The creeping disorganization of welfare capitalism or what is the future of Germany's social sector?

Abstract

Drawing on the debate over the destiny of the coordinated market economy versus the expanding liberal market model, this article argues that the analysis of the re-regulation of capitalism must address the embedding infrastructure of the market. Since social support sectors are an important part of this embedding infrastructure the article focuses on organizational change within Germany's social sector as a basis for a new perspective on the future of German welfare capitalism and develops a complimentary understanding of the “social sector economy.” The empirical discussion focuses on organizations providing social support services in a direct or indirect way, on the changing environments in which they operate, and on their strategies for coping with change. The discussion indicates that the German model is slowly but surely evolving toward a “disorganized” welfare capitalism shaped by both formal institutional stickiness and considerable change of the social sector's service provisions. While this change leads to more heterogeneous outcomes in terms of welfare it is also conducive to social innovation.