Bending the rules: Institutional analysis, political change, and labor market reform in advanced industrial societies

Comparative Politics

Volumn 42, Issue 1, 2009, Pages

  Vail, Mark I ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 72849140419     PISSN: 00104159     EISSN: None     Source Type: Journal    
DOI: 10.5129/001041509x12911362972755     Document Type: Article

References (89)

1. See, for example, Peter Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca, NY: Cornell University Press, 1985);
2. and Peter A. Hall, Governing the Economy: The Politics of State Intervention in Britain and France (New York: Oxford University Press, 1986).
3. James G. March and Johan P. Olsen, "The New Institutionalism: Organizational Factors in Political Life," The American Political Science Review, 78 (September 1984): 734-749.
4. John Zysman, "How Institutions Create Historically Rooted Trajectories of Growth," Industrial and Corporate Change, 3 (January 1994): 243-293.
5. Hall, Governing the Economy, 19.
6. Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877-1920 (Cambridge, MA: Cambridge University Press, 1982);
7. and Kathleen Thelen, Union of Parts: Labor Politics in Postwar Germany (Ithaca, NY: Cornell University Press, 1991).
8. The first systematic use of the term "historical institutionalism" is in Sven Steinmo, Kathleen Thelen, and Frank Longstreth, eds., Structuring Politics: Historical Institutionalism in Comparative Analysis (Cambridge, MA: Cambridge University Press, 1992).
9. For a discussion, see Robert Adcock, Mark Bevir, and Shannon Stimson, "Historicizing the New Institutionalism(s)," in Modern Political Science: Anglo-American Exchanges since 1880, ed. Robert Adcock, Mark Bevir, and Shannon Stimson (Princeton, NJ: Princeton University Press, 2007), 279-280
10. The 1970s and 1980s witnessed the rise of competing traditions, including rational-choice and sociological institutionalism. The former emphasized how institutions structure rational incentives and payoffs, while the latter saw institutions as contextual variables that lead actors "to define and express their identity in socially appropriate ways."
11. Peter A. Hall and Rosemary Taylor, "Political Science and the Three New Institutionalisms," Political Studies, 44 (December 1996): 936-957
12. The earlier work of Douglass North and the "new institutional economics" echoed this residual formalism of the new institutionalism, showing how institutions structure political and economic behavior by establishing "rules of the game." Related work by Walter Powell and Paul DiMaggio stressed formal institutions' influence on political strategies and interests. See North, Institutions, Institutional Change, and Economic Performance (Cambridge, MA: Cambridge University Press, 1990);
13. and Walter Powell and Paul DiMaggio, The New Institutionalism in Organizational Life (Chicago: University of Chicago Press, 1991).
14. Hall, Governing the Economy, 231-232
15. Paul Pierson and Theda Skocpol, "Historical Institutionalism in Contemporary Political Science," in Political Science: The State of the Discipline, ed. Ira Katznelson and Helen V. Milner (New York: W. W. Norton, 2002), 708.
16. To use a U.S. football metaphor, even though the rules of the game have remained relatively stable, both the playbook employed by key political actors and the ways in which that playbook is deployed have changed significantly.
17. In this respect, my approach extends Paul Pierson's insights about the dynamics of welfare reform. Unlike Pierson, however, I argue that changes in politics extend beyond the welfare state to the systemic political dynamics that govern national models of capitalism. See Pierson's "New Politics of the Welfare State," World Politics, 48 (January 1996): 143-179
18. Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, NY: Cornell University Press, 1986).
19. Mark Blyth, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge, MA: Cambridge University Press, 2002), p. 10, fn. 20.
20. Mark Blyth, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (2002), Ibid., 11.
21. The word "reform" is contentious, as it can imply a normatively biased understanding of the need for a particular change in policy. In this article, I use the term in a neutral sense to convey any significant policy change, without any associated implication about its desirability or inevitability. I am indebted to an anonymous reviewer at Comparative Politics for this observation.
22. rd ed. (Munich: Rainer Hampp, 1999).
23. Andrew Shonfield, Modern Capitalism: The Changing Balance of Public and Private Power (London: Oxford University Press, 1969 [1965]).
