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The Origins of Policy Ideas in German Pension Debates

Published online by Cambridge University Press:  22 November 2024

Nils Röper Open the ORCID record for Nils Röper [Opens in a new window]
Nils Röper*
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University of Konstanz
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Email: nils.roeper@gmail.com
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Abstract

Understanding the origins of policy ideas can be crucial when trying to explain dynamics of political change and continuity. Paradigmatic changes in the German pension system have been attributed to the import of “foreign” neoliberal policy ideas from transnational organizations and other countries. The literature describes such processes as policy diffusion, transfer, or translation. In contrast, this article argues that foreign pension ideas did not have a substantive influence on local policy innovations and preference-formation processes. Instead, pension policy pioneers developed their ideas predominantly “from within” through bricolage by reconfiguring long-standing domestic schools of thought. Drawing on a wide range of primary and secondary sources, the analysis combines a broad historical perspective with case studies of individual policy makers. This sheds new light on the careers of ideas and why significant actors pick them up at certain points.

Keywords

German PensionsEuropean welfare statespolicy transfer

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Type
Critical Perspective
Information
Journal of Policy History , Volume 36 , Issue 4 , October 2024 , pp. 400 - 419
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Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
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© The Author(s), 2024. Published by Cambridge University Press in association with Donald Critchlow

Introduction

Where do policy ideas come from, how do they travel, and how do they become enshrined in laws or practiced norms? Rich bodies of literatures on the diffusion,Footnote 1 transfer,Footnote 2 or translationFootnote 3 of policy ideas have explored these questions. Despite considerable controversy within this scholarship, they all share a fundamental assumption: the policy ideas that provide templates for policy change and oftentimes shape the preferences of national actors are conceived and developed not domestically but abroad.Footnote 4 Such tendencies toward an exogeneity bias may hardly be surprising in the context of approaches advancing an international perspective on policy change, but it also prevails in much of the more domestic ideational literature. A vibrant strand of institutionalist literature has emerged that shares a fundamental belief in the “transformative power of ideas and discourse.”Footnote 5 Although strands of ideational institutionalist and public policy literature differ in emphasis with respect to the role they attribute to ideas and discourse, they implicitly or explicitly tend to assume exogenous ideational origins.

The pioneering ideational institutionalist literature in comparative political economyFootnote 6 already recurred to diffusion arguments to explain origins of ideational change.Footnote 7 Peter Hall’s policy paradigm framework is particularly instructive in this context.Footnote 8 Even though the paradigm literature may seem to take a more domestic perspective, origins of change are often theorized and traced along an axis reaching from the international to the national level. Scholars have traced the processes through which ideas gain authority in networks of academics and professionalsFootnote 9 and are pushed by international organizationsFootnote 10 and networks of international policy advocates.Footnote 11 Not all studies of paradigm shifts deal specifically with the origins of the ideas that they study. In such accounts, the question of where a new paradigm originated—that is, from where it gained its ideational substance and intellectual authority—is often bracketed in favor of a more singular focus on how the ideas gained prominence within a specific policy area or polity.Footnote 12 This, by implication, upholds the international-to-national-level approach that is dominant within much research on policy paradigm shifts. Even those who take issue with the exogeneity axiomFootnote 13 “continue to hold the view that policy ideas themselves are generated externally.”Footnote 14

Although there is little doubt that the international spread of ideas is critical for understanding both the ascendance and demise of policy paradigms, this article contributes to research exploring “the national origins of policy ideas”Footnote 15 and mechanisms of ideational-institutional change from within.Footnote 16 Drawing on mechanisms of marginal institutional change, it advances a more domestic perspective, where substantive change accrues from recombining and reinterpreting ideas and institutions.Footnote 17 This research agenda has generated a variety of important mechanisms or types of gradual change. These conceptions—including layering, conversion, translation, and bricolage—assume that a “multiplicity of institutional repertoires, including contradictory ones, can coexist in a particular institutional space.”Footnote 18

