Skip to main content Accessibility help

What do workers want? Institutional complementarity as a mechanism of social change

  • Arie Krampf (a1)


This article presents a theory of social protection expansion in late-developing open economies based on actors’ perceptions of complementarity. Drawing on recent theories of institutional change and political economic theories of welfare regimes, the article explains why in late-developing open economies, processes of liberalization often result in social welfare expansion. The explanation is based on the existence of institutional complementarity between the production regime and the social welfare regime. The article offers an agent-based theory of change according to which actors – state or market actors – are likely to promote welfare expansion amid their expectations of higher payoffs and/or improved performance of the liberalized economy. This theory challenges the more conventional Power Resource Theory, according to which welfare regimes are shaped primarily by the balance of power between workers and employers. To test the theory, the article analyzes the enactment of the unemployment insurance law in Israel (1972).


Corresponding author

*Corresponding author. Email:


Hide All
Acemoglu, D., and Shimer, R. (2000), ‘Productivity Gains from Unemployment Insurance’, European Economic Review, 44(7): 11951224.
Al Hamishmar (1966), ‘Mapam: Cooperation through Struggle’, Al Hamismar, 7 December.
Al Hamishmar (1969), ‘Golda Meir Introduced the Government’, Al Hamishmar, 16 December.
Allon, Y. (1962), ‘Summaries and Trends’, Labor and National Insurance 8: 317 (Hebrew).
Allon, Y. (1963), ‘The Operation of the Ministry of Labor, 1963/4’, Labor and National Insurance 3: 8388 (Hebrew).
Amable, B. (2000), ‘Institutional Complementarity and Diversity of Social Systems of Innovation and Production’, Review of International Political Economy, 7(4): 645687.
Amable, B. (2016), ‘Institutional Complementarities in the Dynamic Comparative Analysis of Capitalism’, Journal of Institutional Economics, 12(1): 79103.
Aoki, M. (2001), Toward a Comparative Institutional Analysis. Comparative Institutional Analysis, Cambridge, Mass: MIT Press.
Aoki, M. (2007), ‘Endogenizing Institutions and Institutional Changes’, Journal of Institutional Economics, 3(1): 131.
Bar'am, M. (1968), ‘Committee on the Examination of Proposals for Ensuring Employment and Insurance against Unemployment Bill’, Labor and National Insurance 8: 255258 (Hebrew).
Bareli, A. and Cohen, U. (2018), The Academic Middle-Class Rebellion: Socio-Political Conflict over Wage-Gaps in Israel, 1954–1956, Leiden; Boston: BRILL.
Barkai, H. (1998), The Evolution of Israel's Social security System: Structure, Time Pattern and Macroecomomic Impact. Aldershot, UK; Brookfield, VT: Ashgate.
Bartour, M. (1960), ‘M. Bartour to Levi Eshkol’, 28 August [Letter], Israel State Archive (ISA) ISA-PMO-PrimeMinisterBureau-000u73f.
Bar-Yosef, R. (1970), ‘Report of the Committee on Unemployment Insurance’, Labor and National Insurance, 9: 371378 (Hebrew).
Ben Porat, A. (1999), A History of the Israeli Bourgeoisie, Jerusalem: Magnes Press (Hebrew).
Bergman, A. and Marom, A. (1998), Productivity and Its Causes in the Israeli Industry, 1960–1996. Bank of Israel, Research Department (Hebrew).
Blyth, M. (2003), ‘Same as it Never Was: Temporality and Typology in the Varieties of Capitalism’, Comparative European Politics, 1(2): 215225.
Boyer, R. (2014), ‘Welfare States and Institutional Complementarity: From North to South’, Geneva: United Nations Research Institute for Social Development.
Chan, H.-S. (2008), ‘The Development of Social Welfare Policy in Taiwan: Welfare Debates between the Left and the Right’ [Manuscript online] (accessed 1 February 2019)
Crouch, C. (2005), ‘Three Meanings of Complementarity’, Socio-Economic Review, 3(2): 359363.
Crouch, C. and Farrell, H.. (2004), ‘Breaking the Path of Institutional Development? Alternatives to the New Determinism’, Rationality and Society, 16(1): 543.
Davar, (1966), ‘Bank of Israel Prefers Unemployment Insurance over Relief Work’, Davar, 23 October.
Deeg, R. and Jackson, G.. (2007), ‘Towards a More Dynamic Theory of Capitalist Variety’, Socio-Economic Review, 5(1): 149179.
