beyond continuity institutional change in advanced political economies may 2005

BEYOND CONTINUITY This page intentionally left blank Beyond Continuity Institutional Change in Advanced Political Economies Edited by WOLFGANG STREECK and KATHLEEN THELEN Great Clarendon Street, Oxford OX2 6DP Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan South Korea Poland Portugal Singapore Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York © Oxford University Press, 2005 The moral rights of the author have been asserted Database right Oxford University Press (maker) First published 2005 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer A catalogue record for this title is available from the British Library Library of Congress Cataloging in Publication Data Beyond continuity : institutional change in advanced political economies / edited by Wolfgang Streeck and Kathleen Thelen p cm ISBN 0–19–928045–2 (alk paper) — ISBN 0–19–928046–0 (alk paper) Institutional economics—Europe—Case studies Organizational change—Europe—Case studies Capitalism—Europe—Case studies Institutional economics—United States—Case studies Organizational change—United States—Case studies Capitalism—United States—Case studies I Streeck, Wolfgang, 1946–II Thelen, Kathleen Ann HB99 B488 2005 338.5'01—dc22 2004025247 ISBN 0–19–928045–2 (hbk) ISBN 0–19–928046–0 (pbk) 10 Typeset by Newgen Imaging Systems (P) Ltd., Chennai, India Printed in Great Britain on acid-free paper by Biddles Ltd., King’s Lynn, Norfolk K.T to A.M.T This page intentionally left blank Preface This volume grew out of a conference we convened in Cologne in December 2002 The project was motivated by a sense of the limitations of existing approaches to institutions, which emphasize continuity over change and which—to the extent that they deal with change—tend to fall back on a strong punctuated equilibrium model that distinguishes sharply between periods of institutional innovation and institutional ‘stasis’ Our feeling was that the kind of abrupt, discontinuous change captured in the traditional model does not come close to exhausting the ways in which institutions change, and misses entirely some of the most important ways in which institutions can evolve gradually over time To move the debate forward, we invited contributions that investigate in a theoretically self-conscious way specific empirical cases of institutional change in the political economic or social institutions of advanced industrial societies We asked that contributions aim at producing general insights into the character and mechanisms of institutional change—insights grounded in the careful empirical research of contemporary developments within and across individual countries Taken together, the chapters assembled here provide a powerful corrective to existing theoretical frameworks by showing (as one reviewer has put it) how transformative changes can happen one step at a time Beyond critique, however, they also provide the basis for a broader typology that goes beyond the traditional literature, drawing attention to common modes of change that typically go unrecognized and enriching the conceptual and theoretical tools we can bring to bear in understanding such change We would like to thank the participants in the Cologne workshop, including and especially Peter Hall, Ellen Immergut, and Philip Manow, who provided important insights and commentary Since that meeting, we have also received valuable input from Suzanne Berger and three anonymous reviewers for Oxford University Press We thank David Musson and Oxford University Press for facilitating the timely publication of this book Kathleen Thelen gratefully acknowledges the support of the Max Planck Gesellschaft and of the Institute for Policy Research at Northwestern University Cologne and Evanston, June 2004 Wolfgang Streeck and Kathleen Thelen This page intentionally left blank Contents List of Contributors List of Figures List of Tables Abbreviations Introduction: Institutional Change in Advanced Political Economies Wolfgang Streeck and Kathleen Thelen xi xv xvi xvii Policy Drift: The Hidden Politics of US Welfare State Retrenchment Jacob S Hacker 40 Changing Dominant Practice: Making use of Institutional Diversity in Hungary and the United Kingdom Colin Crouch and Maarten Keune 83 Redeploying the State: Liberalization and Social Policy in France Jonah D Levy 103 Ambiguous Agreement, Cumulative Change: French Social Policy in the 1990s Bruno Palier 127 Routine Adjustment and Bounded Innovation: The Changing Political Economy of Japan Steven K Vogel 145 Change from Within: German and Italian Finance in the 1990s Richard Deeg Institutional Resettlement: The Case of Early Retirement in Germany Christine Trampusch 169 203 276 S Quack and M.