This article draws on the concept of bricolage, which refers to the rearranging, recombining, reinterpreting, and maintaining of logics of action or policy ideas, some of which might be reactivated after having lain idle for some time—that is, “the recombination only of old locally given ones.”Footnote 19 The main difference between bricolage and global approaches such as diffusion or translation refers to the question of whether policy ideas that differ from the status quo are of domestic or foreign origin.Footnote 20 In seeking to bridge this divide between global and domestic perspectives, recent literature distinguishes between the substantive and the symbolical influence that foreign ideas may have on local policy making.Footnote 21 Substantive exogenous ideational influence means that foreign policy ideas or transnational actors play a genuinely causal role in providing a policy template for domestic policy entrepreneurs and/or shaping their fundamental preferences. In contrast, if foreign ideas are merely used to underscore preferences that had already been formed—for example, as framing devices—their influence is symbolic. Making this distinction enhances our understanding of ideational origins and policy-making processes in various ways. It requires a historical perspective on the career of ideas and close investigation into how and why significant actors use them at what point.

In bringing this perspective to bear on pension politics, this article revisits the most thoroughly studied policy domain within the subfield of global social studies. Especially the spread of pension privatization reforms beginning in the 1980s has drawn tremendous scholarly attention.Footnote 22 Whereas some authors focus on the transnational advocacy of actors such as the World BankFootnote 23 and others on the diffusion among peer countries,Footnote 24 they all consider the policy ideas underlying pension liberalization as conceived and developed exogenously as “global ideas”Footnote 25 that provide templates for policy change and oftentimes shape the preferences of national actors.

Pension systems are widely considered a prime example of a path-dependent institutional domain.Footnote 26 The legacy of long-term contractual pension commitments, particularly in pay-as-you-go (PAYG) systems, constrains policy makers’ room to maneuver. Tremendous set-up costs and the “double-payment problem” during the shift to a prefunded system make an exit from PAYG funding unlikely.Footnote 27 The German postwar pension arrangement constituted the almost ideal typical “conservative” pension system.Footnote 28 The 1957 pension reform instigated the one-pillar social insurance paradigm, with public PAYG pensions alone considered to be responsible for ensuring the achieved living standard into old age.Footnote 29 Whereas, even in the mid-1990s, “a fundamental rethinking of social policy seem[ed] a remote possibility”Footnote 30; the Pension Reform Act 2001 introduced tax-subsidized funded schemes for occupational and private pensions in what many consider a paradigm shift toward multipillarization.Footnote 31

The 2001 Pension Reform Act took (institutionalist) scholars by surprise, as they considered the German pension system to be “the least likely candidate for reform.”Footnote 32 To explain this paradigm shift, many reconsidered the role of ideas and discourse.Footnote 33 Albeit heavily studied, we still know little about the origins of the policy ideas underlying the pension paradigm shift.Footnote 34 Central importance has been attributed to exogenous ideational influences, as Germany’s shift toward multipillarization, at least in broad strokes, adhered to demands by the World Bank and the OECDFootnote 35 and foreign pension systems featured saliently in public discourse.Footnote 36

In contrast, this article argues that the origins of the ideas underlying the German pension paradigm shift are best understood through the lens of bricolage, which considers policy innovations as reactivated and recombined local policy ideas that had lain idle. Pension policy pioneers predominantly developed their ideas from within by reconfiguring traditional domestic schools of thought and concepts from other policy fields. The policy ideas often attributed to global liberalization were not imported from abroad but are actually reactivated “minority discourses” that had long been present in the national polity. Policy ideas of pension multipillarization had been conceived and advocated before transnational actors began their global campaign or foreign models such as Chile emerged in the 1980s. This is not to deny any form of isomorphic imitation or learning from practices elsewhere among German policy makers but emphasizes that the primary role of foreign models during this pension paradigm shift was to serve as framing devices rather than substantive inspiration for the development of policy innovations or local preference formation processes.

The existing literature suggesting that German pension politics have been substantially shaped by foreign policy ideas has provided scarce evidence. Drawing on a wide range of primary and secondary sources, the analysis herein surveys pension ideas during the postwar decades and examines the influence of foreign ideas and transnational actors on major policy pioneers and public discourse more broadly during the 1980s and 1990s.

