logic thus
serves to explain the continued support of the incumbent coalition for main-
taining the existing institutional setup in face of efforts by challenging
coalitions to undermine support for it.
Based on the literature on bricolage in public policy, we suggest three
necessary conditions for the capacity of a bricolage to maintain the status
quo, specifically that it satisfies cognitive, distributional and normative con-
cerns in the incumbent coalition. First, the bricolage needs to be cognitively
sound by credibly addressing the problems that were the original reason for
increasing questioning of the problem-solving capacity of the existing insti-
tutional setup (Campbell, 2004; Schmidt, 2008). This is particularly important
in a situation where this capacity is being questioned inside and outside the
incumbent coalition and a ‘joint belief shift’(Culpepper, 2005) is threatening
to undermine common conceptions of what the problems are and how they
can plausibly be solved (Béland, 2009). Here it will matter whether a compet-
ing coalition of actors manages to establish that policy anomalies encoun-
tered by the existing institutional setup are beyond repair (Hall, 1993), or
whether the threat of anomalies can be defuzed if the actors involved are
willing to amend their solution sets to a degree deemed satisfactory by
JOURNAL OF EUROPEAN PUBLIC POLICY 5
important observers (Wilder & Howlett, 2014, p. 189). If incumbent actors
manage to convincingly counter competing narratives, they will traverse an
experimental period of trying to figure out the implications of alternative
institutional arrangements, without it resulting in institutional change.
Second, the institutional setup produced through bricolage must be
reconfigured in a way that answers to power-distributional concerns
among coalition members. The bricolage will give greater prominence to
certain elements in the institutional setup, or insert elements from another
context, and doing so will inevitably raise questions about whether it
satisfies the preferences of all central actors in the incumbent coalition. As
argued by Culpepper (2008), key for the perseverance of the coalition is
that they can persuasively respond to the most salient features of the
dilemma raised by the contending coalition while appealing across the pre-
ferences of different parts of the coalition. To this end, incumbent supporters
will need new elements –whether cognitive or symbolic –to persuasively
argue that keeping the coalition intact promises the best possible outcome
for coalition members. Particularly important will be the continued support
of actors centrally placed in incumbent networks, since waning support on
their part is likely to lead to wider defection in the rest of the network (Cul-
pepper, 2005).
Third, the stability brought on by reconfiguration of the incumbent insti-
tutional logic must also speak to dominant values in the coalition as well
as society at large (Schmidt, 2008). This is not as straight forward as it
might appear, since basing one’s arguments on dominant values is easier
done when one is merely restating rather than reconfiguring the institutional
logic. The re-ordering of the elements that make up the existing institutional
logic, or indeed the injection of elements new to the set, will require the
development of new powerful ideas or narratives (Seidl, 2020) that may for-
cefully communicate the embeddedness of the institutional setup in a
broader moral economy (Hansen, 2019). Here, however, incumbent actors
are well placed to strengthen the resistance to change of existing institutions,
since in developing their bricolage, they will be able to draw on entrenched
cultural categories that provide potent weapons against the introduction of
new interpretive frames (Capoccia, 2016).
Empirical analysis: the case of German collective capitalism
that did not happen
To provide an example of how institutional maintenance through bricolage
operates in practice, we turn to the case of a reform that never was: The
German Tarriffonds policy of collective stock sharing that all but passed
into legislation in 1980. The case of Tarriffonds is particularly well
suited for exploring institutional bricolage as a mechanism for institutional
6M. B. CARSTENSEN AND N. RÖPER
maintenance, since its critical case properties lend weight to a claim of wider
empirical relevance (Flyvbjerg, 2006). In particular, the many circumstances
speaking in favor of the policy passing –notably that the governing coalition
had agreed on all the details of the reform proposal and was ready to come
through on one of the chancellor’s central election promises –leverages the
argument that institutional maintenance through bricolage could also take
place in situations without a similar level of alignment of policy preferences.
