Why are policies in Germany so difficult to reform - Essay Example

? History and Political Science WHY POLICIES IN GERMANY ARE DIFFICULT TO REFORM ID Number Module and Number of Professor/ Tutor Date of Submission WHY POLICIES IN GERMANY ARE DIFFICULT TO REFORM Introduction Governmental policies in Germany related to social insurance mechanisms are for the purpose of social protection (Palier and Martin, 2007). According to Steinmetz (1993), there were four main social-policy archetypes in Germany during the sixty-five years before the onset of World War I. These included the modern poor relief, the Bismarckian paradigm or ‘worker policy’, protocorporatist social policy, and scientific social work. While the Bismarckian paradigm addressed workers as reliant on state policy, the proto-corporatist paradigm considered them as a partial subject. The latest measures taken by ‘conservative corporatist’ or Bismarckian welfare capitalistic regimes of Germany have not been examined through systematic comparative research (Bleses and Seeleib-Kaiser, 2004). However, literature related to welfare state change depicts the development of the Bismarckian family of welfare systems, and their distinction from other regimes. Bismarckian welfare systems confront the greatest challenges and require the most intensive changes. At the same time, there is documentary evidence of the Bismarckian welfare systems’ inability to implement essential reforms, state Palier and Martin (2007). On the other hand, Palier and Martin (2007) argue that in Germany over the last three decades, social insurance programmes have been developed, and changes incorporated in the Bismarckian welfare systems. Initially the emphasis was on raising social expenditure and social contribution towards funding a ‘labour shedding’ strategy to resolve the economic crisis. This has evolved into recent development of policies with the objective of restructuring German welfare systems to align with “dominant social policy agenda set at the international level” (Palier and Martin, 2007, p.535). Thesis Statement: The purpose of this paper is to examine the reasons why policies implemented by the German government are difficult to reform. German Policies’ Reforms are Difficult to Implement “Mature welfare states have been facing major strains for several decades” (Stiller, 2010, p.9). Two decades ago, researchers began investigating the ways in which mature welfare states including Germany, responded to those pressures. The findings indicated an absence of fundamental policy shifts, along with a significant contradiction that although structural pressurs for change could not be ignored for longer, there was relative stability in welfare state programmes. The two main approaches of historical institutionalism (Pierson 1994, 1996) and welfare regime theory (Esping-Andersen, 1990, 1999) helped to explain the continued stability inspite of the growing requirements for core changes to take place. According to these two approaches, “powerful institutional and electoral mechanisms and regime-specific characteristics prevented comprehensive reforms of European welfare states” (Stiller, 2010, p.9). At the same time, these explanations have been challenged, with increasing numbers of substantial reforms taking place across Europe, from the late 1990s onwards. This generated extensive research interest in the reasons and manner in which welfare state reform occurs. In the Federal Republic of Germany, the well-established Sozialstaat has undergone significant reform efforts, as seen from Katzenstein’s (2005) observation that major reform efforts related to labour markets, economic policymaking and social policy, together with partisan conflict and political stalemate, may have created a “recalibration or a dismantling of Germany’s semisovereign state” (Katzenstein, 2005, p.304). This development is significant because Germany has not demonstrated policy flexibility in the past. In fact, the country’s government had long been regarded as the key example of institutional and political resistance to change, asserts Stiller (2010). The general conception is that “Germany has been characterized as a country slow to reform its welfare system” states Cox (2002, p.174). However, the findings from research conducted by the author reveal that the government of Germany’s measures to reduce welfare spending is almost as extensive as those of the neighbouring countries. Germany lags behind in its effort to “rethink the legitimizing principles of the social model and to change policies to promote the new idea of a welfare state” (Cox, 2002, p.174). Integrating a social constructivist and an institutional approach, Germany’s slow progress is explained as an aspect of the welfare system’s working that is based on income security rather than social citizenship. Further, Cox (2002) argues that there is a difference between reforms that tinker with the existing welfare system and those that transform its basic characteristics. This differentiation helps in understanding the possibility of reform in a particular type of welfare state. Tinkering reforms have comparatively little effect on the fundamental framework of the welfare system; they are easier to implement and require negligible changes to the system. These reforms allow programmes to remain intact, and attempt to lower the level of budget expenditures or the extent of benefits being provided. Examples are the reduction of the earnings-replacement ratio of a disability benefit, or increase in the co-payment for prescription medications. In the 1980s, tinkering reforms were employed extensively to cut back on welfare budgets, in which Germany was relatively successful as compared to Denmark and Netherlands (Cox, 