This historical perspective combined with an actor-centered analysis helps shed new light on this central case in the welfare state literature. Germany was in many ways the pioneer of the modern welfare state and stood at the beginning of what may be considered the first wave of pension diffusion.Footnote 37 An empirical lynchpin of historical institutionalist theory, the German pension system is embedded in a polity replete with veto playersFootnote 38 and veto points,Footnote 39 amounting to a “joint-decision trap”Footnote 40 in one of the stickiest of “deep equilibria”Footnote 41 that was considered impervious to substantive change. If bricolage is at work in this least-likely case, it might corroborate claims that highly path dependent-domains require bricolage to induce change.Footnote 42

Research Strategy

Beyond theorizing, the influence of foreign ideas is a thorny empirical question. Rather than a discrete “test,” I pursue illustrative “explaining-outcome” process tracingFootnote 43 to show that foreign pension ideas did not have a substantive influence on the development of German pension policy innovations and local preference formation. The analysis proceeds in three steps.

First, if foreign pension ideas had played a substantive role in terms of idea generation or preference formation, local actors should have only started advocating these ideas after their diffusion or translation from somewhere else. By surveying the political fault lines around competing pension policy ideas during the postwar decades, I track whether (ordoliberal) multipillarization ideas had been present in Germany as minority discourses before the global diffusion wave is said to have spread from “laboratory countries”Footnote 44 in the early 1980s.

Second, focusing on German pension debates of the 1990s, I revisit the influence of the three main exogenous ideational sources identified by the pension diffusion literature: The World Bank’s Averting the Old Age Crisis publication,Footnote 45 OECD recommendations, and reform experiences in Chile.

Third, if imported ideas had substantively inspired German pension debates during the 1980s and 1990s, they should have shaped the conception of multipillarization ideas by policy pioneers. Such pioneers tend to be experts who are most likely to look abroad for input.Footnote 46 I focus on four policy makers who, according to secondary literature, have conceived significant pension policy innovations.Footnote 47 The episode of policy making under examination ended almost 20 years ago, which means that subjects can be expected to be liberated from political and other constraints to speak freely, whereas, on the other hand, the researcher needs to be mindful of memory lapses and potential tendencies of subjects to overstate their cognitive autonomy as well as their interest in promoting a particular version of their legacy. To contextualize and verify the interview data, I draw on primary sources pertaining to the original publications of the policy innovations in question and embed this micro-level actor-centered perspective in a consideration of the macro-level sociopolitical environment.

German Ideas of Pension Multipillarization (1950s–1970s)

(Ordo)Liberal Pension Ideas in Postwar Germany

In the comparative capitalism literature, postwar Germany is widely considered the archetype of a coordinated, embedded, organized, or nonliberal market economy. Initially, however, ordoliberalism emerged as the guiding principle of German postwar (economic) policies. Skeptical of concentrated economic power and collectivism, disciples of the Freiburg School advocated a blend of a strong regulatory state with maximum individual freedom that “was born as an explicit anti-welfare doctrine during the 1920s and 1930s.”Footnote 48 This economic canon turned politics under the slogan of the “social market economy” in 1948 when ordoliberal economics minister Ludwig Erhard orchestrated the first major currency and tax reform with the Western Allies.Footnote 49 The immediate success of these reconstruction measures surpassed all expectations, and Erhard was widely celebrated as the architect of the “economic miracle.” Ordoliberalism reigned supreme, and Erhard was well on the way to enshrining his doctrine.Footnote 50

One easily forgets that if Erhard and his fellow neoliberalsFootnote 51 had had their way, German postwar capitalism would have likely followed a markedly different trajectory: “The German ordoliberals sought their own response to the Social Question, in constant fear of what they regarded as the ultimate destructive powers of socialist organizing in mass production and society at large—exemplified by trade-union ‘monopolies’ and the welfare state.”Footnote 52 Erhard envisioned a system that contrasted with notions of a paternalistic welfare state, as market forces would “prevent unequal distribution of income and capital from the outset by avoiding monopolization and other competitive distortions.”Footnote 53 Up until the mid-1950s, it appeared as if Ordnungspolitik could make interventionist social policy and Bismarckian self-administrating public bodies obsolete.Footnote 54 At that point, however, it became increasingly clear that market allocation mechanisms struggled to provide the desired social outcomes. The misery of many pensioners and widespread fear of old-age poverty among the working population made public pensions “the Achilles heel of the social market economy.”Footnote 55