To support our claim that the ideational intervention of the FDP is a key
explanatory factor for why the Tariffonds-policy never passed into law, we
investigate first the fertile political and institutional terrain for substantial
change to take place. Here we show that shifts in the coalitional basis of
the status quo worked in favor of reform, while at the same time the insti-
tutional interconnectedness that had stymied Vermögenspolitik up until
then was steadily unraveling. Both ‘permissive’and ‘productive’conditions
for a critical juncture thus appeared to be met (Soifer, 2012). To explain
why it turned out to be a mere ‘candidate juncture’(Capoccia, 2015, 169),
we identify the development of the idea of open market access, and, using
insider knowledge from actors central to the process, trace the centrality of
this ordoliberal idea for the postponement of Tarriffonds. The analysis
draws on a wide range of primary and secondary sources, including docu-
mentation from German parliamentary debates, newspapers, party foun-
dation and federal archives, and in-depth expert interviews.
Critical juncture approaching: growing political agreement and
loosening institutional constraints
The decades preceding the policy debate on Tarriffonds witnessed Vermögen-
spolitik –i.e., the issue of ‘productive capital in the hands of employees’(or
the lack thereof) –building as a central concern for left- and right-wing gov-
ernments. Upon the immediate German postwar efforts of reconstruction, in
the mid-1950s the highly concentrated ownership of capital was increasingly
lamented as an economic and social problem across the political spectrum
(Abelshauser, 1996, p. 397). While a series of legislations aiming at private
wealth creation followed, these predominantly subsidized savings plans
and barely contributed to more capital in the hands of employees (Erbe,
1999, p. 421).
What prevented far-reaching reforms that would increase private capital
ownership, which was one of the original goals of Vermögenspolitik? The
limited success was not for a lack of (party) political plans and promises.
Promising far-reaching measures to foster private capital formation had
become a fixture of government declarations (Regierungserklärungen) since
at least 1957. Initially the main reason for this series of nondecisions and rela-
tive continuity were stark ideological differences between conservatives and
JOURNAL OF EUROPEAN PUBLIC POLICY 7
organized business on one side and Social Democrats and unions on the
other. German Vermögenspolitik, after all, has ‘antisocialist roots’(Dietrich,
2008c, p. 901), as the initial impetus for the Christian Democrats (CDU) to
push for private capital formation was to politically flank plans to privatize
government-owned firms such as Volkswagen with employee stock
schemes (Der Spiegel, 1959). Unions and Social Democrats not only
opposed privatization plans, but also feared that such schemes would turn
workers into ‘little capitalists’in a society of owners (Dietrich, 2008a, p. 892).
These cleavages, however, became less pronounced throughout the 1960s
as a result of marginally transformative learning processes among central pol-
itical actors. A study from 1968 claiming that 1.7 per cent of German house-
holds own 70 per cent of productive capital, caused a public outcry and
heated debates about wealth inequality (Dietrich, 2008c, p. 892). Indeed,
by the early 1970s, the Social Democratic Party (SPD) competed with the
CDU in its advocacy of private capital formation policies. Overall, we see a
convergence of conservative and Social Democratic positions and an ever-
stronger political will to push through comprehensive reforms (Dietrich,
2008b).
While the political differences about whether fostering employee capital
ownership dwindled, the underlying motivations and ideas about the how
continued to stand in stark contrast. To summarize crudely, the CDU and
organized business looked to increase employees’attachment to their com-
panies through employee shares or other internal schemes, whereas the SPD
sought to involve organized labor in the process to make employees less
dependent on their employers and empower unions through external
schemes. Left-leaning political forces increasingly eyed Vermögenspolitik as
a way to ‘democratize capitalism’through widespread employee capital own-
ership (Sjöberg & Dube, 2014, p. 492). As such, Vermögenspolitik was increas-
ingly considered ‘the third way’between Marxism and a market economy
(Adam, 1976, p. 84).
Continuing political differences notwithstanding, reforms that would go
beyond piecemeal subsidies increasingly seemed realistic. Why then, do we
see at least nine failed reform initiatives by governments throughout the
1960s and 1970s, a deadlock that we see in no other policy domain (Dietrich,
2008e, p. 715)? To make sense of this, it is important to take into account that
Vermögenspolitik as a policy domain is linked to constraints and impetuses
posed by other domains. Given that Vermögenspolitik is in many ways not a
formally established policy field, its goals tend to be attached and are
often trumped by those of other fields, including social and economic policy-
making (Dietrich, 2008a, p. 897; 2008b, pp. 802–3). This ‘chameleonesque
character’(Dietrich, 2008d,p. 854) of the policy field makes it imperative to
appreciate the implications of the evolution of other fields. The constraints
posed by other institutional domains that inhibited far-reaching reforms
8M. B. CARSTENSEN AND N. RÖPER
toward collective capitalism include wage-focused bargaining, a bank-based
financial system, an insider-oriented corporate governance regime and a one-
pillar PAYG pension system (Carstensen & Röper, 2019; Röper, 2021a; Streeck,
2009).
