Generating Legitimacy for Labor Market and Welfare State Reform-The Role of Policy Advice in Germany, the Netherlands, and Sweden

Article excerpt

1 Introduction (1)

Policy advice can help inform policy makers on societal problems, their causes and potential solutions, thus contributing to appropriate institutional reforms and effective societal problem-solving capacities. The relationship between scientific research and politics, however, is a delicate one, with the effective supply and transfer of policy advice depending on institutional prerequisites in both the science sector and the political system so that policy-relevant information can be generated and provided which can influence the choice and implementation of appropriate policies.

This paper first lays out some theoretical considerations on the potential of policy advice with special reference to the area of labor market and welfare state reform, emphasizing the role of policy advice in the generation of legitimacy or-at least-acceptance of often unpopular decisions on institutional reforms.2 We then present empirical evidence on the role of policy advice provided by research institutes, expert committees and other think tanks in social and labor market policy reform in three countries: Germany, the Netherlands, and Sweden. All three are developed welfare states with strong consensus requirements stemming from minority or coalition governments and a strong position of social partners. All faced the need for institutional change but reacted in different ways. Part of this variation can be explained by the role of policy advice. We therefore analyze the structure of policy advice and its actual function in recent labor market and welfare state reforms. In our analysis we focus particularly on the relationship between 'independent' expertise, social partner bodies and government. The paper shows to what extent the structure of policy advice in Germany inhibits the realization of its full potential regarding the design and legitimization of effective policies and why this is different in Sweden and the Netherlands.

2 The Potential of Policy Advice in Labor Market and Welfare State Reform

Welfare state and labor market reforms aiming at institutions that are consistent with sustainable economic activity and social policies often imply cutbacks on social policy programs, budget consolidation and increased flexibility of the labor market. In general, these issues are unpopular since they imply distributional effects with short-term losses to be experienced by powerful societal actors and social groups, whereas positive effects may take time (Pierson 1994). Therefore, welfare state and labor market reforms are risky and difficult in political terms and can only be adopted and implemented with sufficient legitimacy so that immediate opposition and allocation of blame is avoided (Weaver 1986, Pierson 1994). Otherwise, political actors may suffer from loss of political support. Status quo orientation of important segments of the electorate stabilizes existing institutions and forms barriers to reforms, thus contributing to strong 'path dependence' (Pierson 2000).

Science is fundamentally different from politics as it does not deal with acquiring or defending power in electoral campaigns but is autonomous and mainly oriented towards the academic discourse. It focuses on the identification of causal relationships between different factors, with economic and social science research into the labor market and the welfare state mainly exploring the effects of institutions on labor market and social outcomes.

In order to analyze the role of policy advice in welfare state and labor market reforms, it is useful to differentiate between the concepts of 'puzzling' and 'powering' (Heclo 1974, Hemerijck/Schludi 2000). Puzzling points at the process of identifying problems and possible solutions, whereas powering means the struggle for political support needed to safeguard the acceptance of reforms. In principle, policy advice from science can provide valuable input for both the puzzling and the powering phase in policy-making. …