Myriad ad hoc laws (Kriegsfolgegesetze) that were intended to alleviate the most pressing hardships catered to different categories of victims individually, leaving behind a convoluted patchwork of social laws.Footnote 56 In light of this situation, chancellor Adenauer declared a comprehensive social reform to be his “absolute domestic top priority” in 1955.Footnote 57 The blueprint for reform came from political economist Wilfrid Schreiber, who proposed “dynamized” pensions (meaning that annual increases in benefits correspond to the development of gross wages) and PAYG financing.Footnote 58 Chancellor Adenauer deemed the Schreiber Plan electorally auspicious,Footnote 59 and it also garnered support from the labor wing of the conservative Christian Democratic Union (CDU), the umbrella organization of German trade unions and the Social Democratic Party.Footnote 60 Henceforth this coalition would push for PAYG funding, dynamization, and status maintenance through public pensions, which constitute the building blocks of what became the German one-pillar pension paradigm.Footnote 61

The ensuing struggles with liberal political forces were fierce. Economics minister Erhard and other conservative ordoliberals opposed the reform.Footnote 62 Erhard saw the plan as a violation of the principle of subsidiarity, which is at the core of both ordoliberalism and catholic social teachingFootnote 63 and lamented the “poison of dynamization.”Footnote 64 Organized business also opposed the dynamized PAYG approach, pointing, inter alia, to detrimental effects on inflation and capital markets.Footnote 65

The parliamentary debate about the fundamental arguments regarding PAYG versus prefunded alternatives revolved around the Mackenroth theorem, which states that social expenditure ought to be serviced with current national income.Footnote 66 Support for a PAYG system stemmed from the perceived failure of prefunded alternatives throughout recent history of wars and inflation. Under the impression of the great inflation of 1922/1923, the 1927 pension reform implemented more stringent regulations regarding investment (e.g., discouraging stocks) and lending activities of the funded German public-pension pillar.Footnote 67 During the Great Depression, the funded public pension got caught in the double bind of more people in need and ever-scarcer resources to an extent that some argue “the end of the Weimar Republic was triggered by a conflict over the financing of mass unemployment and the level of insurance benefits.”Footnote 68 The Nazi regime used capital accumulated in the public pension insurance institutions to fund its war machine.Footnote 69 As Kohli writes, “The German experience of financial instability and even collapse through the rapid succession of wars, depressions and inflations was a powerful motive for […] [the] clear break with the principles of accumulation of capital.”Footnote 70

Economically liberal members of Parliament such as Margot Kalinke still questioned the fundamental economic sensibility of Mackenroth’s theory by pointing to the compound interest that capital in a prefunded public-pension pillar may generate, which potentially translates into lower contribution rates in the future.Footnote 71 These political fault lines were remarkably similar to those between pension-privatization advocates and antagonists during the 1990s, with many of the exchanges about the pros and cons of prefunded versus PAYG pensions seemingly interchangeable.Footnote 72 This debate has in fact been well-rehearsed in different permutations since the first comprehensive German social policy reforms in the late nineteenth century.Footnote 73

Despite politically powerful and intellectually sophisticated opposition by ordoliberals, the 1957 reform adhered to Bismarckian ideas. As Manow writes, “Minister of Economics, Ludwig Erhard, and his academic combatants Böhm, Rüstow, and Röpke among others were completely defeated in the battle against the reconstruction of the Bismarckian welfare state.”Footnote 74 As during the German Empire, liberal ideas suffered defeat again.Footnote 75 Voices fundamentally questioning the pension configuration were increasingly marginalized in what Babel refers to as a “silent revolution.”Footnote 76 Although the one-pillar approach meant that the public-pension pillar alone should suffice to maintain one’s standard of living throughout retirement, occupational pensions and private saving for old age naturally continued to play a role. Occupational pensions and private wealth more generally, however, became politically separated from what was considered the pension system, which stands in stark contrast with the three-pillar approach.Footnote 77

Ordoliberalism’s triumphant procession soon ebbed away, but its ideas have a lasting legacy,Footnote 78 including in German pension politics. Albeit as minority discourses, liberal policy ideas continued to be advocated and developed during the postwar decades. Even though employers’ genuine preferences might over time have actually become somewhat more favorable toward the one-pillar paradigm due to absorptive corporatist forces,Footnote 79 most liberal actors, including from the financial sector and many economists, continued to display pre-1957 preferences.