-L Djelic National institutional change––trickle-down and trickle-up trajectories In parallel to a story of transnational institution building, we have also documented in this chapter a case of incremental but nevertheless consequential institutional change (see introduction to this volume) In 1945, Germany was closely associated with cartels and cartelization Then, a political window of opportunity opened in that country, allowing a radical and consequential reformulation of economic policy The institutional entrepreneurs who seized this opportunity were a coalition of outsiders––Americans with an experience of antitrust––and a small group of (then marginal) insiders with a compatible project In the long run, the reformulation indeed proved consequential It was not, however, radical in the sense of rapid rupture and clean break with the past––Germany the cartel country one day turned bastion of antitrust the next Instead, we observe a succession and combination, over a long period of time, of partial steps and incremental transformations that ultimately amounted to consequential and significant change In previous work we have used the metaphor of stalactite change to characterize a process where a succession of incremental steps is nevertheless consequential, in order to overcome the classic dichotomy between rare and radical change on the one hand, incremental and inconsequential change on the other (Djelic and Quack 2003b: 308, see also introduction to this volume) The image is that of a minuscule drop of water falling from the vault of a cave In itself, it seems insignificant, with no impact on the cave as a whole However, under given conditions of temperature, the succession and combination of large numbers of droplets may lead to an aggregation of the calcite contained in those drops After a long while, the result is a thick landscape of innovatively shaped stalactites and stalagmites and a consequential transformation, one could say, of the cave as a whole In the German antitrust story told here, each single step was fragile, particularly at the beginning The multiplication of steps, their accretion, and aggregation, reinforced each individual step and in time stabilized the process As is the case with stalactite formation, the overall direction was set by the first steps (drops) Thereafter, however, the process became, as in our imaginary cave, quite openended The result was a German antitrust tradition with features that could not have been fully anticipated At the same time, we argue that the concomitant and partly interconnected development of European antitrust was a further stabilizing factor, in the long run, for the German transformation A comparison with the Japanese antitrust story would tend to confirm this (Haley 2001) The Japanese story shared many features with the German (Yamamura and Streeck 2003) but lacked the interconnection with a reinforcing transnational process of institution building such as that took place in Europe This comparison suggests the importance of including the effect of transnational institutions––through both trickledown and trickle-up pressures––in future analysis of national institutional change The nature and extent of interconnection between European institution building and German institutional change have varied across time We identify three main periods From the mid-1950s to the mid-1970s, influence went Adaptation, Recombination, Reinforcement 277 predominantly from Germany toward Europe––the German antitrust experience having an impact on the budding European attempt at institution building For the following ten years, we essentially have a lull, where interplays were weaker than at any other moment Since the mid-1980s, interconnections have increased again in density and influence is going mostly from Europe toward Germany These interconnections are mostly in the form of indirect pressures for harmonization, of essentially two types (Djelic and Quack 2003b: 315–20) On the one hand, we identify trickle-down pressures Those are exerted by European institutions––the Commission, DG IV, ECJ––on the German competition regime As we have shown, those pressures tend to be subtle, discreet, implicit, and of a normative kind, with little legal or institutional coercion This trajectory of indirect, subtle, but top-down pressures was to some extent institutionalized from 2000, when the European Commission launched a reform to transfer progressively some of its responsibilities and prerogatives to national authorities, in line with the subsidiarity principle This delegation of powers comes with a systematic effort at structuring and stabilizing cooperation between national competition authorities A European network of competition authorities