Changing Welfare Market Structures and Politics of Re-Regulation

This paper investigates the changing structures of welfare markets in Germany and Sweden. Both countries experienced a growth of private schools since the 1990s and the foundation of private pensions in the early 2000s. While we have a fairly good understanding of the origins and politics of these developments (Gingrich 2012, Köppe 2015), we know less about subsequent changes and re-regulation efforts. For Sweden we also have relatively good analyses of how the creation of markets changed the operations of providers and affected inequality and access to services. In the German case such data is largely missing apart from some general survey data. Yet, in both countries we can observe regulatory changes to private schools and pensions. This paper has two aims.

First, it maps the changes to welfare market structures from 1990/2000 to 2015. Swedish schools and pensions were altered substantially over the observation period. In contrast, only the German private pension market saw some product additions without changing the existing product types. The regulation for the German private school market remained unchanged from the 1990s, despite the expansion of private schools and changing parental choices.

Second, it uncovers the politics behind the re-regulation. In Sweden the changes in welfare markets follow a similar pattern to those of the foundation period. The partisan conflict around private schools dominated subsequent changes, while the consensus politics of the pension reform are continued. Swedish pension politics are replaced with technocratic (and even some evidence-based) policy-making. In Germany we observe rather a policy drift. The increasing problems of underinsurance and mis-selling in the private pension market and a gradual decline of state schooling are largely ignored. Reasons for these different welfare market governance patterns are functional (lack of data, problem pressure), political institutions (state commissions) and agenda setting of partisan actors.