As the main political force behind a funded public-pension pillar and multipillarization, the economically liberal Free Democratic Party (FDP) is a case in point. The party’s 1952 platform set forth the goal of gradually reintroducing a relatively small-scale, funded first pillar in the name of individual responsibility. They maintained this position during the 1957 debate and reinforced it in 1963 with a proposal for a tax-funded base pension. Thereafter the FDP successively restricted itself to demands of fostering supplementary private savings for old age while continuing to favor more radical neoliberal pension ideas.Footnote 80 Whereas liberal actors moderated the framing of their positions in light of the dominant pension discourse, one must not mistake altered strategic preferences for changed genuine preferences.Footnote 81

Taken together, this historical overview sheds doubt on the novelty character of pension multipillarization policy ideas during the 1980s and 1990s. Prominent local actors had already conceived the ideas underlying pension privatization arguments in the 1950s. As these actors did not fundamentally change their preferences throughout the 1960s and 1970s, one would be hard-pressed to make the case for a substantive influence by exogenous pension ideas for that period. (Ordo)liberal pension ideas lingered as minority discourses in certain pockets of the polity.Footnote 82 This is not to claim that foreign models did not matter in political pension conflicts, but this necessarily cursory view casts doubt on substantive exogenous idea generation in the German case. Instead, foreign examples seemed to play, if at all, the symbolic role of justifiers of previously formed preferences.

Transnational Actors and Foreign Examples in German Pension Debates of the 1990s

To gauge the influence of foreign ideas and actors on German pension debates during the 1990s, let us first consider the World Bank’s Averting the Old Age Crisis. Footnote 83 The publication is widely credited as a primary catalyst of global ideas of pension privatization. When talking to German elite decision makers at the time, however, one learns that few are aware of its existence, let alone have read it. This suggests that “it was rather something for the academic community.”Footnote 84 Even in an instance when a bureaucrat at the Ministry of Labor and Social Affairs mentions the publication, she merely makes a vague reference to it in the context of current international debates and instead discusses a proposal by Kurt Biedenkopf at length (see below for more information on Kurt Biedenkopf).Footnote 85 When asked about the World Bank’s influence on German pension debates during the 1990s, former World Bank analyst and current head of social policy at the OECD Monika Queisser contends, “Nothing, that has nothing to do with Germany. The World Bank and IMF’s advice on pensions has little impact in Germany. That was an American vision. […] It was said that Bismarck systems are doomed to fail. That went down very poorly with Germans.”Footnote 86

Even among local proponents of multipillarization, one is hard-pressed to identify actors whose policy preferences aligned with the World Bank proposal. Organized business and other liberal political forces—even advocates of a systemic shift like Kurt Biedenkopf—opposed any mandatory prefunded elements, which were at the core of the World Bank model.Footnote 87 In addition, those who favored government-mandated occupational pension schemes (e.g., CDU politician Andreas Storm and Social Democratic Party Social and Labor Affairs Minister Walter Riester) were hardly susceptible to the World Bank’s focus on capital market development.

Even if the World Bank did not find any local champions, its policy ideas and the three-pillar metaphor might still have affected local discourse in subtler ways. After all, occurrences of the three-pillar terminology markedly increased in Germany after 1994.Footnote 88 A causal link between the 1994 World Bank publication and this increase, however, can hardly be established. The publication coincided with an intensified public pension debate in 1995, which meant an increase in occurrences of pension-related nomenclature across the board, as a cursory Google Ngram Viewer search substantiates. In addition, the three-pillar terminology had long been around and there are no indications of policy makers or journalists picking this up from the World Bank. Insurers and other liberals have been frequently evoking the three-pillar metaphor since at least the 1960s.Footnote 89 Contrary to claims that this framing and line of thinking was only imported from Swiss insurers beginning in the late 1970s,Footnote 90 German proponents of pension privatization had long conceived these policy ideas.Footnote 91 Even the government referred to the “three pillars of old age provision” as early as 1968, citing the “close functional links between public and private benefits.”Footnote 92 Note that despite its origin in the 1960s, in the German context up until the 1990s “the three-pillar metaphor remained a rhetorical formula without institutional consequences.”Footnote 93

Even financial lobbyists with a marked preference for more capital-market-oriented pension systems are not aware of the World Bank publication.Footnote 94 The one immediate personal link to the World Bank is Caio Koch-Weser, who as vice president at the World Bank joined the German Ministry of Finance as state secretary in 1999.Footnote 95 Hiring Koch-Weser, however, had nothing to do with his expertise in pension policy making and he did not bring multipillarization ideas “from Washington DC to Berlin.”Footnote 96

