Pension Reform in Continental Europe : A comparative study of pension reform in Germany and France during the years ofausterity 1990-2010.

University essay from Stockholms universitet/Statsvetenskapliga institutionen

Abstract: As demographic and economic contexts have shifted, the need for pension systems to reform has increased. Often, however, these systems have proved difficult to change – especially in continental Europe. Despite this, Germany, by many considered particularly reform resistant, succeeded in reforming its pension system; while France, with its strong executive power, has not. As research has yet to find a consensus on what factors makes welfare retrenchment possible, this field requires more attention. Therefore, the aim of this thesis is to analyse the developments of the German and French pension systems, from 1990-2010, and to unearth what factors made successful reform possible in Germany while it failed in France. Using a comparative case study, all major pension reforms in the two countries during the time period, are analysed from four institutionalist perspectives. The results point to three main factors explaining Germany’s successful reform. Firstly, the shock brought on by the reunification of East and West Germany forced politicians to act. France on the other hand, experienced no such shock. Secondly, the subduing of the unions removed the main veto player against reform. In contrast, the French unions, whose political power lies in their ability to call for manifestations and shift public opinion, could not be outflanked. Lastly, the new liberal ideas that permeated German politics around the turn of the century provided a locus for change that was lacking in France. These results suggest the importance of external pressure, veto players and ideational factors to major welfare reform.

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