ABSTRACT
In this chapter, we will turn to institutional change. Here path dependency, institutional inertia and vested interests come to the fore. Therefore, change often occurs below the surface of preserving national traditions (Bannink and Hoogenboom 2007), and new policies are adapted to old programmes (Hudson and Kühner 2009). Established institutions are adjusted to the change of solidarity in the context of international labour division. We will look at three examples of path-dependent adjustment to global competition in the context of international labour division according to the typology of welfare regimes introduced by Esping-Andersen (1990): the liberal welfare regime of the United States, the conservative welfare regime of Germany and the social democratic welfare regimes of Sweden and Denmark (cf. Goodin et al. 1999; Scruggs and Allan 2006). The focus will be on employment policy. We begin with an outline of the economic performance of these welfare states under globalized competition. Then we look at each case separately. We will start with a description of the structure of solidarity and the idea of justice characteristic of the types of welfare regimes under scrutiny. Then we will cover adjustment to globalized competition in the three types of welfare regime. Finally, we will address a significant convergence between these three types, namely the increasing significance of a new inclusion problem: relative exclusion of a new underclass of unskilled underachievers as a side effect of the individualization of inclusion through educational upgrading. Subsequently, we will submit this new common inclusion problem of the three types of welfare regime to closer scrutiny. The final paragraph rounds off the chapter with an analysis of a further point of convergence in our sample of welfare states, which makes institutional reform particularly controversial and difficult to carry out. This point is the increasing shift of reform processes from compromising corporatist interest coordination between major representative interest organizations and the state towards uncompromising public debate. With this shift veto players multiply and make institutional reform difficult to attain (cf. Swank 2002; Korpi 2003; Ebbinghaus 2004; Taylor-Gooby 2004, 2008; Starke 2006; Daguerre 2007; Clasen and Siegel 2007; Olsen 2008; Viebrock 2009).
