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Although Austria, the Netherlands, and Belgium are so seemingly alike in their tightly coupled, consociational, and corporatist democratic structures and in the “Bismarckian” origin of their welfare states, they have had radically different experiences since the 1970s. While the Netherlands, which appeared in the 1970s and early 1980s to be afflicted with a terminal ‘Dutch disease’, has seemingly been cured, Belgium, with a similar initial profile, has been malingering and Austria has managed to avoid the crises from which the others are recovering. Since all three countries have internationally exposed and hence vulnerable economies as well as policymaking structures with plural veto positions, the success or failure of adjustment policies did depend on the ability of actors to adopt action orientations that emphasize common, rather than separate, interests. The Austrian social partners succeeded in maintaining this ‘encompassing’ perspective throughout the period under study; the Dutch had to relearn it after dismal failures; and in Belgium, the increasing salience of linguistic cleavages added to the difficulty of achieving, and acting on, convergent perceptions and interest definitions.

Germany was comparatively successful in weathering the macroeconomic crises of the 1970s and early 1980s, and its industrial sector remained highly competitive throughout. Nevertheless, unemployment has been high and is still rising. The impact of unification is only a part of the explanation. Instead, the very formula for Germany's past success is also the key to its current problems. Cooperative labour relations, on which German international competitiveness depends, were maintained by using the welfare state's generous exit options from the labour market for older and less productive workers. Given the prevailing mode of financing the “Bismarckian” welfare state, however, the resulting rise of social security contributions added to the costs of labour throughout the economy. As the government relied on the same solution in coping with the massive employment losses in East Germany after unification, non‐wage labour costs have risen to a level that can be sustained only by highly productive types of work. This constrains the growth of private services that have compensated industrial job losses in other countries.

The Bismarckian welfare state in France is financed by social security contributions to an even greater degree than is true in Germany. During the oil‐price crises of the 1970s and early 1980s, job losses could be contained through an expansion of nationalized industries and subsidies to private firms. This changed with the end of dirigisme in industry after 1983. Thereafter, early retirement was expanded to absorb the massive job losses caused by industrial restructuring. Since rising non‐wage labour costs impeded job creation in the private services, the government has shifted part of the burden to a special income tax, whereas attempts by successive governments to reduce the generosity of welfare benefits were typically blocked by large‐scale public protests.

This chapter by Ebbinghaus and Gronwald provides a comparative historical analysis mapping the cross-national institutional diversity in the evolution of pension systems in ten European countries. Analysing the long-term development, it describes the way in which institutional arrangements in private pensions evolved over time and interact with public pension reforms. The process of institutional change is examined by analysing critical junctures in the public–private pension mix. First, the early legacy and path-dependent post-war dynamics in public pension development are sketched, contrasting Bismarckian social insurance and Beveridge basic pension traditions. The second juncture compares successful versus belated or even failed expansion of public pensions to secure living standards in old age, and its consequences for crowding out private pensions. Finally, the more recent pension reforms led towards a multipillar pension system, in some cases retrenchment of public pensions and privatization efforts are crowding in funded private pensions.

Belgium's public–private pension mix can be considered a paradox: despite the conservative-corporatist welfare regime and rather limited Bismarckian social insurance for old age, voluntarist occupational pensions remained underdeveloped. Until recent pension reforms, the comparatively low replacement rates of public pensions did not lead to the development of extensive occupational plans, even if several institutional conditions that elsewhere advanced the expansion of supplementary pensions were given. The chapter also reviews the governance of private pensions, discussing how recent attempts to broaden access to occupational pensions have been facilitated and frustrated by the decision to embed those schemes into the neo-corporatist system of collective agreements. Although this allows to extend coverage of private pensions for lower income groups, at the same time it also severely limited the possibility to mobilize funds that are necessary to guarantee adequate income maintenance for the general population.