Especially in the aftermath of the 1974 recession, however, these con-
straints loosened considerably. Due to the overall economic slowdown, the
maneuvering room for wage increases became smaller, which makes alterna-
tive forms of remuneration like deferred compensation that is linked to the
performance of firms more attractive, in a move away from the traditional
‘monoculture of cash salary increases’(Die Zeit, 1979). The undercapitaliza-
tion of German firms increasingly delegitimized the insider-paradigm and
the overreliance on bank and internal finance (Röper, 2018). This structural
‘equity-problem’of corporate Germany and questions of economic growth
more generally came to dominate debates about fostering private capital for-
mation (Bundestag, 2006; Dietrich, 2008e, p. 715). Taken together, insti-
tutional constraints losing purchase in combination with the learning
processes sketched above, meant that the policy field of Vermögenspolitik
was ripe for transformative change by the end of the 1970s.
Candidate juncture: Tarriffonds postponed indefinitely
The standoffbetween ‘individualists’favoring firm-internal capital participation
schemes for employees and ‘collectivists’demanding external investment
funds persisted throughout the 1970s and beyond. In fact, what we see is a
‘polarization of the political debate about capital sharing (Vermögensbeteili-
gung), which almost turns the choice between “internal”[betrieblich]or“exter-
nal”[überbetrieblich] into a question of creed’(Toillié, 1977, p. 243). The CDU
and organized business largely remained in the camp of ‘individualists’.One
crucial actor, however, displayed a meaningful positional change toward the
end of the 1970s. Formerly a staunch ‘individualist’,importantpartsofthe
economically liberal FDP warmed up toward external policy solutions, more
similar to those demanded by unions and the SDP (Dietrich, 2008c,p.892).
1
The FDP positioned itself between the conservatives and the social democrats
by favoring external solutions through collective bargaining channels in prin-
ciple, but insisting on tight restrictions on how Tariffonds may invest their
funds (to prevent industrial politics and excessive influence over firms) and
freedom of choice for employees on how to invest deferred compensation
(in contrast to the SPD, who favored all compensation that was deferred
through collective bargaining agreements to be transferred to the Tariffonds)
(FAZ, 1979a). This in-between position of the FDP stemmed from internal differ-
ences with regards to collectivist vs. individualist solutions. It was especially
economics minister Otto Graf Lambsdorff, who opposed collectivist solutions
along the lines of Tariffonds (FAZ, 1979b).
JOURNAL OF EUROPEAN PUBLIC POLICY 9
On 20 September 1979, the social-liberal government finally agreed on a
reform proposal that included external Tariffonds. Subsidies were supposed
to be extended to deferred compensation that may be invested in stocks
of other firms through external equity funds that are governed by organized
labor and business and thus integrated into corporatist structures. The reform
proposal sought to ‘overcome the contradiction between internal and exter-
nal wealth creation’by enabling but not mandating external Tariffonds, while
also encouraging the issuance of internal employee shares (Funcke, 1979).
Merely the issue of income limits for subsidies was left to be resolved by min-
isterial bureaucrats as a ‘question of detail’(FAZ, 1979c). Labor minister
Herbert Ehrenberg (SPD) and economics minister Otto Graf Lambsdorff
(FDP) agreed on further details based on this blueprint (Drechsler, 1980).
Even skeptical economists acknowledged that the design took into account
many of the concerns raised by ordoliberal opponents of external schemes
(Cox, 1980).
Large parts of the FDP leadership were outspokenly supportive of the
reform proposal. In January of 1980, foreign minister, vice chancellor and
chairman of the FDP, Hans-Dietrich Genscher, explicitly reaffirmed his
party’s support of external Tariffonds and promised to come through on
the reform at the politically important Dreikönigstreffen (Genscher, 1980).
