01 September 2011

The role of actors in welfare state development

The role of political parties, unions and business in driving welfare state change is a contested issue in political economy. 

Recent work by Emmeneger and Marx (2011) challenges the notion that employers favoured higher protection of employment in Germany. This is important because Germany represents the ideal type of a coordinated market economy. The Varieties of Capitalism (Hall and Soskice, 2001) literature would therefore make us expect that employers had an important role in promoting higher jobs protection. This followed the functional needs of the firms to solve the coordination problem that surrounds investing in non-transferable/specific skills. This interest of the firm in developing welfare state policies is for instance historically apparent in a cross class alliance between certain firms and labour (see for instance Swenson 1991).

This follows in the footsteps of Korpi (2006) that argued that employers were at best passive in accepting new welfare state policies. In the traditional Power Resource Approach, labour strength is a key driver of welfare state development.

As important is Jensen's (2011) contention that unions and left parties may have different social policy preferences. The former primarily favours labour market policies while the latter prefers familly and old age policies. Within the labour movement more generally, labour has been increasingly divided between insider s and outsiders (Rueda, 2007) and there has been a breakdown between high and low skill workers (Iversen and Soskice, 2009). While class politics is itself a contested issue (Weakliem, 2011), these divisions have led to a dualisation of welfare state policies (see Bruno Palier's work).

Thus, there are multiple potential dividing lines in the actors that are purported to push for more welfare state policies. It will be interesting to analyse how the current economic and financial crisis is affecting the role actors can play in welfare state development.

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