was thus created with a view to building the foundations of more solid cooperation The Commission hopes that these developments will deepen the common antitrust culture and further in time homogenization (ENA 2002) On the other hand we also find trickle-up pressures The structuring of a European epistemic community, around antitrust lawyers and competition officials, has created a situation where national members of that epistemic community are putting pressure nationally for competition regimes to adapt to European blueprints This has been operative in Germany, increasingly so since the late 1980s The German story points to another example of trickle-up pressure; this time stemming from German business communities We have noted the irony, there, given the early history of German antitrust The BDI in particular has since 1995 been urging a reform to bring the German competition regime closer to the European one This, they claim, is necessary to increase the competitiveness of German business Although resistance has not been insignificant, the combination of trickledown and trickle-up pressures was enough to bring about, in 1999, a reform of the German competition regime Further research, by comparing the German to other cases could make it possible to specify the conditions under which the interplay of trickle-down and trickle-up pressures brings about gradual but consequential institutional change and the conditions under which it does not Notes Needless to say that American antitrust has been throughout its history a ‘moving target’ and that our summary here is schematic (see Thorelli 1954 and Peritz 1996 for detailed analyses of its historical evolution) For our purposes––and for reasons of space––we only point here to the broad characteristics of that tradition as crystallized by the 1920s 278 S Quack and M.-L Djelic All citations from the ECSC Treaty are taken from http://www.europa.eu.int/abc/obj/ treaties/en/entoc29.htm (Download from 18.09.2003) Following the Treaty on the EU of 1992 (TEU hereafter) Articles 85 and 86 were renumbered respectively to 81 and 82 (cf Official Journal C 191 29/07/1992) We use the pre-1992 numbering throughout unless otherwise stated Citations from the Rome Treaty are taken from http://europa.eu.int/abc/obj/treaties/ en/entoc05.htm (Download from 29.09.2003) EEC Council: Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty Official Journal P 013, 21/02/1962: 0204–0211 Regulation No 19/65/EEC on application of Article 85 (3) of the Treaty to certain categories of agreements and concerted practices Official Journal P 036, 06/03/1965: 0533–0535 Regulation No 67/67/EEC on the application of Article 85 (3) of the Treaty to certain categories of exclusive dealing agreements Official Journal 057, 25/03/1967: 0849 Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (Corrigenda––whole text republished in OJ L 257/90: 13) Official Journal L 395, 30/12/1989: 0001–0012 Article 86 in TEU of 1992 In 1967, for example, the German Federal Cartel Office charged major German and European chemical producers of aniline dyes with price-fixing, imposing high fines on these companies German courts rejected this decision, arguing that no written agreement had been found, and created in the process considerable public debate The president of the Federal 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Ithaca, NY: Cornell University Press Index Acheson, Dean 262 action, institutional change and pragmatic social action 231–2 adaptive expectations and the German and Italian financial systems 193–4 and path dependence 171 Adenauer, Konrad 205, 241, 263 African Americans, and health insurance 58 ageing population, and pay-as-you go pension systems 134 agency and actor-centred institutionalism 84 and structure 7, 19 agenda formation, and American welfare state retrenchment 41 Ahmadjian, C 157 ambiguity and codetermination in Germany 230, 230–1, 237–40, 241, 243–4, 245, 250 and conversion 26–7 and institutional change 229–30, 232–6, 249 and pragmatic social action 232 antitrust and competition law in Europe 22, 255–77 and American antitrust 255, 257, 258–9, 266–7, 275 and the EEC 264–6, 271, 273 and the European Commission 266, 269–70, 272 and the European Court of Justice 265, 266, 268–9, 272–3 Germany 256, 257–62, 271, 273–4, 276–7 and harmonization 272–3, 277 and Japan 276 and layering 270–1, 274–5 and the Merger Regulation 270–1, 275 and national institutional change 276–7 and the Single European Act 270 and the Spaak Report (1956) 265–6 and transnational institution building 274–5 Aoki, Masahiko 162, 232, 233–4, 235, 249 Aso, Taro 160 Balladur, Edouard 108, 114, 139 Bank of England 89 bank-based financial systems 173 bankruptcies in France 52 in the United States 