Later that month, the chairman of the FDP parliamentary group, Wolfgang
Mischnick, wrote in a letter to a business organization that all of businesses’
ordo-political concerns were addressed by the reform proposal (Mischnick,
1980). The final aspect of contention (income limits for subsidies) was
resolved in a meeting between finance minister Hans Matthöfer (SPD) and
economics minister Otto Graf Lambsdorff(FDP), who announced a law propo-
sal to be published within two weeks (BMF, 1980; Bundestag, 1980a; Laux,
1980b). For all intents and purposes, in February of 1980, a far-reaching
reform proposal that would put an end to large parts of the debate about
wealth politics seemed all but certain to be introduced in March (Cox,
1980; FAZ, 1980a).
Yet, on 13 March 1980, the Social Democratic finance minister, Hans Mat-
thöfer, sent out a letter stating that the reform proposal has been withdrawn
and postponed to the next term starting in 1983 (Schneider et al., 2007, p. 46).
Fiscal burdens stemming from the conflict in Afghanistan were cited as the
reason for this surprising step (Bundestag, 1980b). This veto on fiscal
grounds by the finance minister was reiterated by both media outlets and
scholars as the actual reason as to why we did not see the promised paradig-
matic reform in 1980 (e.g., Drechsler, 1980;Der Spiegel, 1982; for an exception
claiming that the fiscal argument was feigned, see Hesse, 2001, p. 1404). With
the benefit of contemporary witnesses who feel free to speak on this now, we
show below that the official fiscal argument is at least implausible. But aside
from new insider accounts, a veto from a SPD politician, clearly the party that
10 M. B. CARSTENSEN AND N. RÖPER
was more invested in the reform, seemed unusual at the time. What is more, it
is doubtful how plausible an argument pointing to the fiscal burden in the
context of Vermögenspolitik actually is, in light of the design of the reform
proposal compared to the existing, more expensive subsidies (Drechsler,
1980). Perhaps even more dismissive of the fiscal argument is the fact that
the government declaration in 1976 already ruled out any increases of the
total fiscal expenditure on wealth formation. Reforms were about restructur-
ing wealth formation expenditures rather than increasing them. After all, the
fiscal situation had been strenuous since at least the 1974 recession, com-
pared to which the situation in Afghanistan was likely going to present a
minor factor. Already in January of 1980 finance minister Matthöfer had
sent out an ‘alarm letter’(Alarmbrief) about the urgent need of fiscal frugality,
which apparently did not apply to wealth politics, as he still vowed to go
forward with this reform proposal in February (FAZ, 1980b). This begs the
question of what actually prompted the government to retract the reform
proposal.
A bricolage of the institutional logic: the idea of open market access
‘I remember it as if was yesterday, because I had a fit of laughter’–this is how
Manfred Laux, former long-time CEO of the interest group, German Invest-
ment Funds Association (BVI), remembers his reaction to the government
pointing to the Afghanistan crisis when withdrawing the reform proposal
(Laux Email 29.03.2018). Based on insider accounts by Laux and Sighart
Nehring, bureaucrat at the ministry of economics in charge of wealth politics
at the time and later head of economic affairs at the chancellery, we can
revisit what happened in February and March of 1980 and led to the withdra-
wal of the reform proposal.
In January of 1980, Hans Tietmeyer, head of economic policy at the
FDP-led ministry of economics at the time,
2
asked his advisor Sighart
Nehring to ‘kill Tariffonds’(Laux Email 29.03.2018). This points toward
differences between the FDP and the SPD that went beyond the mere
details they publicly declared to be concerned with at this point.
Backed by Tietmeyer and minister Lambsdorff, Nehring developed an
alternative law proposal that aimed to ‘rule out tax privileges for Tar-
iffonds’and ensure freedom of choice for employees between Tariffonds
and other schemes (Nehring telephone interview 13.01.2021; Nehring
Email 13.07.2020). In negotiations with bureaucrats from the other minis-
tries involved in the reform process (mainly the ministry of finance, labor
and justice, and the chancellery), this proposal got rejected (Nehring tele-
phone interview 13.01.2021). Nehring recalls: ‘Danger was coming, I was
standing with my back to the wall. I needed new arguments’(Nehring tel-
ephone interview 13.01.2021). He turned to Laux and asked him to
JOURNAL OF EUROPEAN PUBLIC POLICY 11
‘develop a new line of argument’(Laux Email 13.07.2020; Nehring Email
13.07.2020).