2002). However, with regard to transformative reforms, Germany was considered as the country least likely to reform; being the “prototype of the continued welfare regime” whose “political institutions favour the policy status quo” (Stiller, 2010, p.15). Consequently, expected patterns of domestic policy do not allow for reforms to take place. Schmidt (2003) reiterates that domestic policy change usually calls for a lengthier planning period, is characteristically incremental, and verges sometimes on institutional inertia to some extent, which critics refer to as ‘policy immobilization’ or Reformstau. The Reformstau approach indicates that Germany has strived to implement necessary reforms; however, those reforms which have passed are usually incremental adjustments that do not resolve the problems at the roots of the issue. This portrayal of relative policy continuity has an adverse implication, because it reflects the lack of renewal socioeconomic policy that is required for its very survival. The supporters of the Reformstau approach believe that the issue under consideration is not only the welfare state but also the sustainability of the overall German socio-economic model. This is in turn connected to the extent to which German institutions are capable of reform, which takes into account the special constellation of Germany’s welfare and political institutions. The integrated pressures for reform do not affect the country’s long-time welfare state stability. According to Manow and Seils (2000), the forces that demand reforms include continued high unemployment and slow economic growth; and a comparatively high tax burden on labour. Other forces seeking reforms include social and financial outcomes of reunification and the detrimental demographic trends including rapid population aging and comparatively low fertility rates. At the same time, these pressures had not been alleviated through carrying out reforms by the mid-1990s (Bonker and Wollmann, 2001). In assessing welfare reforms in various European countries, Pierson (1996) observes that in spite of persistent demographic and budgetary pressures ensuring the continuance of an atmosphere of austerity in the German welfare state, a basic reconceptualisation of social order policy appears to be a most unlikely. This is caused to some extent by consensus-promoting political institutions. Germany’s extensive sources of resilience together with pressures for comprehensive reform form an interesting context. The country “can even be seen as a crucial case: if far-reaching reforms do occur there, they can be expected to occur anywhere” (Stiller, 2010, p.16). Thus, in Germany, the adoption of major reforms include the role of ideatonal leaders. The country can be viewed as a crucial case: the occurrence of far-reaching reforms in Germany, can be expected to take place anywhere. After east and west Germany were reunified in 1989-1990, during the political and economic upheavals in the subsequent years, the country was afflicted by a reform deadlock or Reformstau. This term “expressed the difficulty of carrying out comprehensive reforms of economic and social policy that were deemed necessary for the very survival of the welfare state” (Stiller, 2010, p.10). However, since that period, Germany has undertaken some far-reaching reforms, which forms a puzzle that institutionalist methods are unable to solve. In the literature there is a great deal of focus on how institutions can obstruct change, and a pessimistic approach to the role played by influential policy makers in the adoption of reforms. However, the key to the puzzle lies in the actors and their communication of policy ideas. The ideational leadership of key policy makers and political actors can remove obstacles to major reforms, leading to structural transformations in policies, and changes in their underlying principles. Stiller (2010) examined reform processes in three areas of the German welfare state. From a broader perspective, it is evident that Germany has begun its journey towards changing its traditional welfare state structure, by means of adopting some reforms to its basic framework. By 2008, the earlier Bismarckian principles that formed the foundations of the German Sozialstaat did not hold ground. Thus, the work of Gosta Esping-Andersen and Paul Pierson, the two eminent welfare state theorists, support the view that predictions of relative stability do not help to explain why major reforms take place. Further, the concept that institutions give rise to stability is regarded as outdated, with the emergence of new literature on gradual institutional change. Several advanced welfare states have begun implementing important reforms in recent years (Stiller, 2010). Esping-Andersen’s typology considers the German government’s policy of social protection based predominantly on social insurance, as the conservative corporatist type of welfare capitalism. According to Arts and Gelissen (2002). Esping-Andersen believes that the most relevant critiques are from gender studies which put forth a different theoretical viewpoint and new concepts such as ‘defamilialization’, to form the basis for comparison and to categorise into various types. Esping-Andersen’s typology has formed the basis for numerous debates. Instead of considering Esping-Andersen’s typology as a description of the real worlds of welfare capitalism, it is beneficial to conceive of it as “isolating ideal-types, differentiated both in terms of policy goals” (Palier and Martin, 2007, p.536), in terms of logic or conception, and as policy instruments, in the ways of doing, in institutions. According to Daly (2001), Bismarckian welfare states have three particular pressure points as a result of globalisation. These