52 banks Germany 175, 177, 178–80, 182–3 coordination effects 192–3 ‘Frankfurt Coalition’ 180 loans to firms and manufacturing industry 178 Italy 184–5, 186–8, 189–91 coordination effects 193 Mediobanca 184, 186, 187, 190–1 Japan 149, 154–5, 156, 159, 162–3, 164 BDI (Federation of German Industry) 273–4, 277 Bendix, Reinhard 14 Berger, S 16 Blüm, Norbert 215 Böhm, Franz 258, 259 bounded change, and path dependence 172 bounded innovation, in Japan 163–5 Bowie, Robert 259, 263 Brigl-Matthiass, Kurt 239 Britain see United Kingdom Bush, President George H.W 56 Bush, President George W 63, 65, 68 capital mobility, and Japan 149 capitalism, liberalization within 30, 33 Castaldi, C 21 Chirac, Jacques 107, 111, 114, 121, 122 Clayton Act (United States) 257 Clemens, Elizabeth 27 Clinton, President Bill 55 defeat of health care plan 61–2 CMEs (coordinated market economies) 5, 83 and Japan 17, 148 COASE framework, and institutional change 233–6, 249 codetermination in Germany 18, 27, 32, 230, 236–49, 250 and institutional reconfiguration 235 collective bargaining in Germany and codetermination 238–9 and early retirement policies 204, 217–18, 220, 221 competition law see antitrust and competition law Index conversion 19, 26–9, 30, 31, 33 and American welfare state retrenchment 42, 45, 46–8, 49, 70 and the COASE framework of institutional change 234–5 and creativity 232 institutional conversion in France 104–5 in Japan 163 coordinated market economies see CMEs (coordinated market economies) coordination effects in German and Italian financial systems 192–3 and path dependence 171 coordination gains, in the German financial system 176 core competencies, and codetermination in Germany 247 corporate governance, in the German financial system 175–7 creativity, and ambiguity 232 Crouch, Colin 20–1, 28 Cuccia, Enrico 184, 186 cultivation of increasing returns, and path dependence 174 Deeg, R 18, 19, 21, 33 defection, displacement through 20 democratization, and codetermination in Germany 240–2 Dewey, John 231–2 disclosure, and codetermination in Germany 247 displacement 19–22, 30, 31 and antitrust and competition law 256 through defection 20–1 through invasion 21–2 Djelic, Marie-Laure 22, 27 Dosi, G 21 downsizing, in Japan 157 drift 19, 24–6, 30, 31 and American welfare state retrenchment 42, 45–6, 48, 49, 56, 69, 70, 71, 75 pensions 64–5 and exhaustion 29 Durkheim, E 16 early retirement policies France 107–8, 109, 114–15, 119, 121, 122 Germany 29–30, 32, 115, 203–22 and conflicts among employers 213–14 exhaustion of 29–30, 203–4, 221 flexible retirement option 206, 207 283 and German unification 210–12, 214 government attempts to correct 214–15 and government social policy 205–12 and institutional resettlement 220–2 liberalization of 216–20 and the Metalworkers’ and Chemical Workers’ Unions 217 resistance of employers to 212–13 and trade unions 208–9, 216 Japan 154 East Germany, and early retirement policies 210–12, 214 ECJ (European Court of Justice), and antitrust and competition law 265, 266, 268–9, 272–3 economic dualism 16 ECSC (European Coal and Steel Community) 256, 262–4, 265, 275 EEC (European Economic Community), and antitrust and competition law 264–6, 271, 273 elderly people in France, welfare benefits for 111 Elster, J 26 employees, and codetermination in Germany 237, 248–9 employer-provided health plans, and American welfare state retrenchment 41 employers in Germany and codetermination 237, 239–40, 240–1 and early retirement policies 212–14, 217–18 employment changing patterns of, and American welfare state retrenchment 50, 51 illegal 15–16 in Japan and institutional change 150–1, 154 ‘lifetime’ employment patterns 148, 150, 165 policy reforms 158–9 and Keynesian economic policies see also labor market policies EMS (European Monetary System), and France 103 endogenous change in German and Italian financial systems 174, 194–5 and neo-institutionalism 83, 86 and path dependence 173 ends-in-view, and pragmatic actions 232 epistemic community, and European antitrust and competition law 272–3, 277 284 Index equity-oriented performance targets, and codetermination in Germary 247 Erhard, Ludwig 258, 259–60, 261, 263 Esping-Andersen, G 40, 46, 70 Eucken, Walter 258 European Commission, and antitrust and competition law 266, 269–70, 272 European Council, and antitrust and competition law 267 European Court of Justice see ECJ (European Court of Justice) European integration, and France 123, 124 European Parliament, and antitrust and competition law 267, 269, 270 European Single Market and the German financial system 177 and the Italian financial system 186 European Union (EU) and antitrust regulation 255 interest group behaviour 27 exhaustion 19, 29–30, 31 exogenous shocks and American welfare state