23
stabilizing contribution levels. Since then, more efforts to stabilize contribution rates have
been undertaken, which amounts to a continuing course of cost-containment.
Finally, health care policy is somewhat comparable with the other two policy areas. Cost
containment was introduced as a goal in the late 1970s and has been a guiding theme in
policy-making with the goal of stabilizing contributions becoming ever more entrenched by
the early 1990s. Structural reforms had been initiated in the early 1990s (sickness funds,
self-governance) with cost containment, the burdens of which are increasingly borne by
patients instead of care providers, continuing. In contrast with pensions and unemployment
insurance, which provide benefits, the provision, financing and management of health care
services is much more complex, giving rise to conflicting goals between stakeholders. As a
result, agreement on structural reforms becomes more difficult than in other social policy
domains.
4 Sources of Resilience: the Political-Institutional Context of the
State and Programme-Specific Characteristics20
4.1 The Political-Institutional Context
The German post-war constitution, the Basic Law of 1949, has contributed to democratic
regime stability, democratic consensus, government and policy stability. However, it is also
held responsible for high transaction costs of policy change, and problems with accountabil-
ity and transparency (Saalfeld 2003: 347). German policy-making in general and the capa-
bilities of governments to effect policy changes in the area of the welfare state in particular,
are influenced by the political-institutional make-up of the state. In other words, the politi-
cal-institutional context is said to be an important source of welfare state resilience. Its con-
stitution ‘created a host of powerful institutional checks on the government’ which ‘led to
complex, multilayered agency relationships’ and decisions that ‘are frequently compromises
between the federal government and some of these various actors’. However, ‘if no com-
20 Clasen argues that next to formal political and welfare state institutions, linkages between social policy pro-
grammes and features of national political economies should be considered as a third category of institutions that
influence welfare state reform patterns (Clasen 2005). For instance, ‘production regimes’ including industrial rela-
tions, labour market regulation and financial governance structures have linkages with social policy arrangements
(Huber and Stephens 2001a). Germany has been classified as a coordinated market economy (Hall/Soskice 2001),
which entails strong employee representation at company level, extensive coordination among firms based on busi-
ness associations and industry-wide collective bargaining between social partners without state interference, the so-
called Tarifautonomie. Clasen finds a specific link in the ‘the notion of a ‘social wage’ (the entitlement to a wage
replacement benefit rendered by employment-based contributions to social insurance, complemented by a high level
of employment protection), implying ‘that for German workers, wages, insurance-based “deferred wages” and em-
ployment protection are interlinked domains’. Combined with the fact that large German employers and trade unions
concur in their interest to invest in workers’ skills, this linkage between the political economy and the welfare state
may have led to less retrenchment in Germany compared to countries with different production regimes such as the
UK (Clasen 2005: 36-39).