chapter  8
20 Pages

The Third Way in welfare state reform?

Social Democratic pension politics in Germany and Sweden
ByKaren M. Anderson, Traute Meyer

The task of updating welfare state institutions to meet new economic and demographic pressures poses a major challenge to Social Democracy. This is especially apparent in the case of pension policy because of the size and cost of public pensions. Pensions are typically the largest component in public social budgets, and pensions constitute a classic case of path dependent change (Pierson 1994; Bonoli 2000; Myles and Pierson 2001). Benefit commitments made by governments over the course of many decades ‘lock in’ policies and make reform difficult. Under these circumstances are Social Democratic pension reforms destined to be simply pragmatic, defensive, ad hoc responses to demographic and fiscal pressures, or is there scope for the emergence of a ‘Third Way’ in pension politics?