Table Of ContentOUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
Growth and Welfare in Advanced
Capitalist Economies
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
Growth and Welfare in
Advanced Capitalist
Economies
How Have Growth Regimes Evolved?
Edited by
ANKE HASSEL
BRUNO PALIER
1
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
3
GreatClarendonStreet,Oxford,OX26DP,
UnitedKingdom
OxfordUniversityPressisadepartmentoftheUniversityofOxford.
ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship,
andeducationbypublishingworldwide.Oxfordisaregisteredtrademarkof
OxfordUniversityPressintheUKandincertainothercountries
©OxfordUniversityPress2021
Themoralrightsoftheauthorshavebeenasserted
FirstEditionpublishedin2021
Impression:1
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedin
aretrievalsystem,ortransmitted,inanyformorbyanymeans,withoutthe
priorpermissioninwritingofOxfordUniversityPress,orasexpresslypermitted
bylaw,bylicenceorundertermsagreedwiththeappropriatereprographics
rightsorganization.Enquiriesconcerningreproductionoutsidethescopeofthe
aboveshouldbesenttotheRightsDepartment,OxfordUniversityPress,atthe
addressabove
Youmustnotcirculatethisworkinanyotherform
andyoumustimposethissameconditiononanyacquirer
PublishedintheUnitedStatesofAmericabyOxfordUniversityPress
198MadisonAvenue,NewYork,NY10016,UnitedStatesofAmerica
BritishLibraryCataloguinginPublicationData
Dataavailable
LibraryofCongressControlNumber:2020942133
ISBN978–0–19–886617–6
DOI:10.1093/oso/9780198866176.001.0001
PrintedandboundinGreatBritainby
ClaysLtd,ElcografS.p.A.
LinkstothirdpartywebsitesareprovidedbyOxfordingoodfaithand
forinformationonly.Oxforddisclaimsanyresponsibilityforthematerials
containedinanythirdpartywebsitereferencedinthiswork.
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
Preface
Thisbookistheproductofalongjourneyofconversationsanddiscussionsover
thelasteightyearsaboutthetransformationofthewelfarestateandthetoolsto
analyze it. It started with a series of seminars in France on “croissance et
protection sociale” (growth and social protection), organized by Bruno Palier,
Nathalie Morel, and Bruno Amable, launched in 2012 with the aim of better
connectingeconomicandsocialpolicies,withthesupportoftheFrenchMinistry
of Social Affairs.¹ Based on this, the two of us decided to work on an integrated
researchprojectthatwelaunchedin2014.
Weobservethatwelfare states ofrichindustrializedcountriesdevelopinvery
differentwaysdespitecommonchallengesofdeindustrialization,financialization,
and the rise of the knowledge economy. This observation is not new but a core
result of decades of research in comparative political economy. However, the
theoretical toolbox for understanding the diversity of welfare and economic
systems has not advanced accordingly. Rather the opposite: On the one hand,
workbasedontheconceptoftheVarietiesofCapitalism(VoC)thatflourishedin
the first decade of the 21st century has come to a standstill. On the other hand,
newapproachesonfinancializationandtheknowledgeeconomydonotembrace
enoughinstitutionaldiversity.
When we started our journey, two important new developments were yet to
emerge in comparative political economy. First, the book on The Politics of
Advanced Capitalism by Beramendi etal. (2015) argued in favor of looking at
welfarestatedevelopmentsfromtheperspectiveofelectoralgroupsandpotential
coalitions that underpin party manifestos. In their theory of constrained parti-
sanship, Beramendi etal. propose that different welfare states produce legacies
which shape the feasibility sets of parties to pursue new policies. The cleavage
of different policies is divided between consumption and investment. This
distinction is also key for our understanding when we analyze different social
policyreforms.LikeBeramendietal.,weaimtoexplainwhygovernmentsofsome
countriespursueinvestment-basedpoliciesandothersfocusonconsumption.
Second, Baccaro and Pontusson (2016) started a new research agenda on the
differentdemanddriversforgrowthindifferentcountries.Theirstartingpointis
post-Keynesian economics and the observation that export-led growth has
¹ ResultshavebeenpublishedinPalier,B.andR.Roussel2016.Stratégiesdecroissance,emploiet
protectionsociale.SpecialissueoftheRevueFrançaisedesAffairessociales,vol.1.
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
vi
fundamentally different implications for wages and distribution than wage-led
growth.
Both contributions have been important sources for this book. Our approach
focuses on growth strategies as incremental government decisions in favor or
againstcertainpoliciesintherealmofwelfaresystems.Wearguethatthewelfare
stateisatthecoreofgrowthregimesofnationalpoliticaleconomiesbecausesocial
policiesaffectboththedemandandthesupplysideoftheeconomy.Forinstance,
welfare payments affect the activation of long-term unemployed and sustain
domestic demand. Education policies shape the skill set of a society and—if
providedbythepublicsector—presentabigpoolofpublicsectorjobsandthereby
demand.Growthregimes,however,arelong-terminstitutionalarrangementsthat
specializeinparticulareconomicactivities.