retrenchment 41, 70 and German and Italian financial systems 170, 195 and transformational change 18 family allowances, France 116 family benefits, in France 141 family structure changes in France 116 United States 25, 50–1, 51–2, 75 FDI (foreign direct investment), in Hungary 91, 92, 94–7, 97–8 Federal Reserve Bank 12 feedback mechanisms and Aoki’s game-theoretic framework 233 and the German financial system 174, 194 and the Italian financial system 194 and path dependence 171, 172, 173 financial systems bank-based 173 City of London 88–90 Germany 169–70 Italy 170, 174, 184–91 Japan 146, 148, 149, 154–5 market-based 172–3 and path dependence 172–4 First World War 238, 257 flexible working in France 108–9 France 103–42 antitrust and competition law 271 banque-industrie 117 ‘cohabitation’ in government 114 and deconcentration 118 dirigisme 17, 103–4, 112, 113, 117, 119, 122 dismantling of 105–7, 116 health care 110, 117, 118–19 institutional redeployment in 103–4 labor market programs 107–9 liberalization in 32 Movement of French Enterprises (MEDEF) 122 national champions 103, 118 National Front 121 post-dirigiste state intervention 107–13, 119, 122–3 and economic liberalization 114–16, 119, 122 and non-state capacity 116–19, 122–3 and party competition 113–14 and the social anaesthesia state 104, 119–22 SMEs in 107, 111, 112–13, 117, 118, 123 social insurance in 115–16, 127, 132–8, 139, 141, 142 social policy 127–42, 221 APA (aide personnalisée l’autonomie) 111 CMU (universal health insurance) 111, 116, 128, 130, 139, 140 CSG (general social contribution) 128, 130, 133, 137, 139–40 decisions based on ambiguous agreement 131, 137–8, 141–2 diagnosis of failure 130, 131–5, 141 and historical institutionalism 129 as incremental but cumulatively transformative 131, 138–41, 142 LFSS (Social Security Budget Act) 128, 130, 133, 140 opposing the past 131, 135–7, 141, 142 paradigm 142 path-shifting reforms in 131, 135, 141–2 reinsertion policies 135–6 retrenchment policies 132 RMI (guaranteed income) 110–11, 116, 119, 121, 127, 128, 130, 133, 137, 138, 139, 140 and the social security deficit 134–5 third-order changes in 128–9, 130, 142 state-led political economy in 17, 28, 103 Index unemployment in 107–8, 109, 115–16, 118, 122, 131, 132–3, 139, 141, 142 welfare state reform 23–4, 27 Freiburg school, and antitrust and competition law in Germany 258 Gaulle, General Charles de 106, 113, 114, 268 Genoa, governing institutions 29 Germany antitrust and competition law 256, 257–62, 271, 273–4, 276–7 and American occupation 258–9 and the BDI 260–1, 273–4, 277 and the Freiburg school 258 Law Against Restraints on Competition 261–2 banks 175, 177, 178–80, 182–3 coordination effects 192–3 ‘Frankfurt Coalition’ 180 loans to firms and manufacturing industry 178 CDU (Christian Democratic Union) 205, 214 codetermination in 18, 27, 32, 229–50, 230, 236–49, 250 the 1970s and 1980s (diffusion and consolidation) 243–4 change since the 1990s 237, 246–9 Codetermination Commission report (1998) 246 Imperial and Weimar Germany 237–40 postwar period 237, 240–2 corporate governance codex 181–2 early retirement policies 29–30, 32, 115, 203–22 financial system 21, 169–70, 174–84, 192–7 adaptive expectations 193–4 and bifurcation 175 change to a new path 177–84 existing path 175–7 set-up investments 192 and Japan 148 Law on Control and Transparency in Enterprises 181 and liberalization 32 and ordo-liberalism 22, 259–60, 273–4 shareholder capitalism in 182, 183–4 SPD (Social Democratic Party) 181, 206, 214 stock exchange 180–1 vocational training system 28 Weimar Republic 205, 238–40, 257–8 Ghosn, Carlos 156 Gingrich, Newt 60 285 globalization and economic liberalization and France 122, 123–4, 129 and Japan 149 Goffman, Erving 234 Gottschalk, P 52 Gourevitch, Peter 158 Goyder, D 269 gradual transformation 2, 9, 19 liberalization as 30–3 Greif, Avner 29 Grossmann-Doerth, Hanns 258 group competition, in the German financial system 176 Günther, Eberhardt 259–60 Hacker, J.S 6, 17, 23, 24–5, 204, 220, 221–2 Hall, P.A 5, 83, 88, 90, 130, 142, 172 Hallstein, Walter 263, 267 Hashimoto, R 160 Havana Charter (1947) 260 health care spending /system, France 110, 117, 118–19, 140, 141 health insurance in France 111, 116, 119, 120, 128, 130, 139 in Germany 213 in the United States 53–4, 56, 57–62, 73, 75 defeat of the Clinton health plan 61–2 employment-based 57–9, 62 Medicaid 56, 57, 60–1, 62 Medicare 55, 56, 57, 59–60, 62, 75 Hirschman, A.O 196 Hispanics in the US, and health insurance 58 holding companies, Japan 165 Hungary 91–9, 100 compared with the United Kingdom 84 Gyar region 20, 92–9, 99 comparisons with Szabolcs-Sszatmár-Bereg 97–8 Industrial Park 93, 95 local development 98–9 state socialism in 91, 92–7, 98 uprising (1956) 91 