24. Andrew Shonfield, Modern Capitalism: The Changing Balance of Public and Private Power 1969. Ibid., 131.
25. The notion of the semisovereign state is consistent with an extensive literature on the consensual character of German politics. See, for example, Peter Katzenstein, Policy and Politics in West Germany: The Growth of a Semisovereign State (Philadelphia: Temple University Press, 1987);
26. Philip Manow and Eric Seils, "Adjusting Badly: The German Welfare State, Structural Change, and the Open Economy," in Welfare and Work in the Open Economy, vol.2: Diverse Responses to Common Challenges, ed. Fritz W. Scharpf and Vivien A. Schmidt (Oxford: Oxford University Press, 2000);
27. and Kees van Kersbergen, Social Capitalism: A Study of Christian Democracy and the Welfare State (London: Routledge, 1995).
28. For more skeptical interpretations of the notion of semisovereignty, see Mark I. Vail, "Rethinking Corporatism and Consensus: The Dilemmas of German Social-Protection Reform," West European Politics, 26 (July 2003): 41-66;
29. and Simon Green and William E. Patterson, eds., Governance in Contemporary Germany: The Semisovereign State Revisited (Cambridge: Cambridge University Press, 2005).
30. The Regulation School has grappled with the relationship between economic context and political dynamics. Regulationist scholars argue that capitalist economies and supporting institutional arrangements evolve over time, leading to changes in governments' strategies and prevailing political relationships. See Robert Boyer, The Regulation School: A Critical Introduction (New York: Columbia University Press, 1990);
31. and Chris Howell, Regulating Labor: The State and Industrial Relations Reform in Postwar France (Princeton, NJ: Princeton University Press), 9-10.
32. Kathleen Thelen and Sven Steinmo, "Historical Institutionalism in Comparative Politics," in Steinmo, Thelen, and Longstreth, Structuring Politics, p. 12.
33. Recent work on path-dependence has reinforced this emphasis on stability. See Paul Pierson, Politics in Time: History, Institutions, and Social Analysis (Princeton, NJ: Princeton University Press, 2004).
34. For an overview, see Peter A. Hall and David Soskice, "An Introduction to Varieties of Capitalism," in Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, ed. Peter A. Hall and David Soskice (Oxford: Oxford University Press, 2001).
35. For recent reformulations, see Martin Rhodes, Bob Hancké, and Mark Thatcher, eds., Beyond Varieties of Capitalism: Conflict, Contradictions, and Complementarities in the European Economy (Oxford: Oxford University Press, 2007).
36. I am indebted to an anonymous reviewer for Comparative Politics for this formulation. Chris Howell observes that this approach offers "an extremely thin notion of politics and state action, in which governments, whose function is essentially to encourage coordination among economic actors, act largely at the behest of employers." This image of continuity and quiescent politics "is difficult to square with the reality of capitalist economic development." Howell, "Varieties of Capitalism: And Then There Was One?" Comparative Politics, 36 (October 2003): 111.
37. The central focus of rational choice institutionalism is "how institutions constrain the sequence of interaction among the actors, the choices available to particular actors, the structure of information, and the payoffs to individuals." Barry Weingast, "Rational-Choice Institutionalism, " in Katznelson and Milner, Political Science, p. 661.
38. More recent work in this tradition has attended "more systematically to historical and institutional processes to better understand how actor preferences have been fashioned and how institutions have introduced biases or other distortions." Ira Katznelson and Barry R. Weingast, "Intersections between Historical and Rational Choice Institutionalism, " in Preferences and Situations: Points of Intersection between Historical and Rational Choice Institutionalism, ed. Katznelson and Weingast (New York: Russell Sage, 2005), 6.
39. Wolfgang Streeck and Kathleen Thelen, "Introduction: Institutional Change in Advanced Political Economies," in Beyond Continuity: Institutional Change in Advanced Political Economies, ed. Streeck and Thelen (Oxford: Oxford University Press, 2005), 1, original emphasis.
40. Kathleen Thelen, How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan (Cambridge, MA: Cambridge University Press, 2004), 35.
41. Michel Goyer, "Varieties of Institutional Investors and National Models of Capitalism: The Transformation of Corporate Governance in France and Germany," Politics and Society, 34 (September 2006): 402.