Doron, A. and Kramer, R. M. (1992), The Welfare State in Israel, Jerusalem: Am Oved (Hebrew).
Economic Council Secretariat (1966), Three Year Plan, 1967–1969. 25 August. Labor Movement Archive (LMA), 2-7-1962-245.
Esping-Andersen, G. (1990), The Three Worlds of Welfare Capitalism, Princeton, NJ: Princeton University Press.
Estevez-Abe, M., Iversen, T. and Soskice, D. (2001), ‘Social Protection and the Formation of Skills: A Reinterpretation of the Welfare State’, in Hall, P. A. and Soskice, D. W. (eds), Varieties of Capitalism, pp. 145–83.
Gal, J. (1997), “Unemployment Insurance, Trade-Unions and the Strange Case of the Israeli Labour Movement.International Review of Social History, 42: 357396.
Gal, J. (2010), “Is There an Extended Family of Mediterranean Welfare States?Journal of European Social Policy, 20(4): 283300.
Greenberg, Y. (2011), Pinchas Sapir: An Economic and Political Biography, Tel Aviv: Resling (Hebrew).
Greenwald, C. S. (1972), Recession as a Policy Instrument: Israel 1965–1969, London: C. Hurst.
Gutwein, D. (2017), ‘The Class-Logic of the “Long Revolution”, 1973–77’, Iyunim Bitkumat Yisrael, 11: 2157 (Hebrew).
Hall, P. A. and Gingerich, D. W.. (2004), ‘Varieties of Capitalism and Institutional Complementarities in the Macroeconomy: An Empirical Analysis’, MPIfG Discussion Paper 04/5.
Hall, P. A. and Soskice, D. W. (eds) (2001), Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford [England]: Oxford University Press.
Hall, P. A. and Thelen, K.. (2009), ‘Institutional Change in Varieties of Capitalism’, Socio-Economic Review, 7(1): 734.
Hay, C. (2005), ‘Two Can Play at That Game… Or Can They? Varieties of Capitalism, Varieties of Institutionalism’, in Coates, D. (ed.), Varieties of Capitalism, Varieties of Approaches, London: Palgrave Macmillan, pp. 106121.
Hiscox, M. J. (2001), ‘Class versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade’, International Organization, 55(1): 146.
Histadrut (1967), Committee on Unemployment Insurance, 17 April. LMA, IV-104-412-7.
Histadrut (1969), Committee on Unemployment Insurance, 19 February. LMA, IV-104-412-7.
Hoffnung, M. (2006), Protest and Butter: The Influence of the Black Panther Demonstrations on Social Welfare Budgeting, Jerusalem: Nevo (Hebrew).
Howell, C. (2003), ‘Varieties of Capitalism: And Then There Was One?Comparative Politics, 36(1): 103124.
Iversen, T. (2005), Capitalism, Democracy and Welfare, Cambridge, UK; New York: Cambridge University Press.
Kapstein, E. B., and Milanović, B. (2003), Income and Influence: Social Policy in Emerging Market Economies, Kalamazoo, MI: W. E. Upjohn Institute.
Kathleen, T. (2001), ‘Varieties of Labor Politics in the Developed Democracies’, in Hall, P. A. and Soskice, D. W. (eds), Varieties of Capitalism, pp. 71103.
Kleiman, E. (1981), ‘Israel: Economists in a New State’, History of Political Economy, 13(3): 548578.
Knesset (Different dates), Knesset Minutes [Divrei Ha'knesset], Jerusalem: State of Israel.
Koreh, M. (2015), ‘The Political Economy of Social Insurance: Towards a Fiscal-Centred Framework’, Social Policy & Administration, 27(2): 158172.
Koreh, M. (2017), ‘The Fiscal Politics of Welfare State Expansion: The Case of Social Insurance in Israel’, Journal of European Social Policy, 27(2): 158172.
Korpi, W. (2006), ‘Power Resources and Employer-Centered Approaches in Explanations of Welfare States and Varieties of Capitalism: Protagonists, Consenters, and Antagonists’, World Politics, 58(2): 167206.
Krampf, A. (2010), ‘Economic Planning of the Free Market in Israel during the First Decade: The Influence of Don Patinkin on Israeli Policy Discourse’, Science in Context, 23(4): 507534.
Krampf, A. (2013), ‘Liberalization and Universal Unemployment in Israel’, Social Security, 91: 2957 (Hebrew).
Krampf, A. (2015), The National Origin of the Market Economy: The Development of the Israeli Capitalism. Jerusalem: Magnes University Press (Hebrew).
Krampf, A. (2018), The Israeli Path to Neoliberalism: The State, Continuity and Change (Routledge Studies in Middle Eastern Economies), Milton Park, Abingdon, Oxon; New York, NY: Routledge.
Kwon, S. and Holliday, I.. (2007), ‘The Korean Welfare State: A Paradox of Expansion in an Era of Globalisation and Economic Crisis’, International Journal of Social Welfare, 16(3): 242248.