Besides the World Bank, it is especially the OECD that is said to have shaped the spread of pension privatization ideas. Just like the World Bank, the OECD has no regulatory or financial power in the German context and needs to rely on powers of persuasion. During the 1990s, the OECD broadened its portfolio from strictly economic issues to social policy making.Footnote 97 Analyzing, inter alia, German pension parliamentary debates during the 1990s, Zohlnhöfer and Zutavern find “little evidence that OECD proposals directly impacted German social policy. […] The OECD is certainly not seen as an infallible point of reference for the defense or attack of German social policy reforms.”Footnote 98 In a similar vein, Monika Queisser posits, “One seeks support from the OECD, if it fits. On pensions, we’re much less prescriptive than people tend to believe. Smaller countries listen to the OECD much more and ask for country-specific studies, but less so in Germany.”Footnote 99 Taken together, policy ideas by the World Bank and the OECD not only did not seem to have shaped German pension preferences or ideas; they were not even used as potentially legitimizing frames of reference in political discourse.

German policy makers also did not seem to draw meaningful conceptual inspiration from other countries’ experiences. As Lamping and Rüb assert, “reforms in other countries played, if at all, only an extremely marginal role.”Footnote 100 Chile, the widely studied lodestar for pension privatization reforms, virtually did not feature in German pension debates. Merely the neoliberal think tank Kronenberger Kreis invited José Piñera, the mastermind behind the Chilean pension privatization reform, to share his experience with a German audience.Footnote 101 This singular contribution, however, does not contain any concrete policy prescriptions for the German context, and in the foreword to Piñera’s essay it even says, “Naturally it is not up for debate to simply transfer another country’s system to Germany. The objective is rather to gain a new perspective for ourselves, and thus a new starting position and assurance, by looking at others.”Footnote 102 Thus, even the most radically neoliberal proponents of German pension system change were aware of the limitations of foreign models as policy templates.

Pension policy practitioners have unanimously confirmed this notion during interviews. “Pension pope” Bert Rürup, for example, submits when asked about the importance of foreign models, “Those were points of reference. […] But our system has historically grown over 130 years and is extremely juridified. It’s a patchwork system. […] If we were on a green field, we would do it. But we’re not. […] We’re not in Kazakhstan.”Footnote 103 An occupational pension lobbyist similarly observes, “One was looking for suggestions only to realize that every system is different due to their distinct philosophies. Therefore, you can’t copy anything.”Footnote 104 In this vein an insurance lobbyist contends, “Obviously one can always learn by looking at other countries’ pension systems. But you always get to a point where you realize that the systems are more complex than assumed and that different institutional arrangements are only designed the way they are because elsewhere they look like this and like that. Therefore, a simple import doesn’t cut it.”Footnote 105 Instead of a substantive import of ideas, he critically alludes to the role of foreign models as framing devices: “That game is always being played. […] I refer to this as institutional cherry picking: one looks at a complex model, picks whatever corresponds to one’s position and uses it for the debate.”Footnote 106 Realistically, technical aspects were imported at the ministerial-bureaucratic level—for example, solutions to keep administrative costs for private pension accounts lowFootnote 107 or, more recently, how to manage information on the total compensation levels across all three pension pillars.Footnote 108 Further to the ex post usage of foreign points of reference in everyday politics, former FDP politician Birgit Homburger states, “The World Bank publication rather falls into this category: if you need somebody to confirm your opinion, such institutions are welcome. At times research assistants are assigned to figure out whether somebody has written something that fits.”Footnote 109

Foreign Ideas and German Pension Policy Bricoleurs during the 1980s and 1990s

Even if foreign ideas did not substantively shape broader German pension debates, they might have had an influence on pioneering policy entrepreneurs. During the 1980s, Kurt Biedenkopf revived ordoliberal three-pillar pension ideasFootnote 110 and former Telecommunications Minister Christian Schwarz-Schilling transferred liberal arguments praising prefunded pensions from the academic to the political debate.Footnote 111 During the 1990s, CDU policy maker Andreas Storm conceived of the “demographic component” as a critical tool to accommodate population ageingFootnote 112 and longtime union leader and former labor minister Walter Riester applied ideas of employee participation in productive capital to the context of pensions.Footnote 113 Such policy pioneers should be particularly susceptible to exogenous ideas, for they tend to be experts who are most likely to look abroad for input.