Following the Bismarckian social insurance tradition, the post-war pension system of France has been characterized by occupational fragmentation, its strong reliance on pay-as-you-go financing, and by the direct involvement of employers and trade unions in their management. Generous benefits offered a combination of statutory public pension and mandatory occupational pensions, initially crowding out any funded private pensions. However, pension reforms that promoted retrenchment both in the two pay-as-you-go-financed statutory public and occupational pension schemes since the 1990s have resulted in the gradual development of funded private pensions. In recent years, the governance of mandatory occupational schemes has been harmonized and inequalities between different occupational categories have been reduced. While the regulatory framework governing voluntarily funded plans (both occupational and personal pensions) has been largely unified, access to these schemes remains mostly limited to high-skilled employees.

The chapter first reviews the emergence and change of the public–private pension mix in Germany, emphasizing the path-dependent but recent path-departing developments from the Bismarckian social insurance tradition. The politically contentious pension reforms of the 1990s and subsequent reforms in the 2000s followed a strategy of institutional layering by introducing a voluntary personal (‘Riester’) pension, while fostering coexisting occupational pensions. At the same time, the reforms of public pensions made voluntary private pensions necessary for status maintenance in old age. The second part analyses the structure and governance of occupational and personal pensions in Germany, highlighting the new instruments for the design of occupational pensions such as collective agreements and collective pension institutions self-administered by employers and trade unions. The chapter concludes with an outlook on the future, discussing potential scenarios for institutional change and its consequences for old age income in Germany.

In Italy, the move from a dominant public pension pillar based on a pay-as-you-go-financed Bismarckian social insurance towards a multipillar system is an instructive example of a ‘top-down’ process pursued by governments in order to compensate for the far-reaching pension reforms in the 1990s. Change began during difficult socio-economic and financial conditions when policymakers opted to exploit the pre-existing severance-pay scheme as an ‘institutional gate’ in order to boost private supplementary pensions. However, this strategy ruled out compulsory affiliation to the new funded schemes, thereby limiting their potential coverage. The establishment of supplementary pensions has recently given rise to a ‘new politics’ putting pressure on policymakers, employers, and trade unions for regulatory harmonization between occupational funds and personal pension schemes.

This chapter examines the pension problem in France. The French pension situation follows the path of most Bismarckian pension institutions; it has long maintained a relative status quo despite several difficult reforms. Such institutions are difficult to reform because change affects the special interests of various privileged groups of workers. For reforms to pass, they must be negotiated with social partners. It remains unclear when and what type of pension funds will develop, who will be in charge of them, and how they will be invested.

This chapter traces the main and common characteristics of the reform trajectory followed by Continental European welfare systems. This trajectory can be divided into four main sequences. It then analyses what these welfare systems have become. Continental Europe witnessed the development of dual welfare systems, with a sharper line being drawn between contributory benefits and occupational insurance for core workers and a new but growing world of assistance and in-work/non-contributory benefits for ‘atypical’ workers and labour market outsiders. This dualisation of welfare is to be associated with transformation on labour market and developments in employment policies, but it also has to be attributed to the specificities of the politics of reforms in Bismarckian welfare systems. Negotiations between elite and representatives of core workers have indeed allowed reforms formerly conceived as unlikely, but the compromises have most often been made at the expense of outsiders

In the aftermath of war three styles of diplomacy existed: one, the old balance of power of contending alliances; two, Woodrow Wilson’s reliance on the power of democratic opinion to keep nations in line, and three Bismarck’s informal Concert which brought enemies and allies together. The first was discredited; the second was never to come into being; and the third was not tried. Had Bismarck’s concert been prolonged or reconstituted, however, a grouping of Austria, Germany, Russia and England might well have deterred Austria while bringing Russia into a consonant group.

The swift measures that followed the torchlight procession in Berlin on 30 January 1933, made it very clear that a continuation of politics under the Weimar Constitution was out of the question. With the suspension of the most important basic rights by the Decree of 28 February 1933, and the Enabling Act of 24 March 1933, the hated ‘interim constitution’, the ‘un-German interim Reich of anti-Bismarckian Marxism’, the ‘liberal Rechtsstaat’ was at an end. Still, many jurists entertained the illusion that the new regime, once the initial revolutionary phase was over, would establish itself as a ‘national Rechtsstaat’. The signing of the Reich Concordat in July 1933, the measures against unemployment, and the initial diplomatic successes of the regime did their part to feed the optimism that everything would return to the right track once the revolutionary ‘excesses’ had dissipated.