Levi-Faur, D. (2001), The Visible Hand: State-Directed Industrialization in Israel. Jerusalem: Yad Ben-Zvi Press (Hebrew).
Lifschiz, D. (1959), ‘D. Lifschiz to the Minister of Foreign Affairs’, 9 July. ISA, ISA-PMO-PrimeMinisterBureau-000u73f.
LMEC (1967), Labor Movement Economic Council Secretariat Session, 10 January, LMA, 2-7-1967-41.
LMEC (1969), Labor Movement Economic Council Session, 11 June, LMA, 2-7-1969-46.
Mandelkern, R. (2016), ‘The New Economic Policy of 1962: How Israeli Economists Almost Changed the Israeli Economy’, Israel Studies Review, 31(2): 4160.
Mares, I. (2003), The Politics of Social Risk: Business and Welfare State Development, Cambridge, UK; New York: Cambridge University Press.
Martin, C. J. and Thelen, K. (2007), ‘The State and Coordinated Capitalism: Contributions of the Public Sector to Social Solidarity in Postindustrial Societies’, World Politics, 60(1): 136.
MEC (1964a), Ministerial Economic Committee Session, 18 October, ISA.
MEC (1964b), Ministerial Economic Committee Session, 1 November, ISA.
MEC (1964c), Ministerial Economic Committee Session, 22 November, ISA.
Mobility (1967), ‘Labor Mobility: Report of the Committee on Labor Mobility in Israel’, Labor and National Insurance, 5: 147153.
Navon, T. (2016), ‘The Recession: A Milestone in the Political Economic History of Israel, 1964–1967’, Iyunim Bitkumat Yisrael, 26: 429438 (Hebrew).
Nijhuis, D. O. (2009), ‘Revisiting the Role of Labor: Worker Solidarity, Employer Opposition, and the Development of Old-Age Pensions in the Netherlands and the United Kingdom’, World Politics, 61(2): 296329.
Nölke, A. (2016), ‘Economic Causes of the Eurozone Crisis: The Analytical Contribution of Comparative Capitalism’, Socio-Economic Review, 14(1):141161.
Pardo, S. (2013), ‘The Year That Israel Considered Joining the European Economic Community’, Journal of Common Market Studies, 51(5): 901915.
Party Bureau (1968), Labor Party Bureau Session, 22 February, LMA, 2-25-1968–21Alef.
Pierson, P. (2001), ‘Introduction: Investigating the Welfare State at Century's End’, in Pierson, P. (ed.), The New Politics of the Welfare State, Oxford: Oxford University Press, pp. 116.
Polanyi, K. (2001), The Great Transformation, Boston: Beacon Press.
Raphael, A. (1969), ‘Plans for Creating an Unemployment Fund’, Ma'ariv, 30 December.
Rodrik, D. (1998), ‘Why Do More Open Economies Have Bigger Governments?Journal of Political Economy, 106(5): 9971032.
Rom, M. (1964), ‘Custom Unions and GATT’, Economic Quarterly, 11(43): 231242.
Rosenhek, Z. (2002), ‘Social Policy and Nation-Building: The Dynamics of the Israeli Welfare State’, Journal of Societal & Social Policy, 1(1): 1531.
Rothstein, B., Samanni, M., and Teorell, J. (2012), ‘Explaining the Welfare State: Power Resources vs. the Quality of Government’, European Political Science Review, 4(1): 128.
Semyonov, M. and Lewin-Epstein, N. (1987), ‘Non-citizen Arabs in the Israeli Labor Market: Entry and Permeation’, Megamot, 30(4): 402416 (Hebrew).
Shalev, M. (1992), Labour and the Political Economy in Israel (Library of Political Economy), Oxford: Oxford University Press.
Shalev, M. (2007), ‘The Welfare State Consensus in Israel: Placing Class Politics in Context’, in Mau, S. and Veghte, B. (eds), The Welfare State, Legitimacy and Social Justice, Aldershot, UK: Ashgate, pp. 193213.
Streeck, W. (2005), ‘Requirements for a Useful Concept of Complementarity’, Socio-Economic Review, 3(2): 363366.
Streeck, W. and Thelen, K. A. (2005), ‘Introduction: Institutional Change in Advanced Political Economies’, in Streeck, W., and Thelen, K. A. (eds), Beyond Continuity: Institutional Change in Advanced Political Economies, Oxford: Oxford University Press, pp. 339.
Summary and Recommendation (1966), ‘Summary and Recommendation of the Committee on Labor Mobility’, no date. ISA, ISA-moital-moital-0003382.
Svirski, S. and Bernstein, D.. (1980), ‘Who Worked in What, for Whom and for What?Notebook for Research and Criticism 4: 566 (Hebrew).
Swenson, P. (2002), Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden, Oxford; New York: Oxford University Press.
Yoseftal, G. (1960), ‘Summaries and Lines of Action: A Speech of Giora Yoseftal in the Parliament’, Labor and National Insurance, 4: 312 (Hebrew).


Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed