The Politics of Privatizing Public Pensions: Lessons from a Frozen Welfare State.

This paper revises and amends the theoretical framework of "the new politics of the welfare state". It examines a deviant case: the partial privatization of public pensions in Germany’s frozen welfare state. After analyzing the paradox of major institutional change in a frozen welfare state, it makes suggestions to improve the three theoretical modules of the new politics framework: the theory of blame avoidance, interest group theories, and path dependence theory. Next it suggests two additional modules called institutional interference and creative opportunism. The argument is an explanation of major institutional change in frozen welfare states requires us to incorporate two additional causal forces for welfare state reform into our framework: the institutional goals and constraints embodied in the new fiscal institutions at the European level and the ideas and interests of governments. It also argues that the reform process is very different from welfare state adaptation to socioeconomic pressures: the politics of privatizing public pensions is highly conflictual and very risky, not negotiated and consensual as the politics of welfare state adaptation. [ABSTRACT FROM AUTHOR]