and ‘Western style capitalism’ 91–2 hybridization, and the German and Italian financial systems 195 illegal employment, and institutions as regimes 15–16 income distribution, and American welfare state retrenchment 41, 50, 51 286 Index income inequality and American welfare state retrenchment 50, 51, 52–3, 54–5 and health insurance 58 incomes incomes policy in the United Kingdom 87 RMI (guaranteed income) in France 110–11 incremental change 2, 8–9 and transformative change 18–19 with transformative results industrial relations in France 106–7, 118 see also trade unions inflation and economic liberalization in France 103, 105–6 in the United Kingdom 87, 91 institutional change and ambiguity 229–30, 232–6, 249 and antitrust and competition law 256 and codetermination in Germany 229–30 dynamics of 16–33 and early retirement policies in Germany 220–2 five modes of 19–30, 31, 33 and the German and Italian financial systems 195–7 grounding in pragmatic social action 231–2 and institutions as regimes 9–16, 17–18 as liberalization 2–4 and path dependence 6–8, 170–4 and pragmatism 232 punctuated equilibrium model of 1, 7, 8–9, 16, 19, 233–4 see also incremental change; transformative change institutional complementarities 235 institutional reconfiguration 235–6 institutional tensions 235–6 invasion, displacement through 21–2 Italy adaptive expectations 193–4 Amato Law 187 antitrust and competition law 271 Banking Law 187–8 banks 184–5, 186–8, 189–91 coordination effects 193 Mediobanca 184, 186, 187, 190–1 CONSOB 188, 189 Consolidated Law 194 financial system 170, 174, 184–91 state-dominated capitalism in 184–5 stock market 185, 186, 188–9 Telecom Italia 189, 191 Jackson, Gregory 18, 27, 32 Japan 17, 28–9, 103, 145–66 antitrust regulation 276 banks 149, 154–5, 156, 159, 162–3, 164 bounded innovation 163–5 Commercial Code 161 conversion 163 coordinated market economy 17, 148 economic liberalization 29, 32–3 financial crisis 119–20, 149–50 financial system and policies 146, 148, 149, 154–5 future prospects 163–4 reform 159–61, 164 firms economic restructuring 155–7 future prospects 162–3, 164–5 holding companies 165 forces for change 147–50 future prospects 162–5 and Germany 148 government ministries 163 IRC (Industrial Revitalization Corporation) 164 labor market policies 145–6, 148–9, 151, 153–4 future prospects 162, 164, 165 reform 158–9, 161 layering 163 LDP (Liberal Democratic Party) 150, 158, 160 and the liberal market model 146, 156 LTCB (Long-Term Credit Bank) 156 Mitsukoshi 157 model of institutional change 147, 150–7 macro level (specifics) 152 micro level (logic) 151–2 micro-macro interaction 152–3 and patterns of corporate adjustment 153–7 Nissan 153, 156, 157 policy reform patterns 158–62 political reforms 161 Seiya supermarket chain 157 state spending 120 statist system 119–20 tax and welfare reforms 162 Toyota 156 and the United States 148 variations across policy issue-areas 161–2 Joas, Hans, The Creativity of Action 231 Johnson, Lyndon 220 Jones, C.O., classical approach to public policy 130 Index Jospin, Lionel 108, 111, 121, 122, 139 Juppé, Alain 108, 111, 118–19, 128, 139 Katznelson, Ira 7, 8, 19 Keune, Maarten 20, 28 Keynesian economic policies 2–3, 20 in France 105, 123 in Germany 115 in the United Kingdom 87–90, 91, 99, 100 Kohl, Helmut 214–15 Koizumi, Junichiro 160 Korea, statist crisis in 120 Kotthoff, H 243, 244 Kristol, William 61 labor market policies and early retirement policies in Germany 205–6 France 107–9, 115, 118, 122, 128 Japan 145–6, 148–9, 151, 153–4, 158–9, 161, 162, 164, 165 Laitin, David 29 layering 19, 22–4, 30, 31, 33 and American welfare state retrenchment 42, 45, 48, 49, 56, 70 pensions policy 63, 75 and antitrust and competition law 270–1, 274–5 in France institutional layering 104–5 and the social welfare system 127, 131, 138–41 in Japan 163 Le Pen, Jean-Marie 121 learning curve, and neo-institutionalism 85, 86, 99 learning effects in German and Italian financial systems 192 and path dependence 171 legitimacy in the German financial system 177 and path dependence 172 Levy, Jonah 17, 18, 24, 27, 28, 30 liberal market economies 5, 83 liberalization economic liberalization in France 114–16 as gradual transformation 30–3 institutional change as 2–4 of UK financial markets 90 LIS (Luxembourg Income Study), and American welfare state retrenchment 54–5 LMEs (liberal market economies), and Japan 148 287 logic of action 18 logic of exit in financial systems 173 in the German financial system 192 logic of hierarchy, and the Italian financial system 185 logic of voice in financial systems 173 in the German financial system 175–6, 192 London, City of 88–90 lone-parent families, and American welfare state retrenchment 50, 51, 52 Maastricht Treaty 186, 271 McCloy, John 