Herbert Kitschelt, Wolfgang Streeck, eds. Germany: Beyond the Stable State. London: Frank Cass, 2004. 266 pp. ISBN 978-0-7146-8473-4; ISBN 978-0-7146-5588-8.

Reviewed by Mark Vail (Department of Political Science, Tulane University)
Published on H-German (June, 2006)

Intimations of Stability

This volume makes some important contributions to the scholarly literature on German politics, society and economy. It provides a concise overview of contemporary developments across a wide range of issue areas--including developments in the welfare state and labor market; partisan strategies in federal elections; Germany's changing role in European integration; and the shifting dynamics of social protest movements. Consequently, it will be quite a useful resource for both specialists in German politics and a wider readership interested in Germany's changing place in an evolving Europe.

That said, the volume makes less theoretically of its own empirical contributions than it might, relying too much on well-worn images of German "stagnation" and associated portraits of the country's "semi-sovereignty"[1] and its consequent incapacity to adjust politically and economically. The editors argue that the very features that enabled the German political economy to flourish during the postwar boom under conditions of broad societal and political consensus (divided political authority, multiple veto points, and so on) have led it to languish during the more recent period of economic austerity, slow rates of economic growth and pressures on German fiscal policy (which have been particularly intense since the advent of reunification in 1990). During this recent period, they argue, "the incrementalism and stability of German political institutions became fetters of productive adjustment and of creative coping with new situations" (p. 25). Herein lies the book's overarching claim, which is stated clearly and reiterated throughout. It is, however, one that both accepts rather uncritically somewhat outdated conventional wisdoms on German politics and policy and that is actually contradicted by the empirical accounts contained in many of the book's own contributions.

In point of fact, Germany has changed quite significantly during the past decade and a half (particularly in some areas, such as labor-market policy and pensions), providing evidence against such arguments about the country's purported incapacity to adjust to the challenging economic and social circumstances of the post-reunification period. This pattern of adjustment (more successful in some areas than others, to be sure) has characterized both policy outcomes across a range of issue areas and the political drivers of reform in the German political system--drivers which much of the established literature on German politics identify as the sources of the country's ostensible sclerosis. As a result, the volume's claims about Germany's apparently permanent incapacity to adjust exist in some tension with many of its chapters' insights into the character and dynamics of German political, social and economic change.

This tension between the book's theoretical claims and the empirical evidence that it presents becomes apparent from its first pages. Arguing in the introduction that the German political economy is suffering from an ongoing "crisis," the editors state as their aim "not to speculate about the duration of the crisis ... but to contribute to the analysis of its origins and current dynamics" (p. 2). Soon thereafter, they declare that "there is little hope for the German political system to overcome its present immobility, making continued social and economic decline the most likely scenario for the future" (p. 2). Such a dim prognosis both understates Germany's institutional capacity for innovation and adjustment and fails to recognize many significant changes that have actually taken place. Many of these developments are recognized and detailed in some of the individually authored contributions--including, for example, the excellent chapter by Jürgen Beyer and Martin Höpner on corporate governance reform. In a limitation that it shares with other parts of the literature on German politics and political economy, this volume finds itself unable to leave behind images of German "consensus politics" and political gradualism, led thereby to draw unnecessarily pessimistic conclusions and failing to recognize or explain much of the change that the German system has actually undergone.

Some of the book's constituent chapters provide excellent accounts of aspects of this change. The chapter by Charlie Jeffery and William Patterson, for example, furnishes a refreshing and insightful account of Germany's role in the EU. The authors argue--and rightly so, in this author's view--that recent German politics have been marked by a decline in consensus and a recognition of the limitations of the European project, including the fact that "exporting" social policy to the EU level remains a pipe dream (p. 66), in which, they imply, even its traditional advocates no longer seem to believe. More generally, the chapter reflects the welcome recognition that the EU remains a forum for the pursuit of national political and economic agendas rather than any emerging transnational polity. In their words, "policy actors need to be seen to be protecting domestic interests; the old permissive consensus on Europe is gone" (p. 70).

The Beyer and Höpner chapter on recent corporate governance reform forces the reader to rethink many received wisdoms about the role of German financial institutions in corporate investment and in shaping firms' economic strategies. The authors show quite convincingly that the traditional postwar German model that enshrined banks as the coordinators of the German economy has largely dissolved and that "banks now refuse to be the guarantors of the public or national interest" (p. 195). It would be difficult to overstate the significance of this change, which the authors interpret as evidence of the very "disintegration of organized capitalism" (p. 195). They end with the welcome recognition--one of the many whose incorporation by the editors would have increased the theoretical purchase of the volume as a whole--that "the substantial changes in corporate governance in the 1990s certainly made it clear that not all German institutions are as stable as many observers believe" (pp. 195-196).[2]

The chapter by Streeck and Anke Hassel on German social partnership, likewise, is among the volume's strongest. Well written and forcefully argued, it details the "decay" of the postwar model of social partnership and its replacement with a much more decentralized and disorganized model (pp. 109-112). Just as in the case of corporate governance reform, the shock of reunification and the intensification of international economic pressures have led to major changes in the framework of negotiation between business and labor and between the social partners and the state. Although a few of the chapter's claims are quite contestable (for example, the odd assertion (p. 116) that the 2000 Riester pension reform represented a concession to the unions), and despite the fact that the authors fail to recognize some important developments that would bolster their core claims (such as the state's increasingly unilateral role in enacting labor-market reforms in response to the failures of the Federal Labor Office), the essay does, by and large, make an important contribution to scholarly understandings of the sources and dynamics of shifting patterns of German political and social negotiation.

These gems are, however partially overshadowed by other contributions that are more disappointing. Many of them (such as the chapter by Stephan Leibfried and Herbert Obinger on the welfare state) suffer from the same shortcoming of the volume writ large--notably a rather uncritical acceptance of the clichés of German political "consensus" and stagnation and a failure to explore the theoretical significance of the developments that they detail. Others (such as the implicitly normative chapter by Dieter Rucht on protest movements and the piece by Karl Ulrich Mayer and Steffen Hillmert on changing social structure and educational patterns) lack a cogent analytical argument and thus a clear relationship to the project of the volume as a whole.

Despite its theoretical shortcomings and the uneven quality of its constituent chapters, however, this book provides much useful information and a number of helpful syntheses on recent developments in German politics and society in the challenging post-reunification environment. As a result, it merits attention by specialists on German politics, and, to a somewhat lesser extent, by non-specialists interested in understanding the shifting dynamics of adjustment in Europe's largest economy at one of the most difficult periods in its postwar history.

Notes

[1]. The seminal work in this tradition, which emphasizes institutional features of the German system that constrain political-economic change, is Peter J. Katzenstein, Policy and Politics in West Germany: The Growth of a Semisovereign State (Philadelphia: Temple University Press, 1987).

[2]. For a superb analysis of the dynamics of recent German corporate governance reform, see John W. Cioffi, "Expansive Retrenchment: The Regulatory Politics of Corporate Governance Reform and the Foundations of Finance Capitalism in the United States and Germany," in The State After Statism: New State Activities in the Age of Globalization and Liberalization, ed. Jonah Levy (Harvard: Harvard University Press, forthcoming).

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Citation: Mark Vail. Review of Kitschelt, Herbert; Streeck, Wolfgang, eds., Germany: Beyond the Stable State. H-German, H-Net Reviews. June, 2006.
URL: http://www.h-net.org/reviews/showrev.php?id=11882

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