Explaining paradigmatic change in German labor market policy. A multiple streams perspective

The so called Hartz labor market reforms are judged as a paradigm shift in German labor legislation by many commentators (see the review of Raddat 2011). At the same time, these reforms are particularly difficult to explain from the point of view of established lenses of public policy research. From a partisan politics perspective, for example, it is hard to understand why a social democratic government that in its first four years tightened labor market regulation and increased social security benefits (as could be expected from the parties-do-matter-perspective) suddenly came up with a policy agenda that explicitly reversed these policies. Similarly, from a veto-player-theory point of view, König et al. (2003: 105) predicted that “in the economic domain, the Schröder government will have immense problems reforming the obsolete labour and investment regulations, in particular in the strong bicameral Zustimmungsgesetzgebung”. Only four months later, the government and the opposition parties that controlled the second chamber (the Bundesrat) reached an agreement on the most encompassing labor market reforms in living memory. Given the difficulties traditional theoretical approaches exhibit in explaining these labor market reforms, I suggest to look through a lens used less frequently (or hardly ever when it comes to explaining labor market policies or German politics in general), namely the Multiple Streams Approach (MSA), originally introduced by John Kingdon (1984). I show that the problems of the German labor market and welfare state were well known for a long time. So according to traditional approaches, this should make reforms likely. The MSA, however, argues that only when the government realized that unemployment was not falling as expected until the next election, the governing parties had a relevant indicator that the conditions on the labor market had to be changed, i.e. a problem existed. At the same time, the basic ideas of the Hartz legislation were around for quite some time and were actually considered in many networks around the government, i.e. the policy stream was ripe. Finally, for a long time, the adversarial conditions in the politics stream (sectoral corporatism, strong position of the ministry of labor that was close to the unions, strong traditionalist wing of the governing social democratic party) impeded the implementation of a structural labor market reform. Only when the policy entrepreneur Gerhard Schröder used a scandal to bypass the ministry of labor and the sectoral corporatism of German labor market policy by installing an independent expert commission was it possible to get the paradigm shift in labor market policy on the government agenda. In a further step, I show how the MSA can also be applied to explain the actual decision-making. References Kingdon, John, 1995 (1984): Agendas, Alternatives and Public Policy, New York et al.: Longman. König, Thomas/Blume, Till/Luig, Bernd, 2003: Policy Change without Government Change? German Gridlock after the 2002 Elections, in German Politics 12 (2): 86-146. Raddat, Claudia, 2011: Eine überraschende Reform? Politikwissenschaftliche Interpretationen und Erklärungsansätze zu Hartz IV, in: Zeitschrift für Sozialreform 57 (2): 221-236.