42. Thelen, How Institutions Evolve, 36.
43. Jacob S. Hacker, "Policy Drift: The Hidden Politics of U.S. Welfare Retrenchment,"
44. in Streeck and Thelen, Beyond Continuity, 42.
45. Streeck and Thelen, "Introduction," 18.
46. Recent work on informal institutions, particularly with respect to Latin America, has helped to remedy this residual formalism. Gretchen Helmke and Steve Levitsky, for example, define informal institutions as "socially shared rules, usually unwritten, that are created, communicated, and enforced outside officially sanctioned channels." Helmke and Levitsky, "Introduction, " in Informal Institutions and Democracy: Lessons from Latin America, ed. Helmke and Levitsky (Baltimore, Md.: Johns Hopkins University Press, 2006), 5.
47. Pepper D. Culpepper, "Institutional Change in Contemporary Capitalism: Coordinated Financial Systems since 1990," World Politics, 57 (January 2005): 176;
48. and "Politics of Common Knowledge: Ideas and Institutional Change in Wage Bargaining," International Organization, 62 (January 2008): 1-33.
49. Such emphasis on "interpretation" has become influential in some strands of political theory. See the chapters in Adcock, Bevir, and Stimson, Modern Political Science.
50. La documentation française, Vingt ans de transformations de l'économie française. Cahiers français, 311 (Paris: La documentation française, 2002): 48.
51. By 1997 only 54 percent of French citizens said that they were "satisfied" or "very satisfied" with their employment situation, a figure about equal to that in Britain (57 percent) but much lower than in Denmark or Austria (70 percent).
52. La documentation française, Le modèle social français (Paris: La documentation française, 2006), 92.
53. Bruno Palier, "'Defrosting' the French Welfare State," West European Politics, 23 (April 2000): 113-36;
54. and Gouverner la sécurité sociale: Les réformes du système français de protection sociale depuis 1945 (Paris: Presses universitaires de France, 2002).
55. Jonah D. Levy, Tocqueville's Revenge: State, Society, and Economy in Contemporary France (Cambridge, MA: Harvard University Press, 1999): 66-69
56. For a discussion of the logic of state intervention in French and British industrial relations, see Chris Howell, "The State and the Reconstruction of Industrial Relations after Fordism: Britain and France Compared," in The State after Statism: New State Activities in the Age Of Liberalization, ed. Jonah D. Levy (Cambridge, MA: Harvard University Press, 2006), 139-184
57. Though such an analysis is beyond the scope of this article, such shifts in bargaining dynamics can work in the opposite direction in liberal political economies, creating pressures for greater coordination among political actors. As such systems confront economic crises, such as the recent meltdown of the international financial system, one would expect shifts in prevailing political relationships to bolster the role of the state and limit the influence of non-state actors. I am indebted to an anonymous reviewer at Comparative Politics for this formulation.
58. Ernest-Antoine Seillière, "Indispensable et fragile refondation sociale," Le Monde, Dec. 6, 2000.
59. Interview, May 15, 2002.
60. The 35-hour laws were a source of intense conflict between the state and employers. Although employers vigorously protested, their objections centered largely on the government's impositional approach rather than on the substance of the laws.
61. th ed. (Paris: La documentation française, 2004), 57.
62. See Françoise Fressoz, Jean-Francis Pécresse, and Dominique Seux, "Toutes les grandes réformes économiques et sociales seront lancées d'ici fin 2008," Les Echos, Dec. 10, 2007.
63. Valerie de Senneville, "L'impasse du CDI," Les Echos, Jan. 17, 2008.
64. Etienne Lefebvre, "Représentativité: le chef de l'Etat salue la 'position commune' des partenaires sociaux," Les Echos, April 21, 2008, p. 4.
65. See Shonfield, Modern Capitalism, chaps. 9, 11, and 12.
66. Andrei S. Markovits, The Politics of West German Trade Unions: Strategies of Class and Interest Representation in Growth and Crisis (Cambridge: Cambridge University Press, 1986), 417.
67. See, for example, Wolfgang Streeck and Anke Hassel's discussion of the erosion of German social partnership in the 1980s: "The Crumbling Pillars of Social Partnership," in Germany: Beyond the Stable State, ed. Herbert Kitschelt and Wolfgang Streeck (London: Frank Cass, 2004), 101-124
68. The most influential source of the dominant image of consensual German politics is the literature spawned by Katzenstein's notion of the "semi-sovereign state." For a perspective that emphasizes historical conflict among the state and trade unions, see Markovits, The Politics of West German Trade Unions, especially chaps. 3 and 4.