263 macroeconomic policy in France 105–6 Mahoney, J 7, 171–2 male workers, and early retirement policies in Germany 207, 208, 215 manufacturing industry in Germany and antitrust and competition law 260 banks and loans to 178 and early retirement policies 206–7, 211, 210 and postwar codetermination 241–2 Mares, I 207 market economies coordinated and liberal transitions to market-based financial systems 172–3 Marx, K 29 Mead, George Herbert 231–2 Mediobanca 184, 186, 187, 190–1 Merger Regulation 270–1, 275 Mettler, S 54 Milstein, A 54 minimum wage in France 108 Mitterand, Franỗois 103, 107, 113, 117 Miura, Mari 120 Moffit, R 52 monetarist economic policies, in the United Kingdom 90–1 monetary policy, in France 105–6 Monnet, Jean 262, 273 Moore, Barrington 20 Nargis, N 52 nationalisations in France 106 Nazi Germany, and codetermination 240, 241 neoliberalism, in the United Kingdom 20, 30, 86–91 NIE (New Institutional Economics), and Japan 150 Nissan 153, 156, 157 288 Index ordo-liberalism, in Germany 22, 259–60, 273–4 Palier, Bruno 23–4, 26, 32, 116 part-time retirement, in Germany 216–17, 218, 219, 220 part-time workers, in Japan 154 path dependence and American welfare state retrenchment 41, 44, 68–9, 72–4 and endogenous change 173 and French welfare programs 127, 128–9, 131–2, 134 and the German financial system 169, 170, 177–8 and institutional change 6–8, 170–4 and the Italian financial system 169, 170 and the learning curve 85 and neo-institutionalism 8, 101 Pierson’s theory of 6, 8, 170–1, 177 pay systems, Japan 163 pay-as-you go pension systems 22 France 110, 128, 134 United States 68 Pempel, T.J pension insurance, and early retirement policies in Germany 204, 209–10, 212, 213, 215 pensions France 110, 128, 132 Japan 148–9 see also pay-as-you go pension systems performance-oriented pay, and codetermination in Germany 247 Pierson, P 22, 27 and American welfare state retrenchment 42, 43–5, 72 and early retirement policies in Germany 203 theory of path dependence 6, 8, 170–1, 177 Piore, M 16, 20 Polanyi, Karl 4, 30 policies, and institutions as regimes 12 policy changes, and American welfare state retrenchment 44 political mobilization, and liberalization 33 political parties, and party competition in France 113–14 postwar capitalism ‘Golden Age’ of 2–3 transformation of postwar corporatism, in the United Kingdom 87 poverty relief in France 116, 122, 128, 139, 141 in the United States 52, 53, 60 power relations in the German financial system 176–7 and neo-institutionalism 85, 86, 99 pragmatic social action, and institutional change 231–2 private social benefits, and American welfare state retrenchment 45 privatization and economic liberalization in France 106 process of change 8–9 PSID (Panel Study of Income Dynamics), and US income inequality 52–3 punctuated equilibrium model of institutional change 1, 7, 8–9, 16, 19, 233–4 Quack, Sigrid 22, 27 rational choice theory and conversion 26 and institutional change and institutions as regimes 11 Reagan, Ronald 49, 67 reciprocity, and institutional change in Japan 150–1 recombination, and antitrust and competition law 274–5 reconfiguration and the COASE framework of institutional change 235–6 and codetermination in Germany 245 redundancies, and early retirement policies in Germany 206–7 regimes, institutions as 9–16, 17–18 results of change 8–9 retirement pensions, and American welfare state retrenchment 41, 56, 62–8 Rexrodt, Günter 215 Riester, Walter 216, 217 risk protection and American welfare state retrenchment 41, 42, 44–5, 49–50, 57, 69, 71 and health insurance 62 risk-privatization and American welfare state retrenchment 50, 70–1 pensions policy 63 risk-socialization, and American welfare state retrenchment 50, 71 Robinson, P 157 Rocard, Michel 110, 115 Rome Treaty (1957), and antitrust and competition law 256, 264, 265, 266–8, 271 Roth, Guenther 13 Index Roth, William 65 Rothstein, Bo 23 RPR (French Gaullist Rally for the Republic) 113–14 rule makers/rule takers and German codetermination 27 and institutions as regimes 13–15 rules, and institutions as regimes 10–11 Sabel, Charles 20 Scandinavian welfare states 54 Schickler, Eric 22, 23, 24, 26 Schmoldt, Hubertus 217 Schröder, Gerhard 217 Schumpeter, J 124 Second World War 258 shared decision making, in the German financial system 175–6 shareholder capitalism, Germany 183–4 shareholder value, and codetermination in Germany 247–9 Sherman Act (United States) 257, 261 Single European Act, and antitrust and competition law 270 Skocpol, T 25–6 SMEs (small and medium-size enterprises) in France 107, 111, 112–13, 117, 118, 123 in Hungary 94, 95, 96, 97 social democratic countries, and France 121 social exclusion, and French social policy 128, 131, 132, 133, 134, 139, 141 social