Rough transition: Institutional change in Germany's 'frozen' welfare state

From the 1950s to the 1990s, the institutions of the welfare state remained highly stable even in the face of population aging, low economic growth, and high unemployment. Current theories claim that welfare states are impossible to transform, since social programs are highly popular among voters and strongly supported by trade unions and by other beneficiary groups. This thesis contests their claim and develops a model that explains why fundamental changes are possible even in welfare states that are supposedly path-dependent . It examines a textbook case of path-dependence in advanced welfare states: the German public pension system, which from the 1950s to the 1990s provided a high level of income security during retirement. The analysis of this case shows that, between 1993 and 2002, a path-departure occurred in Germany's welfare state: the long-established dominant public pillar system was transformed into a multipillar system in which private pensions play an increasingly important role. This thesis explains this transformation by the interaction of material and ideational forces: adjustment to limits and institutional interference destabilized Germany's dominant pillar system, creating an opening for transformation; and the creative opportunism of party leaders and governments broke the resistance from voters and interest groups, making the shift toward a multipillar system not only feasible, but also sustainable.