Whereas Beramendi etal. (2015) focus on the demand for policies through
electoral coalitions and Baccaro and Pontusson (2016) look at the drivers for
growth,wecombinebothperspectives,whilekeepingtheinstitutionalperspective
dear to the French Regulation school or Variety of Capitalism, and argue that
governmentshavetomediatebetweenbotharenasofelectoralpoliticsandgrowth
regimes. The rise of the knowledge economy, as a culmination of the decline of
manufacturing, an increase of a diversity of different kinds of service sector
activities, and the shift towards service-based innovation, presents governments
withadifferentsetofoptions.Theseoptions,weargue,areembeddedindifferent
kindsofgrowthregimes.
Thebookisgroundedinthebroadliteratureofcomparativepoliticaleconomy
asithasevolvedoverthelastthirtyyears,startingwithEsping-Andersen’sThree
Worldsof WelfareCapitalism (1990). It aimsto presenta perspectiveon how to
integrateacompletelynewkindofeconomy,theknowledgeeconomy,intothese
theories.Ittakesfinancializationanddigitalizationasaprocessofreorganization
ofeconomiesthatneedthesupportofgovernmentpolicies.Inthatsense,itgoes
beyond a demand-side perspective that Baccaro and Pontusson but also
Beramendi etal. provide. Despite the long gestation of the book, we think that
we are only at the beginning of understanding new paradigms of the knowledge
economy.
We started the project in December 2014 with an initial conference in Paris,
whichwasgenerouslyfundedbytheGermanThyssenFoundationandtheFrench
Agence Nationale de la Recherche (through its LABEX Sciences Po-LIEPP,
Laboratory for Interdisciplinary Evaluation of Public Policies (ANR-11-LABX-
0091,ANR-11-IDEX-0005-02)).Wehadasecondmeetingoneyearlater,alsoin
Paris,fundedbythesameorganizations.Theparticipantsanddiscussantsofthese
conferences encouraged us to go ahead, and we would like to thank all those
present, namely Sonja Avlijaš, Lucio Baccaro, Robert Boyer, Moo-Kwon Chung,
Jon Erik Dølvik, María González Menéndez, Ana M. Guillén, Peter A. Hall,
Abby Innes, Jette Steen Knudsen, Christian Lyhne Ibsen, Cathie Jo Martin,
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
vii
Daniel Mügge, Marek Naczyk, George Pagoulatos, Georg Picot, Herman Mark
Schwartz,DavidSoskice,KathleenThelen,ChloéTouzet,ChristosTriantopoulos,
andAnneWren.
Since then, we have held numerous meetings and made many conference
presentations at CES, SASE, Espanet, WZB, the Hertie School, Nuffield College,
EUI Florence as well as other workshops. We would like to thank all those who
madeusefulcommentstous,withoutbeingabletomentionthemall.Duringthis
journey, we also brought on board new project partners such as Tom Chevalier,
Alison Johnston, Aidan Regan, Alexander Reisenbichler, and Fritz Scharpf. We
hadplannedinthebeginningacomprehensivevolumewithanumberofcountry
case chapters. As the project grew bigger, we took the decision to divide the
volume into two separate books. The second book on country cases is now in
preparation.
We would like to thank again our contributors for boththeir strong commit-
ment and their unwavering patience in this journey exploring the evolution of
growth regimes in advanced capitalist economies. Also, we benefited tremen-
dously from a lot of support on the way from many people. We would like to
thank Licia Bobzien, Joshua Cova, Lukas Jerg, Regina List, Claudia Müller, Julia
Seefeld,FelixSieker,AmandaSlater,andIvanTubioSanles.
Finally, the book also progressed during a time which was professionally
challenging for both of us. We both directed research centers that underwent
turbulentdevelopmentsoverthelastsixyears.Giventhecircumstances,itwasnot
always easy to stay on course with the project. Navigating these rough waters
demandedalotfromourfamilies.Weoweourpartnersmorethangratitudeand
wanttoexpressourlovetoHughWilliamsonandNathalieMorel.
AnkeHassel
BrunoPalier
BerlinandParis
March2020
Financing acknowledgement: This work is supported by a public grant overseen
by the French National Research Agency (ANR) as part of the “Investissements
d’Avenir” program LIEPP (ANR-11-LABX-0091, ANR-11-IDEX-0005-02) and
byagrantoftheThyssenFoundation.
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
OUPCORRECTEDAUTOPAGEPROOFS–FINAL,9/12/2020,SPi
Contents
ListofFigures xi
ListofTables xv
ListofContributors xvii
PART I: THE EVOLUTION OF GROWTH
REGIMES AND STRATEGIES
1. TrackingtheTransformationofGrowthRegimesinAdvanced
CapitalistEconomies 3
AnkeHasselandBrunoPalier
2. HowGrowthStrategiesEvolveintheDevelopedDemocracies 57
PeterA.Hall
3. EuropeanGrowthModelsBeforeandAftertheGreatRecession 98
LucioBaccaroandJonasPontusson
4. Cross-NationalVariationinGrowthModels:ThreeSources
ofExtraDemand 135
GeorgPicot
5. ForcedStructuralConvergenceintheEurozone 161
FritzW.Scharpf
PART II: THE POLITICS OF GROWTH STRATEGIES
6. TransitionstotheKnowledgeEconomyinGermany,Sweden,
andtheNetherlands 203
KathleenThelen
7. GrowthStrategiesandEmployers’Coalitions:Renewing
WelfareStates 227
CathieJoMartin
8. StrategiesforGrowthandEmploymentCreationinaServices-
BasedEconomy:SkillFormation,Equality,andtheWelfareState 255
AnneWren