insurance, in France 115–16, 127, 132–8, 139, 141, 142 social partnership, and codetermination in Germany 240–2 social protection, France 109–11 Soskice, D 5, 83 Spaak Report (1956), and antitrust and competition law 265–6 Spain, antitrust and competition law 271 stock market Germany 180–1 Italy 185, 186 Storch, Anton 205 Streeck, Wolfgang 130, 131 structure, and agency 7, 19 subsidiarity, and antitrust and competition law 271 Sweden, and France 121 Swidler, Ann Szabolcs-Sszatmár-Bereg, Hungary 97–8 289 taxation and American welfare state retrenchment 45, 49, 53, 55–6 and health insurance 57, 73 and pensions 62, 63, 67 and French social policy 104, 122, 128, 136, 139, 140, 141 Teles, S 56, 68 Thelen, K 46, 73, 129, 130, 131 third party enforcement, and institutions as regimes 10–11, 12 time, and institutional change 27–8 Tocqueville, Alexis de 116–17 Toyota 156 trade unions and American welfare state retrenchment 71 in France 107, 115, 132, 133, 135, 137, 140 in Germany and codetermination 32, 237, 238, 239, 241–2, 246, 248–9 and early retirement 115, 208–9, 216 and institutions as regimes 10, 12 and Keynesian economic policies 3, 87, 88 see also industrial relations Trampusch, Christine 29–30 transformative change and French social policy 127, 142 gradual 2, 9, 19, 30–3 and incremental change 18–19 transformation without disruption 4–9 transnational institution building, and antitrust and competition law in Europe 274–5 Tsebelis, G 47 unemployment and American welfare state retrenchment 50, 51 and early retirement policies in Germany 29–30, 205–6, 208, 209 and economic liberalization in France 107–8, 109, 115–16, 118, 122, 131, 132–3, 142 benefits 132, 139 insurance 141 unemployment traps 139 in the United Kingdom 87 unemployment benefits, and early retirement policies in Germany 210 unemployment insurance and American welfare state retrenchment 45 and early retirement policies in Germany 204, 209–10, 212, 213, 214, 215 290 Index United Kingdom City of London 88–90 Keynesian economic policies 87–90, 91, 99, 100 and neo-institutionalism 84 transition to neoliberalism 20, 30, 86–91, 99 United States and antitrust regulation 255, 257, 258–9, 275 civil war benefits 25–6 institutional reform of Congress 23 and Japan 148 retirement accounts 23 US welfare state retrenchment 17, 40–76, 204 and Aid to Families with Dependent Children 54 analysis of 43–5 and changes in employment structure 50, 51, 75 and changes in family structure 25, 50–1, 51–2, 75 conservative influences on 71–2 and early retirement policies in Germany 220, 221–2 and EITC (Earned Income Tax Credit) 54, 122 and ERISA (Employee Retirement Income Security Act) 58–9, 62–3, 63 and family support 53–4 and health care policy 24–5 and health insurance 53–4, 56, 57–62, 73, 75 defeat of the Clinton health plan 61–2 employment-based 57–9, 62 Medicaid 56, 57, 60–1, 62 Medicare 55, 56, 57, 59–60, 62, 75 and path dependence 41, 44, 68–9 and pensions 41, 56, 62–8, 75 401(k)plans 65–6 and employer contributions 62–4 Individual Retirement Accounts (IRAs) 64, 65–6, 67, 220 and policy feedbacks 46–7 and policy strategies 74–5 and private benefits 73–4, 75 and pro-welfare state coalitions 72 and public social programs 73 and risks 17, 25, 41, 42, 44–5 new social risks 49–57 and social protection 75–6 and Social Security 46, 55, 63, 67–8, 75 Venice, governing institutions 29 VOC (Varieties of Capitalism) literature, and Japan 150, 151 Vogel, Steven 17, 18, 28–9, 32–3 Walmart 157 Warren, Elizabeth 52 Weber, M 13 Weir, Margaret 220 welfare spending in France 110 welfare state retrenchment and continuity and early retirement policies in Germany 203 see also US welfare state retrenchment welfare states France 23–4 and Keynesian economic policies and layering 23 mismatch between risks and social protections 40–1 women, and American welfare state retrenchment 50, 51, 52, 54 ‘work line’ approach, and social democracy 121 working class, and early retirement policies in France 115 working hours in France 108–9, 115 works councils, and codetermination in Germany 238–40, 240–1, 243, 244, 245, 247–9 WTO (World Trade Organization), and Japan 149 youth employment, training programs in France 108, 115 Zwickel, Klaus 217 ... liberalization of advanced political economies Institutional change in advanced political economies Institutional change as liberalization In the 1980s and 1990s, the political economies of the.. .BEYOND CONTINUITY This page intentionally left blank Beyond Continuity Institutional Change in Advanced Political Economies Edited by WOLFGANG STREECK and... elements attached to existing institutions gradually change their status and structure Neglect of institutional maintenance in spite of external change resulting in slippage in institutional practice