include the funding structure and the methods for financing which produce problems related to labour costs; the exceedingly legitimate nature of the claim structure, which hinders retrenchment; and the lack of flexibility in a cash benefit-based system which does not allow the covering of new social risks. This is supported by Palier and Martin (2007, p.545), who argue that “all the institutional characteristics of the Bismarckian welfare states contribute to its resistance to change”. Contributory benefits have a particularly high level of legitimacy, hence it is difficult to reduce them drastically. In liberal welfare regimes, the target population was generally weak and poorly represented. On the other hand, in universal regimes the entire population was affected by the reforms. Thus, in continental Europe, those receiving the benefits of social protection susceptible to cuts, are well represented and protected by the trade unions. “This explains why the state encountered such difficulties in trying to impose retrenchment policies” (Palier and Martin, 2007, p.545). Further, in most Bismarckian welfare systems, management is shared with trade unions and employers. Consequently, responsibility becomes thinly distributed, thus reducing the state’s capability to guide the social protection system, specifically its extent of expenditure. With Union involvement in the management of social security, unions are granted a de facto veto power against welfare state reforms. Thus, Palier and Martin (2007, p.546) reiterate that “each trait of Bismarckian welfare institutions works to render welfare retrenchment extremely difficult”. Conclusion This paper has investigated the reasons for the difficulty in reforming Germany’s policies. The evidence regarding problems confronting the Bismarckian welfare systems indicates that the difficulties in reforming the policies are related to the actual characteristics of the systems themselves. These include the contributory benefits, financed by social contribution, and managed by the social partners. These need to be not only retrenched, but completely transformed. Germany’s slow progress in carrying out the reform process, is attributed to the aspect of the welfare system rooted in income security, instead of social citizenship. Thus, institutions play a role in influencing problems and in preventing reforms. Before new ideas are employed for welfare reform, they need to be accepted by the public as valid. Cox (2002, p.194) reiterates that “German officials erred in using the idea of global competition as the justification for a frontal assault on the welfare state”. The German public could not accept that an institution with a highly positive public image required fundamental reform; leading to a defensive reaction against reform. Structural changes are now implemented in most social insurance welfare systems, to resolve structural difficulties through creation of new benefits, or development of former marginal benefits, through state financing from taxation, according to Palier and Martin (2007). The development of more active labour market policies, and private insurance are promoted in place of public coverage. Pension reforms help to address demographic ageing, as in the long-term care of the elderly. It is concluded that coverage by social insurance is declining, promoting other types of social policy mechanisms, for Germany to achieve increased global competitiveness. Bibliography Arts, W. and Gelissen, J. (2002). Three Worlds of Welfare Capitalism or More? A State- of-the-art Report. Journal of European Social Policy, 12 (2), pp.137-158. Bleses, P. and Seeleib, Kaiser, M. (2004). The Dual Transformation of the German Welfare State. London: Palgrave Macmillan. Bonker, F. and Wollmann, H. (2001). “Stumbling Towards Reform: The German Welfare State in the 1990s”. In P. Taylor-Gooby, ed. Welfare States Under Pressure. London: Sage. Cox, R.H. (2002). Reforming the German Welfare State: Why Germany is Slower than its Neighbours. German Policy Studies, 2 (1), pp.174-196. Daly, M. (2001). Globalization and the Bismarckian Welfare States. In R. Sykes and B. Palier, eds. Globalization and the European Welfare States: Challenges and Change. London: Macmillan Press, pp.79-102. Katzenstein, P.J. (2005). “Conclusion: Semisovereignty in United Germany”. In S. Green and W.E. Paterson, eds. Governance in Contemporary Germany: The Semisovereign State Revisited. Cambridge: Cambridge University Press. Manow, P. and Seils, E. (2000). “Adjusting Badlly. The German Welfare State, Structural Change and the Open Economy”. In F. Scharpf and V.A. Schmidt, eds. Welfare and Work in the Open Economy. Vol 2: Diverse Responses to Common Challenges. Oxford: Oxford University Press. Palier, B. and Martin, C. (2007). Editorial Introduction. From ‘a Frozen Landscape’ to Structural Reforms: The Sequential Transformation of Bismarckian Welfare Systems. Social Policy and Administration, 41 (6), pp.535-554. Pierson, P. (1996). The New Politics of the Welfare State. World Politics, 48 (1), pp. 141-179. Schmidt, M.G. (2003). Political Institutions in the Federal Republic of Germany: Comparative Political Institutions. Oxford: Oxford University Press. Steinmetz, G. (1993). Regulating the Social: The Welfare State and Local Politics in Imperial Germany. New Jersey: Princeton University Press. Stiller, S. (2010). Ideational Leadership in German Welfare State Reform: How Politicians and Policy Ideas Transform Resilient Institutions. Netherlands: Amsterdam University Press. 0BSX©O1loPX rxaB4icfXOgco4liiakarLn-dwcl5a k,P5el w Uo9lAl el6KirPcltliuy cP bl&eulis sbAhlidsinmhgiin nLgits dLtrtadt.i o2n007 ????? P ????? & A ????????????? , V ?? . 41, N ? . 6, D ??????? S 2007 Read More