Abstract
This chapter asks whether increasing power resources of private sector providers translate into influence in welfare state politics. When do governments introduce social policy reforms that expand the market for private providers? Does the presence of private sector providers make a difference for the output of reforms? The chapter analyses welfare state reforms in pension and hospital sectors in Germany and the UK between 1990 and 2010. Findings suggest that the presence of powerful private sector providers partially explains privatizing reforms—but this only holds for later periods of marketization and in conjunction with other factors such as left-wing party governments, institutional leeway, and socio-economic problem pressure. The comparison of sectors shows that private provider power is more relevant for explaining pension than hospital reforms.
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- 1.
Table A3.6 (see Online Appendix) provides more details about the exact operationalization . It also presents two alternative measures—counting Christian Democratic parties as left or right parties—that are used for robustness tests (Table A3.27, see Online Appendix).
- 2.
Analyses for both countries separately are presented in Online Appendix 3.
- 3.
XY plots of all paths as well as parsimonious and intermediate solutions are presented in Online Appendix 3.
- 4.
An INUS condition is formally defined as an ‘insufficient but necessary part of a condition that itself is unnecessary but sufficient’ (Schneider and Wagemann 2012, p. 79).
- 5.
I report consistency , raw coverage , and unique coverage . Consistency is the central parameter of fit. It shows how many cases deviate from the set relation and how strongly they deviate. Values range between 0 and 1. High consistency values indicate that there is little evidence against the statement of sufficiency. Coverage tells us how much of an outcome is covered by the solution . Raw coverage relates to the general coverage of a path, while unique coverage expresses the exclusive coverage of a path. Again, values range between 0 and 1. High coverage values indicate that much of the outcome is explained by a solution .
- 6.
I tested different periodizations in order to check how robust the findings are. The results remain stable when we shift the boundary by one year. More tests with different periods are presented in Online Appendix 3.
- 7.
Again, as in the analysis for the whole period, we see either the presence of institutional leeway or problem pressure to matter for reforms. The first path is represented by pension reforms in the UK , while reforms in the German hospital sector are typical cases for the second path (problem pressure and the absence of both powerful welfare industries and institutional leeway ). Note, however, that coverage values indicate that these paths only explain a medium share of the outcome (see also XY plots in Online Appendix 3).
- 8.
The last two terms of the hospital reform solution lead us to Hypothesis 1. They include the absence of powerful welfare industries as an INUS condition . What first might look like a puzzling result, if we think of the discussion above, turns out to be explained by the expectation formulated in H1. The terms including pwi are represented by hospital reforms in the 1990s, especially in Germany , when private hospital chains were only evolving. The hospital results thus clearly show that PWI is part of a term that is represented by reforms after 2000, while the absence of powerful private hospitals is part of the explanation of earlier reforms.
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Pieper, J. (2018). Private Sector Providers and Patterns of Privatization. In: New Private Sector Providers in the Welfare State. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62563-8_5
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DOI: https://doi.org/10.1007/978-3-319-62563-8_5
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