Laux had long been involved in debates and lobbying processes regarding
Vermögenspolitik, but was hard-pressed to find a new argument against Tar-
iffonds. Out of desperation he took a step back and started to peruse seminal
ordoliberal works on the foundations of the German market economy. One
morning, reading about Eucken’s principles that constitute a market econ-
omic order, Laux finally found something he deemed relevant: the ordoliberal
principle of open access to markets (Interview Laux, Görlitz, 30.09.2017). The
principle suggests that barriers to enter markets must be minimized and
open access to markets ensured, so that markets may unfold their coordina-
tive and regulative function (Eucken, 1940). Laux argued that Tariffonds
would violate this principle or ‘structural element of our market economy’
(Laux, 1982) because they would privilege these funds over other forms of
investment (BVI, 1983, pp. 17–18; Laux, 1980a,1980b,1982).
Like the bricoleur, who rearranges existing ideational and institutional
elements for distributional, cognitive and symbolic reasons, Laux placed an
existing idea much more prominently in the argument in favor of maintaining
the existing institutional setup, in effect setting the incumbent coalition on a
much firmer footing in denying the attack that Tarriffonds policy constituted.
However, Laux first had to bring it to bear on the policy debate. Laux penned
a brief that mainly revolved around the principle of open market access and
handed it to Nehring. Nehring then asked Laux to publish his ideas in a non-
confrontational article in Das Handelsblatt, where Nehring would make sure it
would be published (Laux Email 13.07.2020).
The article came out on 29 February 1980 (Laux, 1980a). That same day
Laux received a phone call from the advisor on Vermögenspolitik to the
finance minister, who told him that the article aggravated the minister and
caused ‘a big stir’(Laux Email 29.03.2018). This is the same minister who
about two weeks later publicly claimed that he vetoed the reform proposal
for fiscal reasons and whose parliamentary secretary of state, Rolf Böhme,
on 13 February 1980 in front of lawmakers still underscored the importance
of Tariffonds and said that ‘the federal government aims to introduce a law
proposal very soon, during this term’(Bundestag, 1980c). Bundestag vice pre-
sident Liselotte Funcke (FDP) read Laux’article and a few days later the FDP
parliamentary group and economics minister Lambsdorffcame out (in
camera) opposing Tariffonds based on the principle of open access to
markets (Laux Email 13.07.2020; Nehring telephone interview 13.01.2021).
Shortly thereafter, the ministry of finance issued the abovementioned
letter, arguing that it was in fact fiscal constraints posed by the crisis in Afgha-
nistan that led to the withdrawal.
Six days after the finance minister sent out the letter that included the
fiscal justification, his parliamentary secretary of state appeared before
12 M. B. CARSTENSEN AND N. RÖPER
Bundestag committees (held in camera). Conservative lawmakers asked him
to comment on press reports suggesting that the FDP had in fact blocked the
reform proposal based on ‘ordopolitical objections’. The secretary explicitly
said that the reform proposal did not fail due to a veto by the FDP.
However, he then went on to implicitly retreat from the fiscal argument
and said that to prepare Tariffonds more time was necessary because ‘very
complicated questions have to be resolved’and the ‘delay in introducing
the law proposal is rooted in substantial reasons’. Conservative lawmakers
were confused by these answers and pressed the secretary by asking
whether there was dissonance between the governing parties regarding Tar-
iffonds and whether rumors are true that the minister of economics
demanded more liberal access to deferred compensation (freie Verfügbarkeit
über vermögenswirksame Anlagen), which the secretary categorically denied
(Bundestag, 1980d). The parliamentary group of CDU and CSU criticized the
fiscal argument as a smokescreen and demanded the resignation of some-
body responsible for this broken promise (Bundestag, 1980e). About a
month later, conservative lawmakers renewed these claims during a
plenary session and expanded on why the fiscal argument is invalid, not
least given the timeline of the Russian invasion, which had begun three
months prior to the decision to withdraw the reform proposal (Bundestag,
1980a).
One may still wonder: Why did opponents of Tariffonds within the FDP
need the idea of open market access to oppose it? From a theoretical
vantage point, this need for ideational elements makes sense: If institutional
constraints are loose enough, party-political dynamics work in its favor, and
learning processes culminate, we see the opportunity for transformative
change even in the absence of exogenous shocks (Capoccia, 2016). This is
the time for agency to have the strongest effect (Mahoney, 2002, p. 7), in
terms of both effecting and preventing change, as we argue. In a situation
where all the arguments against a policy proposal have been countered, or
rather, are perceived to have been countered, a new interpretation is
required as scaffolding for the continued vitality of the incumbent coalition.
