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In this essay, part of our Navigating Economic Change series, Anke Hassel and Kathleen Thelen explore strategies for mitigating some of the income, job and educational inequalities that rich democracies are currently confronting as a result of technological change and the growing gap between winners and losers in the new knowledge economy.
The article reviews the recent advances in comparative political economy. It reconnects knowledge on growth regimes and welfare regimes by analyzing how growth and welfare regimes covary over both time and space. It underlines the fact that governments pursue different growth strategies to adjust to new economic environments, focusing in particular on welfare state reforms. Synthesizing the literature, we propose a definition of growth and welfare regimes that integrates different engines of growth as a way to track general trends in the evolution of capitalism. We analyze the main trends of three eras of capitalism: Fordism, neoliberal financialization, and the digitalized knowledge-based economy. We trace the various paths of change by identifying the five growth strategies governments have pursued to adapt their growth and welfare regimes to the new capitalist era. The result is not a typology of fixed types of capitalist models but a dynamic process of adjustment.
Expected final online publication date for the Annual Review of Political Science, Volume 26 is June 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
Governing the work-related risks of AI: implications for the German government and trade unions
(2023)
This article discusses the risks that artificial intelligence (AI) poses for work. It classifies risks into two types, direct and indirect. Direct risks are AI-induced forms of discrimination, surveillance and information asymmetries at work. Indirect risks are enhanced workplace automation and the increasing ‘fissurisation’ of work. Direct and indirect risks are illustrated using the example of the transport and logistics sector. We discuss policy responses to both types of risk in the context of the German economy and argue that the policy solutions need to differ according to the type of risk. Direct risks can be addressed by European and national regulation against discrimination, surveillance and information asymmetries. As for indirect risks, the first step is to monitor the risks so as to gain an understanding of sector-specific transformations and establish relevant expertise and competence. This way of addressing AI-induced risks at work will help to improve the prospects of decent work, fair remuneration and adequate social protection for all.
Executive Summary:
▪ The German government has taken decisive actions in response to the dual economic shocks linked to the Covid-19 pandemic and Russian gas supplies’ cut-off – with the main objective of protecting its export-oriented industrial economy.
▪ By engaging in "competitive corporatism," the coalitional government has worked closely with the social partners – especially representatives from the chemical and metalworking-engineering export sectors – to restore domestic firms’ cost competitiveness while providing social compensation to vulnerable households and individuals.
▪ The government's concerted threefold strategy to uphold the export-led growth regime includes: (1) measures aimed at reducing firms’ energy costs; (2) in/direct measures aimed at controlling the rise of labour costs to prevent a wage-price spiral; (3) substantial state aid provided to ailing firms.
▪ The scope of state intervention in Germany's economy is unparalleled, entailing significant fiscal outlays for protective measures, made possible by Germany’s advantageous sovereign refinancing capacity. Germany’s economic activism risks jeopardising the EU single market due to extensive state aid, especially since Germany resists joint fiscal resource pooling for EU-wide industrial policy.
The sharp increase in inflation across Europe over the last two years has led to calls from some actors for a policy of wage restraint to prevent a vicious circle of price rises. Yet as Martin Höpner, Anke Hassel and Donato Di Carlo write, the fact that “wage restraint” can be understood in multiple different ways has created confusion about the link between wages and prices.
The paper explores the role of social partnership for facilitating processes to reduce greenhouse gas emissions in Europe. Social partnership can help to facilitate the transition to lower emissions by negotiating the costs and benefits of climate reducing policies with the workers affected. At the same time, social partnership is stronger in sectors, which have high emissions and might be tempted to reduce the speed of phasing out high emission production processes. The paper uses data from the Structure of Earnings Survey to examine the relationship between bargaining coverage, unionization, wages and industry emissions in EU member states. It analyses these relationships in the context of different growth trajectories towards the knowledge economy. It finds that high-emitting industries tend to have higher profits, wages and lower wage inequality than others. Brown jobs, however, are not better jobs, but benefit from collective bargaining. At the same time, there are significant differences between the member states of the European Union. The paper concludes by discussing how social partnership deals with the dilemma of being rooted in fossil fuel industries while negotiating change.
While the effects of the platform economy on work are mainly studied through the lens of gig or cloud workers, many more employees are likely to be affected in non-platform firms or sectors. We discuss the mechanisms of platform economy’s impact on the employment relationships and indirect effect on employment trends. Platform firms enter the service economy with business models that put existing service providers under pressure and advance a platform model of employment relationship. However, their transformative force is limited by three factors: employment regulations, access to welfare provisions and the employment relations at legacy firms. We examine the case of Amazon logistics in the US, Germany and the UK and find that the employment contract, as a legal institution, prevents the dissemination of independent contracting as the preferred employment model. Moreover, the welfare state has a paradoxical effect on platform work: universal welfare and liberal employment law facilitate the rise of precarious work.
How to do Public Policy
(2022)
How to Do Public Policy offers a guide to students and practitioners on how to improve problem-solving with policies in a political world. It integrates insights from applied policy analysis and studies of the policy process to develop a framework that conceives policy-making as structured by two spheres of action - the 'engine room' of specialists and experts in government agencies, NGOs, research organizations etc., on the one hand, and the political
'superstructure' of politicians, key public stakeholders and the public, on the other hand. Understanding the different logics of the engine room and the superstructure is key for successful policy-making. The dual structure of policy-making provides a perspective on policy-analysis (interactive policy analysis)
and policy-making (actor-centred policy-making) that moves from the focus on individual and specific measures, towards understanding and shaping the relation and interaction between policy interventions, the institutional context and the stakeholders involved or affected. Part I of the book presents the basic analytical concepts needed to understand the policy process and the structures and dynamics involved in it, as well as to understand how and why actors behave the way they do-and how to
engage with different types of actors. Part II moves further into the nuts and bolts of policy-making, including policy design, implementation, and evaluation. Part III introduces and explores three key aspects of the capacity to make good policies: engagement with stakeholders, the process of policy
coordination in a context of interdependence, and the role of institutions.
Growth and Welfare in Advanced Capitalist Economies takes stock of the major economic challenges that advanced industrial democracies have faced since the early 1990s and the responses by governments to them. It has three goals: firstly, to further our understanding of how political economies have transformed over the past decades; secondly, to analyse the contribution of governments to these changes, by looking at their growth strategies and thirdly, to highlight and analyse the role of the reforms of welfare systems in this transformative change.
In a nutshell, this book maps and provides general understanding of the evolution of growth regimes in advanced capitalist countries. It identifies five main growth regimes in contemporary advanced capitalist economies (three export-led and two domestic demand-led ones). To do so the book combines a supply side approach to economic growth as advocated by the Varieties of Capitalism Literature (OUP, 2001) with a demand side perspective as the recent discussion on growth models has exemplified. It argues that all political economies consist of growth regimes, which are based on a set of institutions that shape the supply side of the economy as well as on demand drivers such as government spending and private consumption. Both supply and demand are heavily shaped by the welfare state which provides for skills through education systems and stimulates demand through high social spending and private pension funds. The book focuses on the analysis of welfare reforms as growth strategies pursued by governments in an era characterised by financialization and the rise of the knowledge economy.