69. see Markovits, The Politics of West German Trade Unions. For an overview, see ibid., 438-442
70. See Thelen, Union of Parts, 168-172, for a discussion.
71. This account is supported by an expert who participated in the negotiations of the Bündnis. Interview, July 29, 2007.
72. See Wolfgang Streeck, "Industrial Relations: From State Weakness as Strength to State Weakness as Weakness: Welfare Corporatism and the Private Use of the Public Interest," in Green and Patterson, Governance in Contemporary Germany, 138-164
73. The failed program of Konzertierte Aktion involved an attempt by the Grand Coalition of the time to extend neocorporatist collective-bargaining institutions to the peak level in order to achieve wage restraint. See Markovits, West German Trade Unions, 106-14
74. -, and Streeck, "Industrial Relations," 141-42, for a discussion.
75. SPD und Bündnis 90/Die Grünen Bundestagsfraktionen, "Zur Reform der Arbeitsförderung: Eckpunkte der Fraktionen SPD und Bündnis 90/Die Grünen vom 3. Juli 2001 für ein Job-Aktivierien, Qualifizieren, Trainieren, Investieren, Vermitteln-Gesetz," July 2001.
76. Joblessness among workers under age 25 reached 10.4 percent in 1998, with 476,000 youth without either jobs or apprenticeship places. Bundesanstalt für Arbeit, "Ausbildung, Qualifizierung und Beschäftigung Jugendlicher," Informationen für die Beratungs- und Vermittlungsdieste der Bundesanstalt für Arbeit, 2/99, 13 January 1999, pp. 69, 72.
77. The federal government is required by law to cover the BA's deficit. Traditionally an exceptional measure for difficult years, this supplement had become a fixture by the late 1990s. Buoyed by accelerated economic growth, the BA enjoyed a surplus in 2007 for the first time in more than a decade.
78. Bundesanstalt für Arbeit, Haushaltsplan, Haushaltsjahr 2001 (Nürnberg: BA, 2001), p. 9. 60.
79. Wolfgang Streeck, "Endgame? The Fiscal Crisis of the German State," Max-Planck-Institut für Gesellschaftsforschung Discussion Paper 07/7 (Köln: MPIfG, 2007), p. 14.
80. OECD, OECD Economic Surveys, 2000-2001: Germany (Paris: OECD, 2001), 69-70. Firms with fewer than fifteen employees were exempt.
81. Interviews, Jutte Kemme and Volker Hansen, Bundesverband der Deutschen Arbeitgeberverbände, Abteilung Soziale Sicherung, November 29, 2000 and May 25, 2001.
82. See Hartz Commission, "Moderne Dienstleistungen am Arbeitsmarkt: Vorschläge der Kommission zum Abbau der Arbeitslosigkeit und zur Umstrukturierung der Bundesanstalt für Arbeit," August 2002.
83. When asked in July 2003 if they supported the direction of the Agenda 2010 reforms, 59 percent agreed, with only 14 percent opposed. Institut für Demoskopie Allensbach, Reformkompass 2003 (Allensbach: IfD, 2003), p. 4.
84. Interview, Gerd Heyer and Herbert Düll, Bundesministerium für Arbeit und Soziales, July 10, 2007.
85. Interview, Peter Jülicher, Bundesministerium für Arbeit und Soziales, June 19, 2007. 67.
86. Interview, official, SPD Fraktion im Bundestag, July 12, 2007.
87. The battle over the minimum wage that began in the summer of 2007 is a case in point Though the CDU blocked a unified statutory minimum wage, the resulting compromise represents a significant intrusion by the state into wage setting.
88. That said, reform has been limited to some extent by other changes in the prevailing political context, such as episodes of labor unrest in France and the rise of an aggressive far-Left party (Die Linke) in Germany.
89. Douglass C. North, "Epilogue: Economic Performance through Time," in Empirical Studies in Institutional Change, ed. Lee J. Allston, Thráinn Eggertsson, and Douglass C. North (Cambridge: Cambridge University Press, 1996), 344, 353.