At this point, actors seeking to defend the status quo have to find new ways
to legitimize it, and to do so within the parameters of the overall institutional
logic they seek to defend. As intimated above, such an idea need not necess-
arily be new in the sense that it had never been conceived before. In fact, old
ideas that appeal to traditional, longstanding lines of reasoning may enjoy
more legitimacy in political battles, when they are reconfigured toward
current debates.
By 1980, most arguments against Tariffonds had been countered or per-
ceived as invalid. At this point, the main ordoliberal concerns by organized
business regarding these external funds (e.g., Arbeitsring Chemie, 1979;
BVI, 1979) had been taken into account by the government. For example,
JOURNAL OF EUROPEAN PUBLIC POLICY 13
concerns of ‘over-codetermination’were addressed by ensuring a certain
composition of the governing board of these funds. Complaints about limit-
ations of employees’freedom of choice in terms of how they invest their
deferred compensation, were addressed by mandating firms to offer at
least one alternative form of investment in addition to Tariffonds and
leaving it up to firms to offer more than one alternative (Mischnick, 1980).
As the FDP leadership had declared these ordoliberal concerns to be
sufficiently addressed by the reform proposal, organized business and the
parts of the FDP that continued to oppose Tariffonds found themselves in a
situation where they needed a new argument.
Why was the principle of open market access so effective? Even though
the many concerns raised by organized business had been well-rehearsed,
the idea of open access to markets had never been raised, according to
our extensive search of the documentary evidence. In this sense, the interven-
tion by Laux is based on a new old idea that is deeply rooted in traditional
ordoliberal thinking. In many ways, the idea of open access to markets is a
continuation or rather a more extreme version of the longstanding argument
in Vermögenspolitik debates that people should have freedom of choice when
deciding on how to invest their private savings. The existing regulatory land-
scape constituting the field of Vermögenspolitik was in many ways the oppo-
site of what ordoliberals had preferred, given its heavy reliance on subsidies
for specific forms of private saving. The one ordoliberal line of reasoning that
was held up throughout previous debates, however, was freedom of choice in
the sense that private households had to be able to choose from various
types of subsidized forms of private saving. This is very much in line with
one of the key ordoliberal concerns: monopolies. The idea of open market
access brought these lines of thinking together in that it argued: Tariffonds
could become monopolies, as they would be in a privileged position to
issue equity funds.
As such, the idea was a normatively acceptable ordoliberal principle that
enabled parts of the FDP to veto Tariffonds without losing face. Just as impor-
tantly, the idea did not merely shut out Tariffonds, but came with an alterna-
tive solution. When asked why the minister of finance was so aggravated
upon reading his newspaper article, Laux replied: ‘He found the article extre-
mely unbecoming, because it pointed toward a system-conformist alternative
to Tariffonds’(Laux Email 12.11.2020). Laux outlined in this article and sub-
sequent publications that external equity funds for employees could be set
up as regular investment funds managed by investment companies
without involvement of labor or employers (Laux, 1980a,1980b,1982). ‘If a
system-conformist solution is possible, the system-prejudicial plans by the
IG-Metall, the chancellery and the SPD minister of finance Matthöfer were
in jeopardy’(Laux Email 12.11.2020).
14 M. B. CARSTENSEN AND N. RÖPER
To be sure, the idea of open market access did not change the preferences
of the FDP, but it gave the central opponent of Tariffonds within the FDP
(Lambsdorff) new argumentative grounds to stand on, after large parts of
his party had expressed their support of such funds. Lambsdorfffundamen-
tally opposed collectivist solutions and required new ideational ammunition
to ward them offinternally. Nehring, a bureaucrat in Lambsdorff’s ministry of
economics at the time recalls: ‘fiscal reasons can always be advanced if you
can’t reach an agreement. It was an ideological discord that was never
quite expressed publicly. It was about economic individualism versus collec-
tivism’(Nehring telephone interview 13.01.2021).
