The Politics of Social Riskassets.cambridge.org/97805215/34772/frontmatter/9780521534772... · portance of business and labor-based organizations in the negotiation of a new ... The

The Politics of Social Risk

The book provides a systematic evaluation of the role played by business inthe development of the modern welfare state. When and why have employerssupported the development of institutions of social insurance that provide ben-efits to workers for various employment-related risks? What factors explain thevariation in the social policy preferences of employers? What is the relative im-portance of business and labor-based organizations in the negotiation of a newsocial policy? This book studies these questions by examining the role playedby German and French producers in eight social policy reforms spanning acentury of social policy development. The analysis demonstrates that majorsocial policies were supported by cross-class alliances comprising labor-basedorganizations and key sectors of the business community.

Isabela Mares is assistant professor of political science at Stanford University.She is the author of articles on social policy and political economy that haveappeared in World Politics, Politics and Society, Governance, Journal of Public Policyr,and edited volumes. She has been awarded the Sage Prize by the ComparativePolitics section of the American Political Science Association for her researchon the role of business in the development of the modern welfare state.

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Cambridge University Press978-0-521-53477-2 - The Politics of Social Risk: Business and Welfare State DevelopmentIsabela MaresFrontmatterMore information

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Cambridge Studies in Comparative Politics

General Editor

Margaret Levi University of Washington, Seattle

Assistant General Editor

Stephen Hanson University of Washington, Seattle

Associate Editors

Robert H. Bates Harvard UniversityPeter Hall Harvard UniversityPeter Lange Duke UniversityHelen Milner Columbia UniversityFrances Rosenbluth Yale UniversitySusan Stokes University of ChicagoSidney Tarrow Cornell University

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Mark Beissinger, Nationalist Mobilization and the Collapse of the Soviet StateCarles Boix, Political Parties, Growth, and Equality: Conservative and Social

Democratic Economic Strategies in the World EconomyCatherine Boone, Merchant Capital and the Roots of State Power in Senegal,

1930-1985Michael Bratton and Nicolas van de Walle, Democratic Experiments in

Africa: Regime Transitions in Comparative PerspectiveValerie Bunce, Leaving Socialism and Leaving the State: The End of

Yugoslavia, the Soviet Union, and CzechoslovakiaRuth Berins Collier, Paths toward Democracy: The Working Class and Elites

in Western Europe and South AmericaDonatella della Porta, Social Movements, Political Violence, and the StateGerald Easter, Reconstructing the State: Personal Networks and Elite IdentityRobert F. Franzese, Macroeconomic Policies of Developed DemocraciesRoberto Franzosi, The Puzzle of Strikes: Class and State Strategies in

Postwar Italy

Continues after the Index












BUSINESS AND WELFARESTATE DEVELOPMENT

ISABELA MARESStanford University

CAMBRIDGEUNIVERSITY PRESS






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© Isabela Mares 2003

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First published 2003

A catalogue record for this publication is available from the British Library.

Library of Congress Cataloging in Publication DataMares, Isabela. The politics of social risk: business and welfare state development / Isabela Mares. p. cm. – (Cambridge studies in comparative politics) Includes bibliographical references and index. ISBN 0-521-82741-8 – ISBN 0-521-53477-1 (pb.) 1. Employee fringe benefits – France – History. 2. Employee fringe benefits – Germany – History. 3. Social security – France – History. 4. Social security – Germany – History. 5. Welfare state – France – History. 6. Welfare state – Germany – History. I. Title. II. Series. HD4928.N62M37 2003 330.12´6–dc21 2002041557

isbn 978-0-521-82741-6 Hardback isbn 978-0-521-53477-2 Paperback

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For my parents











Contents

List of Figures and Tables page xii

Acknowledgments xv

1 THE WELFARE STATE: A WORLD AGAINSTEMPLOYERS? 1Class Conflict and the Development of the Modern

Welfare State 4Recent Challenges to the Power Resource Perspective 6A Preview of the Book 9

2 INTERESTS AND COALITIONS IN THEDEVELOPMENT OF THE MODERNWELFARE STATE 12The Universe of Social Policies 14The Social Policy Preferences of Employers 21Political Coalitions and Social Policy Reform 41Looking Ahead 62

