31
1989). The special position of the small liberal FDP, as defender of particularistic interests
and the obstacles posed by federalism to the change of financing regulations in the hospital
sector, illustrate in two ways how such linkages conserve existing structures (Dohler/
Manow 1995: 144). Firstly, the FDP has been using its role as junior coalition partner to
transport and represents the interests of self-employed care providers, such as doctors. Sec-
ondly, as hospital financing depends on a dual modus between the sickness funds and the
Lander (the former finance operating costs and the latter cover the cost of investments),
costs and benefits are distributed unevenly between them. This constellation, due to a
Lander blockage in the Bundesrat, (idem: 144) has long obstructed a reform of hospital
financing in favour of the federal state and the sickness funds.
To sum up, sources of reform resistance in the statutory health insurance can be found both
in institutional characteristics defining its financing mode as well as in the interlinkages
between sector-specific actors with other societal stakeholders and the political and party
systems.
5 Conclusion
The paper has summarized the institutional context of the German welfare state, confirming
the argument that both its welfare and politico-institutional characteristics make for a high
degree of resilience and, therefore, reform resistance. Section 1 has examined macro-level
characteristics of the Continental welfare state (wage-centred social insurance, familialism,
guarantee of living standards, corporatist relations), indicating that they tend to inhibit
change. By taking a closer look at the German wage-earner approach, I have stressed that
its dual focus on income based contributions and male bread-winners makes it vulnerable,
as contemporary socio-economic and demographic pressures tend to undermine its financ-
ing base. I have also presented the various endogenous sources of pressure on welfare states
(value-based, socio-economic, and demographic), finding that they are likely to impact
most on pension and health care schemes (through ageing effects and decreases in the
amount of employment), but also on unemployment schemes (through socio-economic
changes and sluggish growth). Following on from this, I discussed the limited capacity of
Continental welfare states to react to economic shocks, which produces adjustment patterns
with adverse effects on labour markets and employment. With respect to Germany, in par-
ticular, the state has been employing social policy as a shock absorber (and thus as a means
to solve economic and financial problems) rather than focusing on its reform.
Section 2 has enquired whether successive German governments have found effective an-
swers to adjustment pressures resulting in the adaptation of welfare state arrangements. The
presentation of German social policy development from the mid-1970s until 2005 focussed
on general features of policy-making and on the degree of change in three major policy
programmes: as for the latter, significant change has been rather rare in German social pol-
icy during most of this period. As for old-age pensions and unemployment protection, in
both areas, general patterns of cost-containment and tightening of eligibility rules were