Kurt Biedenkopf

When asked whether foreign ideas played a role during the conception of their pension model, CDU politician Kurt Biedenkopf recalls, “No. We were interested in that. But, for example, Scandinavian countries differ from Germany in terms of their size. […] We looked at that, obviously anything that was available, not just in Europe, but in the end we came to an independent conception.”Footnote 114 Stefanie Wahl, research assistant and coauthor of Biedenkopf’s collaborator Meinhard Miegel, recollects, “Basic pensions in the UK and the Swiss model served as suggestions. Crucial, however, was the development of long-term demographic, economic and societal trends as well as domestic ordo, economic, financial and social political problems of the prevalent system. […] In my view foreign models didn’t play a prominent role in the pension reform debates of the 1980s and 1990s. They were rather points of references to justify one’s reflections.”Footnote 115 Even though the first publication developing Biedenkopf’s pension plan surveys other countries’ experiences at some length,Footnote 116 the plan itself does not substantively draw on these. In fact, the most similar template the book cites is a reform proposal by German insurance economists from 1956Footnote 117 and the political role model is clearly Ludwig Erhard.Footnote 118

Christian Schwarz-Schilling

Telecommunications Minister Christian Schwarz-Schilling brought academic voices in favor of prefunded pensions to bear on the political discourse.Footnote 119 These academic debates, however, occurred largely decoupled from academic debates abroad. In fact, even main proponents of more prefunded pensions were skeptical of Feldstein’s famous thesesFootnote 120 about their effect on savings behavior and economic growth.Footnote 121 And those in agreement with Feldstein—for example, (life)insurers—had advanced such arguments already prior to 1974. This is not to claim that German pension economists were sealed off from international academic debates, as, for example, methodological advancements such as cohort-specific accounting were clearly imported from the US.Footnote 122

Schwarz-Schilling himself recalls, “I can’t say that any foreign model pointed the way for me.”Footnote 123 Based on his political day-to-day experience, foreign models were more likely to be used as justifications rather than idea generators anyway. His policy innovation draws on domestic academic and political debates while not displaying a discernible trace of substantive exogenous ideational influence.

Andreas Storm

Andreas Storm presented his pension policy blueprint at the 1996 CDU party convention. It contained the so-called demographic component. The component basically meant that the pension formula was adjusted in a way that accounts for increasing life expectancy, gradually decreasing the net standard pension level. It constituted the core piece of the 1997 Pension Reform Act. Storm developed the idea and originated the label “demographic component” for which the Federation of German Pension Insurance Institutes did the calculations.Footnote 124 Labor Minister Norbert Blüm later commissioned the economist and government consultant Bert Rürup to work out the formula’s technical details.

Storm’s conception of the demographic component came about most endogenously. When he realized that contribution rates were going to increase tremendously despite the 1989 reform, he started doing the math: “It was very autodidactic. I’m an econometrician and used to thinking in terms of models.”Footnote 125 One may still be led to consider the idea for the demographic component to have originated in Sweden, for a similar approach had begun to be discussed there.Footnote 126 And Storm indeed borrowed the term “demographic component” from the Swedish reform proposals under discussion at the time.Footnote 127 We appear to observe substantive exogenous ideational influence. If we probe a little more deeply, however, we find that this borrowing of a label had little to do with substantive ideational inspiration, for Storm recalls reading an article in the local newspaper Darmstädter Echo mentioning the label shortly prior to publishing his plan and only then including it.Footnote 128 “Demographic component” thus became the label and Sweden a point of reference after the substantive policy idea had been conceived: “I only read about it when I had already developed my model. Also, what was implemented in Sweden differs considerably from my model. For example, there it only pertained to new pensioners, whereas mine affected existing pensioners as well. But I liked the term.”Footnote 129 Given the temporal parallelism and even a direct link between the policy debates in Sweden and Germany, one may be easily misled to interpret this as diffusion or substantive exogenous ideational influence, but the only feature that actually traveled was a label through a local newspaper.

