Introduction

Abstract

The German welfare state has been prominently characterised as a ‘frozen landscape’, which has shown much resistance to change (Esping-Andersen 1996: 24; Pierson 2001a: 448). While Germany’s economic performance throughout the 1970s and 1980s was considered rather sound in a comparative perspective, the German model – its ‘reform gridlock’ and capacity to reform – has been discussed somewhat critically since the mid-1990s (Lehmbruch 2003: 143; Padgett 2003). The lack of major reforms has been ascribed to the incapacity of political elites to create an innovative reform discourse in society, allowing them to implement unpopular measures (Cox 2001; V. Schmidt 2000: 266, 274–281). Another common argument is that the pattern of ‘slow innovation and adjustment’ (Streeck and Kitschelt 2003: 18) of the German political economy is associated with the rigidities and inefficiencies of the institutional fragmentation of the decision-making structure. However, despite unfavourable institutional conditions for major change, the German welfare state, ‘ignoring’ the popular moaning about its inability to reform, has undergone substantial changes since the second half of the 1990s.