ABSTRACT
The previous chapter has analysed how different dynamics of party competition have driven the emergence of very diverse systems of unemployment compensation in Italy and Germany. Putting it simply, centripetal competition in Germany has contributed to the rise of a benefit system with a low degree of segmentation, while centrifugal competition in Italy has brought about a strongly segmented system of unemployment compensation. When the economic conditions changed in the middle of the 1970s, the role of party competition in social policy-making also changed. After all, the political task was not to ‘hand out’ any more public benefits to the electorate, but to restrict and redesign existing entitlements. The new policy changes were no longer something that political parties wanted to claim the credit for but something they wanted to avoid being blamed for (Pierson 1996).
