Private Sector Providers and Patterns of Privatization

Abstract

This chapter asks whether increasing power resources of private sector providers translate into influence in welfare state politics. When do governments introduce social policy reforms that expand the market for private providers? Does the presence of private sector providers make a difference for the output of reforms? The chapter analyses welfare state reforms in pension and hospital sectors in Germany and the UK between 1990 and 2010. Findings suggest that the presence of powerful private sector providers partially explains privatizing reforms—but this only holds for later periods of marketization and in conjunction with other factors such as left-wing party governments, institutional leeway, and socio-economic problem pressure. The comparison of sectors shows that private provider power is more relevant for explaining pension than hospital reforms.