Germany : the public-private dichotomy in the Bismarckian welfare regime

Abstract

The German welfare state has undergone fundamental reforms over the past three decades. Since the early 1980s, various governments changed the programmatic contours of German social policies. Beyond the question of how various national governments could push through these reforms under the conditions of federalism, divided government ( jointdecision trap ; Scharpf 1988, 2006), corporatism and increasing party competition, this chapter focuses on the changing contours of the public-private mix in health and pension policies. The argument of this chapter is that privatization, understood as a risk shift (Hacker 2004, 2006), has taken place in the German welfare state. However, because this welfare state was, and largely remains, a highly interwoven social insurance state in which the state and social partners (for example, labor and business organizations) coincidentally finance and regulate important welfare programs, these reforms do not imply that the federal government lost its prominent role in social policy. Rather, the national government still strongly regulates benefits, contributions, and other programmatic features of public and private social policies.