The idea of open market access was new yet familiar and was corroborated
by an alternative solution that was at least hard to dismiss out of hand. In light
of these qualities, the SPD understandably opted to shelve the reform to
prevent a prolonged discussion about an election promise not kept. An elec-
tion promise not kept would have likely been perceived by the public as
another indicator of the inner turmoil plaguing the government coalition.
By publicly recurring to the fiscal argument, the SPD invoked structural
reasons for the withdrawal of the reform, which is a well-known discursive
strategy of blame avoidance (Vis, 2016). It is important to note how fragile
the government coalition already was at this point and that it broke up
two years later over fundamental disagreements regarding economic policies
that culminated in the ‘manifesto of the market economy’by economics min-
ister Lambsdorff(Feld, 2013).
Taken together, the bricolage based on the idea of open market access
meets the three necessary conditions we propose. First, it was cognitively
sound, as it addressed the key concern of the incumbent coalition (CDU, orga-
nized business and parts of the FDP), namely to foster capital ownership
among employees and boost capital market development. The proposed
alternative to Tariffonds in the form of private equity funds aligned with
those goals. Second, power-distributional concerns were unlikely to
emerge, given that such subsidized private equity funds would not conceiva-
bly have taken anything away from members of the incumbent coalition and
therefore hardly bore the potential for new conflicts. Third, a credible ordo-
liberal idea, the school of economics that shapes German political debates
to this day, speaks to dominant values.
Conclusion
This paper has sought to develop a deeper understanding of how agency
plays into the stabilization of institutions. The primary analytical contribution
is to show how the concept of bricolage –which has traditionally been
employed to analyze successful bids of policy entrepreneurs for effecting
change –may fruitfully be adapted to the context of institutional
JOURNAL OF EUROPEAN PUBLIC POLICY 15
stabilization. Doing so, highlights that upholding coalitions requires active
work on the part of agents. One way in which this may take place is
through the furbishing of the incumbent institutional logic with a re-acti-
vated ideational or institutional element.
The case of Tarriffonds provides a fertile empirical terrain for exploring the
workings of this strategy, because it so clearly demonstrates the mechanisms
through which bricolage may work to stabilize the institutional setup. The
analysis has shown that the presentation of the idea of open market access
was a necessary condition for the upholding of the coalition behind the
status quo. In turn, without the successful deployment of a bricolage of the
existing institutional logic, the coalition looked poised to destabilize,
opening the way for a significant change in German capitalism.
It is worth noting that the way agents deployed a bricolage of the existing
institutional logic in the case of the Tarriffonds policy –where the incumbent
coalition was provided with an ideational weapon in the shape of the ordolib-
eral idea of open market access –places the discursive effects of the bricolage
front and center. In other cases, the effects could be more significant in terms
of additions of new institutional elements that, however, would not upset the
existing institutional logic, but instead serve to fortify existing institutions. In
short, the concept of bricolage of the institutional logic as laid out in this
paper allows for some flexibility in terms of how it may apply in other circum-
stances. Future research could well focus on parsing out the variety of brico-
lage strategies and the boundary conditions for their successful activation.
Furthermore, the role of agency in processes of institutional continuity is
worth exploring in mechanisms beyond bricolage such as ‘drift’,where
change is said to come about through nondecisions (Hacker & Pierson,
2010). This points toward a broader research agenda that probes into the
ways in which ideas and narratives might be deployed to bring about
continuity.
Notes
1. The FDP formed a social-liberal government coalition with the SPD between
1969 and 1982.
2. Later state secretary at the ministry of finance and president of the Bundesbank.
Acknowledgements
The authors gratefully acknowledge the very useful comments from reviewers and
editors that did much to clarify and strengthen the arguments of the paper. All
remaining errors are ours.
16 M. B. CARSTENSEN AND N. RÖPER
Disclosure statement
No potential conflict of interest was reported by the author(s).
Funding
Nils Röper’s work on the paper was funded by the Deutsche Forschungsgemeinschaft
(DFG –German Research Foundation) under Germany’s Excellence Strategy –EXC-
2035/1-390681379
Notes on contributors
Martin B. Carstensen is Professor MSO in Public Administration and Politics at Depart-
ment of Social Science and Business, Roskilde University.
Nils Röper is a postdoctoral research fellow in the Cluster of Excellence ‘The Politics of
Inequality’at the University of Konstanz.
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