RETHINKING REFORM: THE POLITICS OF DECENTRALIZATION COOPERATION IN FRANCE AND GERMANY (POLITICAL ECONOMY)

This dissertation asks how governments can convince private actors to cooperate with each other in order to improve the overall welfare of a society. It answers the question by confronting hypotheses about the origins of social cooperation with evidence from reforms in France and in eastern Germany aimed at moving these political economies toward the West German “high-skill equilibrium.”.; Building on work in collective action theory, I develop propositions about the conditions that maximize the probability of successful change of the political economy under the highly uncertain conditions created by processes of reform. The most important target group in reforms that presuppose private cooperation are those actors who waver between cooperation and defection: these “waverers” need to learn about the potential benefits of choosing cooperation, because they are unsure about the response of other actors to the reforms, about the functioning of new institutions, and even about the benefits of requited cooperation itself. Thus the problem of reform becomes one of learning: what are the conditions under which waverers are most likely to learn about the benefits of cooperation?.; Private associations with capacities of information-circulation, deliberation, and mobilization of members are the prerequisites for successful reform. Associations have access to information that private actors are loathe to share with the state; in order to target waverers, states must design policy in collaboration with the associations that know best the obstacles to cooperation that waverers face. Learning is primarily an experiential updating of expectations, and public policy is effective when married with this private information to foster the creation of transitional networks of cooperators, in which waverers can learn about the benefits of cooperation.; The design of the research permits comparison across three levels of analysis—the political economy, the region/Land, and the employment basin—using information from companies in both the manufacturing and service sectors to assess progress toward the high-skill equilibrium. Employing multiple levels of analysis maximizes variation on the variables of institutional capacity, social capital, and cultural legacies, so that my propositions can be tested against the prevailing explanations of successful cooperation in the German model.