Developing the second main element of his pension policy proposal, a capital stock in the public-pension pillar, Storm was crucially influenced by the writings of Winfried Schmähl, the longtime chairman of the German Social Advisory Council and widely considered to be the primary academic defender of the one-pillar approach. Majoring in Sozialpolitik between 1983 and 1988, Storm read essays by Schmähl on prefunding in the first pension pillar and wrote a term paper on the subject.Footnote 130

Walter Riester

A longtime union leader, Walter Riester developed his policy proposal of Tariffonds (collectivized deferred compensation) based on the long-standing debate about employee participation in productive capital in the policy field of Vermögenspolitik. Footnote 131 Whereas parts of organized labor and the Social Democratic Party had been advocating collective stock sharing in the form of Tariffonds since the 1960s, the powerful IG Metall labor union had been an adamant opponent of such ideas.Footnote 132 As its deputy leader, Riester was the first prominent voice within the IG Metall to demand Tariffonds, stirring up internal controversy.Footnote 133 In the mid-1990s, Riester began to link ideas of employee capital participation to the old-age context and requisite cuts to public pensions: two issue spheres that had long been remarkably separate.Footnote 134 It was due to these progressive pension policy ideas that Gerhard Schröder asked Riester to be his shadow labor minister, to which Riester agreed under the condition that he would be allowed to implement his pension policies.Footnote 135

This genesis of Riester’s personal idea formation from within the policy field of Vermögenspolitik already casts doubt on substantive exogenous ideational influence. When asked about the importance of foreign models, Riester recalls an autodidactic approach: “I came up with it myself. One needs to grasp and rethink systems and their effects; only then you can come up with that. […] When I look at those [prefunded] systems, I need to consider them and their effects holistically. I’ve always considered comparisons to other countries as too simplistic.”Footnote 136 Further substantiating this, Lamping Rüb wrote, “Riester in his autobiography recounts an anecdote about his stay in the USA. Invited by the I[M]F and the World Bank, he proudly reported about the reforms of the new government, including the pension reform, without making any reference to the ideas of the World Bank.”Footnote 137 Beyond not importing ideas, Riester generally considered foreign examples of prefunded pensions as flawed, given their taxation structure, which is why they “never were templates for me.”Footnote 138 An autodidactic maverick among unionists, Riester was a bricoleur who transferred ideas and concepts from one policy field to another.

Taken together, this survey of four primary pension bricoleurs has not uncovered any evidence of substantive exogenous ideational influence and instead has shown that these pioneers largely developed their ideas based on local schools of thought as well as academic and political debates.

Conclusion

This article has revisited the question of the origin of the policy ideas shaping change in German pension politics. The analysis has shown that exogenous policy ideas did not have a substantive influence on German pension politics. German pension pioneers developed their ideas predominantly through bricolage by recombining long-standing local policy ideas in novel ways. As King and Smith submit, “new political ideas are rarely wholly new. They must be grasped as efforts to craft—out of intertwined medleys of older political conceptions—reformulations of policy content and purposes that resonate with ingrained senses of identities and interests.”Footnote 139 Although references to foreign pension models featured prominently in German debates, they did so as symbolical framing devices rather than substantive templates for policy ideas and preferences.Footnote 140 If in the transfer and translation literatures foreign ideas constitute “a bespoke outfit made from a dynamic fabric that absorbs local color,”Footnote 141 the case at hand can perhaps best be described through the lens of bricolage as local cloth with international coloring.

This has important implications for our understanding of the widely studied case of the German pension paradigm shift and the welfare state literature more broadly. Historical and ideational institutional scholarship has made tremendous strides in analyzing the rearranging, recombining, and reinterpreting of ideas and institutions through a variety of mechanisms and types of marginal change.Footnote 142 Overall, the literature has moved toward messier, more political conceptions of change that emphasize agency in the contested process of political importing and exporting. Bricolage perspectives, in particular, seek to “incorporate the complexities of institutional mediation, and the sedimented but ongoing influence of multiple […] ideas from different paradigmatic homes.”Footnote 143 This article has pursued an empirical strategy of combining a broad historical perspective with discourse analysis and case studies of individual policy makers, which underscores the importance of historicized analyses when making sense of current developments in welfare states.Footnote 144 Such a triangulation is particularly important when tracing the origins of policy ideas,Footnote 145 which are too often assumed rather than empirically verified.

Acknowledgments

I would like to thank Cornel Ban, Martin B. Carstensen, Kattalina Berriochoa, Jane Gingrich, Ronen Mandelkern, and David Rueda for their insightful comments.

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