Abstract
This article explores the competing influences of institutional legacies and political negotiation in recent German social-protection reform. Long a paragon of consensus and gradual political change, the German political economy has adjusted poorly to the pressures of fiscal austerity and structural unemployment, creating pressures for an increasingly salient role for the federal government. The article provides a detailed analysis of recent German social-policy and labour-market reforms, arguing that existing literature is poorly equipped to account for this emerging policy-making paradigm. It also suggests that, while the German case illustrates the importance of institutional factors in shaping reform trajectories in advanced industrial democracies, careful attention must also be paid to élites' capacity for negotiating policy outcomes within these parameters.
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