Book Description

Throughout the last decades, advanced industrial democracies have been confronted by the long term pressures of globalisation, rising and persistent unemployment, ageing populations, rising health care costs, and the severe, but shorter-term shocks of recession, currency runs, and other troubles. The international political economy literature is rife with observations that states are under increasing pressure to reduce taxes and to trim their budgets, and recent austerity efforts in Europe and the United States support the view that governments are responding to these intensifying economic and political incentives by constraining their spending. Simultaneously, governments encounter political pressures to maintain or expand their social welfare safety nets in order to meet the needs of their most vulnerable populations - the unemployed and underemployed, the sick and disabled, pensioners, and the poor. Despite these common pressures, there has been a great degree of divergence over the last decades. Variation endures in terms of the aggregate levels of taxation and expenditures and the distribution of costs and benefits among the citizenry. Reforms have differed in regard to whether they are approached in a confrontational manner by the government alone or in consensual, negotiated process that includes the parliamentary opposition, trade unions, and employers' associations. Some painful reforms have been met with massive strikes and protests, while other painful reforms have been accepted with relative equanimity. Finally, there has been a great deal of variance in the ability of various governments to adopt and implement their reform packages and to survive the potential backlash in response to these reforms. Considering the cases of France, Italy, and Germany during the 1990s, this dissertation sheds new light on the factors determining the approach to reform, the distribution of costs and benefits, and the likelihood that governments will succeed in their attempts to adopt and implement reforms. Chapter 1 introduces the core questions, presents a brief overview of the theory, and explains the methodology and case selection. Chapter 2 develops a theoretical framework for understanding: (a) the factors that lead governments to adopt a particular approach to a reform, (b) the role that partisanship plays in determining the distributional implications of reform, (c) the effect that the approach and the distributional implications of the reform have upon how the parliamentary opposition, the social partners, and the public respond to the reform, and (d) the role that response plays in determining the ultimate fate of the reform - and, in some cases, the fate of that government. Chapter 3 considers the experiences of France, exploring the theory's ability to explain a case of a typical state facing conflicting economic and political pressures to reform its economic, fiscal, and social welfare policies. Chapter 4 tests the theory's applicability to Italy, a country undergoing a particularly high level of economic and political stress. Chapter 5 focuses upon the apparently deviant case of Germany, where both the reform approach and the distributional implications of the reform seem to run counter to the theory's predictions. Deep examination of the role of party factions and shifts in the balance of power within the governing coalition reveals the importance of considering the preferences of the reform leadership rather than the coalition as a whole in order to generate accurate predictions and interpretations. Chapter 6 concludes with an overview of generalisable conclusions and future research directions.