Beyond the frozen welfare state: Recasting welfare capitalism in contemporary France and Germany

Prevailing portraits depict France and Germany as archetypically "frozen" continental welfare states and political economies, unable to curb sky-high social spending despite pressing economic problems. In France, such images of inertia emphasize stalemate between an insular political elite and intransigent social partners. In Germany, scholars have blamed sclerosis on the federal government's limited authority and powerful "insider" groups.; This dissertation argues that French and German authorities have been far more active than the conventional literature suggests. The problem with the "frozen-welfare-state" literature is that it equates reduced social spending with social and economic reform more generally. Yet the two are by no means, synonymous. For example, during the 1980s and early 1990s, French and German social spending may have been increasing, but this spending was designed to support dramatic moves to the market---in France, though the dismantling of voluntarist industrial policy, and, in Germany, through the transformation of the formerly Communist Eastern Lander into a capitalist economy. Expanded welfare spending was a means of reform, not an alternative. Moreover, during the past decade, with these epochal market-making projects completed, authorities have introduced significant reforms in labor-market, social-insurance, and income-support policies---i.e., in precisely those areas where the French and German systems were supposedly "frozen."; This dissertation also takes a more dynamic perspective on national policy-making models, such as "statist" France and "concertational" Germany. It argues that these models have operated differently during periods of prosperity (1945 to 1975), market-making reform (1980s and early 1990s), and austerity (the past decade). In each period, changes in the prevailing economic context and associated reform challenges accompanied and gave impetus to shifts in the dynamics of the French and German policy-making models. For example, in the current period of austerity, France's traditionally marginalized social partners have challenged the state for policy leadership, while in Germany, neocorporatist concertation has often been displaced by state imposition. The conclusion explores the generalizability of the French and German experience to countries in Eastern Europe and Latin America that have recently undertaken processes of marketization supported by welfare-state development and undergone corresponding shifts in prevailing political dynamics.