3 WORKPLACE ACCIDENTS AS SOCIAL RISK:EMPLOYERS AND THE DEVELOPMENT OFACCIDENT INSURANCE 64Setting the Stage for Reform: German Private Law and Its

Contradictions 65The Social Policy Preferences of German Firms 71The Negotiation of Accident Insurance 76Legal and Political Developments in France 86The Preferences of French Employers 89






Contents

Compulsory Insurance or a Reform of Liability Law? 96Conclusion 104

IS UNEMPLOYMENT INSURABLE? EMPLOYERSAND THE DEVELOPMENT OFUNEMPLOYMENT INSURANCE 106An Early Success: The Introduction of a Ghent System in

France in 1905 108French Employers and the Assurances Sociales 121Negotiation and Defeat 128A First Political Experiment: A Means-Tested

Unemployment Assistance 138The Social Policy Preferences of German Employers 144Cross-Class Alliances and Social Policy Reform: The

Development of Contributory Unemployment Insurance 153Conclusion 165

UNIFIED OR OCCUPATIONALLYFRAGMENTED INSURANCE? POLITICALREFORMS DURING THE POSTWAR YEARS 166Military Authorities and Social Insurance Reform 167Employers and Proposals for Einheitsversicherung 169The Negotiation of Social Insurance 180An Early Success: The Ordonnance of 15 October 1945 187French Employers and Universalistic Social Policies 193Employers' Influence and the Defeat of the Ordonnance 202Conclusion 210

RISK REDISTRIBUTION IN MATURE WELFARESTATES: THE POLITICS OF EARLYRETIREMENT 213From the Commission Laroque to the Eighth Plan: The

Beginning of Early Retirement in France 214The Preferences of French Employers 219The Negotiation of Early Retirement Policies: The

Ordonnance of 2 6 March 1982 225The Origin of Early Retirement Policies in Germany 231The Preferences of German Employers 235A Pyrrhic Victory of the State: The Negotiation of the Early

Retirement Act (Vorruhestandsgesetz) 239Conclusion 246






Contents

7 CONCLUSIONS 249Findings on Business Preferences 252Findings on Cross-Class Alliances 259Concluding Remarks 263

References 267

Index 311






Figures and Tables

Figures

2.1 The social policy space page 152.2 The indifference curves of firms 342.3 The location of the maximum of the utility of firms 3 52.4 Predictions about the policy preferences of firms 3 82.5 Illustration of comparative statics results 402.6 The policy preferences of employers and trade unions 492.7 Possible strategic alliances 613.1 German employers and the introduction of accident

insurance 773.2 French employers and the introduction of accident

insurance 954.1 French employers and the introduction of the Assurances

Sociales 1294.2 German employers and the introduction of unemployment

insurance 1535.1 German employers and postwar social policy developments 1795.2 French employers and postwar social policy developments 2006.1 French employers and the development of early retirement

policies 2246.2 German employers and the development of early retirement

policies 2387.1 Broad findings on business preferences 253

xn






Figures and Tables

Tables

2.1 Predicted effect of incidence of risk, size, and skillintensity on firms' sensitivities for risk redistributionand control 32

2.2 Predictions about social policy outcomes preferred bydifferent firms 37

2.3 Predictions about preferred social policy of trade unions 48











Acknowledgments

It is my great pleasure to be able to thank the persons who have provided in-tellectual support and friendship during the period of research and writing.My greatest intellectual debt goes to Peter Hall, the chair of my dissertationcommittee. Peter has encouraged me to pursue this project and has offeredadvice and guidance at every critical juncture in its development. Peter'sthoughtful, extensive comments on several versions of the manuscript (thatare now buried on my hard drive) could easily constitute a book on theirown, undoubtedly a better book than the present one. I am extremely grate-ful to David Soskice - whose research has reoriented comparative politicaleconomy research during the past decade - for sparking my interest in thestudy of business and for many, many long hours of conversation. The othermembers of my dissertation committee, Suzanne Berger, Torben Iversen,and Paul Pierson, generously shared their time with me and helped me avoidmany wrong turns along the way. Their work continues to be a source ofinspiration for me.

