Varieties of the New Regulatory State: Comparing the UK and Germany

Abstract

The UK and Germany differ in many respects: the two countries have been juxtaposed as specimens of a liberal market economy and a coordinated market economy respectively; as a liberal and a conservative-corporatist welfare regime; as a majoritarian democracy and a consensus democracy; with regard to pensions, as a Beveridge model (with a flat-rate basic pension) and as a Bismarck model (with earnings-related, contribution-based social insurance); and, more recently, as a ‘private pension veteran’ and a ‘private pension newcomer’. Do the UK and Germany equally embody two types of regulatory regime? Theoretical expectations are not entirely clear. From a functionalist point of view, we could expect more extensive regulation of pension markets in the UK since private pensions have a much bigger role to play. From a political perspective, however, we could expect less intensive regulation in the UK due to the tradition of market liberalism. Finally, from an institutionalist point of view, the institutional traditions of the two countries may have created developmental ‘paths’ which would shape the formation of the new regulatory state. In this chapter, we first compare the regulatory policies and arrangements in the two countries, identifying differences as well as similarities.