This chapter discusses the survival of unfunded social security systems in European countries and its impact on efficiency, redistribution, and citizen’s welfare. It analyzes two countries with identical economic fundamentals. Unfunded systems are established in each country and are mandatory for its citizens. A system is characterized by two parameters: the contribution rate on earnings; and the Bismarckian factor that determines the intragenerational redistribution operated by the system, which affects individuals in a different way according to their earnings. The chapter examines the situation in which the citizens of both countries can make a free choice of the system without having to move.

The interest of the Spanish welfare state for analyzing the evolution of social policy language is derived precisely from its peculiar historical development. Social policy was initiated in Spain in 1900. The development of social insurance followed the Bismarckian model from then until the end of Franco’s authoritarian regime in 1975. However, the Spanish welfare state has become a mix-model during the last 35 years of democratic rule. In fact, while the income-maintenance system remains broadly rooted in Bismarckian principles, health care, education, and, partially, social care services have been universalized following the social democratic model. This chapter analyzes the changes in social policy language, focusing especially on the periods of transition to democracy and consolidation. The chapter also compares the language used in different policy areas and whether it is in accordance with the principles in which they are grounded.

There does not exist a single model forthe welfare state in Europe. Each country has its own model, which is the result of its political and social culture and of its economic evolution. There exist a number of taxonomies of welfare states. In this chapter we favour a taxonomy based on two characteristics: the generosity and the redistributiveness of programs. The main interest of distinguishing among different types of social protection programs is the different implications they have in terms of efficiency, equity, and political sustainability. We observe a trade-off between efficiency and political support on the one hand and equity on the other hand. Other distinguishing features of the welfare state are analysed: individualization, activation, and responsabilization.

What are the consequences of the rise of the platform economy for the welfare state? The current chapter seeks to answer this question for Bismarckian welfare institutions. Platform economies have a significant impact on the labor market, especially in terms of the distinction between the employed and self-employed. One of the main challenges for traditional social insurance systems is that an individual’s employment status has to be clarified in order to correctly categorize them in the system of social contributions. How social insurance systems might respond to the challenges of the digital age and how structurally adaptable they are will be examined based on the examples of Germany and Austria as two very different institutional variants of Bismarckian systems. Beyond parametric adjustments, however, Bismarckian systems have significant institu-tional possibilities for adaptation, even to major changes in the labor market like those brought about by digitalization.

This chapter offers an in-depth look at health politics and the compulsory health insurance system in Austria. It traces the development of the Austrian healthcare system, characterized by its corporatist and federalist structures. Since the early 1990s, there has been a trend towards increased centralization of health planning, and, at several junctures, a departure from consensus politics to unilateral adoption of cost-containment measures, and the re-structuring of the health insurance system through a merger of the regional funds (despite a challenge in the Constitutional Court). Other healthcare issues have been long-term care, employment conditions of caregivers, and the quality of primary care.

France has been an “in between” case, neither prosperous nor declining, with a generous welfare state, strong employment protection, and modest income inequality. Elite values, the high political risks of large changes, and a political system that makes governments vulnerable to small shifts in opinion are among the causes. There has been no shortage of reforms, including supply-side policies and quests for new revenues, but without either harsh neo-liberalism or corporatist adaptability. France’s economy has been comparatively successful, but success has become harder, mainly because EMU has narrowed macroeconomic room for maneuver. High unemployment and dualism have tested the social contract while recent economic crises have tested EMU limits. Low growth reduces revenues and expands unemployment, and new taxation is politically disruptive. Governing political parties and the political system itself may be losing credibility because of deindustrialization, stagnant productivity, and losses in market share. Is France an unexploded ticking bomb?