The core research material for this book comprises archival data onbusiness preferences. I have collected these data during an extensive periodof travel and have incurred numerous debts at the research stage. InFrance, my thanks go to Robert Salais, for having hosted me at IRESCO,and to many librarians and archivists at the Archives Nationales, Archivede la Chambre de Commerce de Paris, the Bibliotheque Nationale, andthe Centre des Archives Contemporaines for their help in identifying pre-viously unexplored sources. I also want to thank Marcel and Tamara Beneand Alexandra and Olivier Contemine for hosting me during the periodof my research in France. In Germany, I would like to thank archivistsat the Zentrales Staatsarchiv in Potsdam and Koblenz, the Archive ofthe Friedrich Ebert Foundation in Bonn, the Rheinisch-Westfalisches






Acknowledgments

Wirtschaftsarchiv, and the archive of the Bundesvereinigung der DeutschenArbeitgeberverbande in Cologne. During the period of fieldwork, I had theextraordinary opportunity to be a guest researcher in the stimulating re-search environment of the labor market unit of the WissenschaftszentrumBerlin. I want to thank Robert Hancke, Steven Casper, Karl-Orfeo Fioretos,and Stewart Wood for patiently listening to my preliminary ideas andfor their research suggestions and leads. At the Max-Planck Institute inCologne, I am grateful to Philip Manow, Anke Hassel, Philip Genschel,Steffen Ganghoff, Jim Mosher, and Bernhard Ebbinghaus for extremelyinsightful comments.

The first version of the manuscript was completed at the Center forEuropean Studies at Harvard. At this stage, I benefited from advice frommany friends, who were pursuing similar intellectual projects. Many thanksto Carles Boix, Pepper and Mary-Louise Culpepper, Keith Darden, RobertFranzese, Margarita Estevez-Abe, and Gunnar Trumbull. I am also in-debted to a large number of colleagues who have commented on themanuscript at various seminars, workshops, and conferences. I am gratefulto Richard Deeg, Marie Gottschalk, Peter Gourevitch, Peter Katzenstein,Peter Lange, Jonah Levy, Herbert Kitschelt, Cathie Jo Martin, JonasPontusson, Kathleen Thelen, John Stephens, Peter Swenson, WolfgangStreeck, Margaret Weir, and Nicholas Ziegler for comments. The depart-ment of political science at Stanford University provided a highly stimulat-ing environment for the final completion of the manuscript. I am especiallygrateful to David Abernethy, David Laitin, and Jim Fearon for reading sev-eral versions of the manuscript and to Alberto Diaz-Cayeros, Claudine Gay,Steven Haber, Beatriz Magaloni, Jean Oi, Mike Tomz, and Anne Wren formany helpful comments. I would like to thank Paul Sniderman for his ad-vice and for helping me overcome many unexpected adversities in the finalpreparation of the manuscript.

Several institutions have provided financial assistance during the periodof research and writing: the Mellon Foundation, the Krupp Foundation,the Center for European Studies at Harvard University, the AmericanInstitute for Contemporary German Studies, the Center for EuropeanStudies at Georgetown University, and the Department of Political Scienceat Stanford University. Parts of this book have been published as articles orbook chapters, and I gratefully acknowledge the willingness of their publish-ers to allow the publication of revised versions. At Cambridge UniversityPress, I am grateful to Margaret Levi and Lewis Bateman for their help inclarifying some ideas and for improving the book manuscript.






Acknowledgments

I have continuously derived strength and inspiration from my family. Myhusband, Radu, has accompanied me during this long intellectual journeyand has participated in all the stages of the project. My brother, Vlad, hasalways offered the right mix of support and criticism. Finally, my parentshave always encouraged me to let my intuition guide me in the choiceamong competing intellectual projects. This book, which follows this sim-ple advice, is dedicated to my parents.

















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The Politics of Social Riskassets.cambridge.org/97805215/34772/frontmatter/9780521534772... · portance of business and labor-based organizations in the negotiation of a new ... The