The determinants of welfare state reform: external challenges Europeanization and Welfare State Change. The Case of Unemployment Protection in Italy and France Paolo Graziano Political Economics Lectures 9-10

1.1a. WS Change and Europeanization ‘Traditional’ focus of comparative WS literature: WS regimes (Esping Andersen, 1990) WS ‘new’ politics (Pierson, 2001) WS recalibration (Ferrera and Hemerijck, 2003) ‘New’ focus of Europeanization and WS Change literature: WS compliance (Falkner and others, 2005) OMC and National Employment and Social Inclusion (Zeitlin and Pochet, 2005) Europeanization of social protection (Kvist and Saari, 2007)

1.1b. Europeanization and WS change: where is the link? WS literature has been traditionally interested in the national dimension and has primarely focused on aggregate social expenditure data ‘Evocative’ use of Europeanization in recent WS literature Further need to set the link between Europeanization and WS (change)

1.2a. Conceptual Issues: Europeanization Europeanization per se is not convergence nor mere EU integration top-down and bottom-up process (i.e. construction and diffusion) process is different from its (direct and indirect) effects dimensions involved: policy, polity and politics widening the focus: Europeanization as a case of regionalization

1.2b. Conceptual Issues: WS change Non contested definition of WS (i.e. social policies such as employment, health care, pensions, social inclusion, etc.) WS change has often been studied in relation to social expenditure (see Esping Andersen, 1990 – and many others) More recently, WS change = overall policy change (possible ‘paradigmatic change’ à la Hall, 1993; Culpepper, Hall and Palier and others, 2006) WS policy key elements: policy goals, policy domains and policy instruments, i.e. policy structure (objectives, principles, procedures and financial instruments)

1.3. Research Design Linking Europeanization (i.e. construction at the EU level and national diffusion of EU policies and institutions) and national WS change (i.e. in the national actors’ strategy in building EU policies and/or policy structure modifications connected to Europe ) Three step research design: A. EU policy analysis B. National policy analysis (i.e., if applicable, description of dimensions of change) C. Change/Immobilism explanation (if change or policy misfit detected)

1.4. Methodology What: neoinstitutional process tracing (in particular, the historical variant of neoinstitutionalism: key feature is the timing and the sequencing of policy evolution) How: policy document analysis (policy structure), newspaper analysis and semi-directive interviews with key informants (policy process) using positional method Who: key actors involved in the decision-making process When: since memory is weak, the timing of the research is crucial…

2.1. Europeanization and Employment Policy Change in Italy and France Case selection: Italy and France considered as different welfare state models, in particular with respect to public coverage of employment protection (Esping Andersen, 1990; Ferrera, 1996) Basic research question: in the light of common external pressures, the result is policy convergence or differences still remain? A three step research design: A. EU policy evolution B. National policy evolution C. Policy change/immobilism explanation Methodology: neoinstitutional process tracing, through policy-making data collection (mainly communications, actions plans and recommendations) and about 20 interviews with key decision-makers at the EU and national level

2.2.a. The construction of EU policies Italy: weak capacity of preference formation, representation and negotiation in the EU France: strong capacity of preference formation, representation and (especially) negotiation in the EU Result: Italy = EU policy taker France = EU policy maker

2.2.b. EU policy structure (after EES) objectives: quantified employment targets principles: from four pillars (employability, entrepreneurship, equal opportunities, adaptability) to three overarching ones (full employment, quality and productivity, cohesion and an inclusive labour market) – i.e. flexibility first and flexicurity after 2007 procedures: OMC (benchmarking, best practice approach, etc.), i.e. standardized ‘soft law’ instruments: ESF (European Social Fund) In sum: soft but continuous pressures towards activation policies

2. 2. b. The diffusion of EU policies 2.2.b. The diffusion of EU policies. Italian ‘traditional’ policy structure (before EES) objectives: poorly defined principles: employment security procedures: discretionary instruments: national, predominance of passive measures, low overall unemployment expenditure (around 1% of GDP)

2. 2. c. The diffusion of EU policies 2.2.c. The diffusion of EU policies. French ‘traditional’ policy structure (before EES) objectives: poorly defined principles: employment security procedures: automatic instruments: national, predominance of passive measures, medium-high overall unemployment protection expenditure (3% of GDP)

2.2.d. The new Italian policy structure (after EES) objectives: well defined (EES definition) principles: flexicurity (Italian style, i.e. security for insiders, flexibility for former outsiders or newcomers) procedures: increasingly automatic (although with a limited scope since unemployment protection measures are still limited) instruments: both European and national, significant increase of active measures, limited overall increase unemployment protection expenditure

2.2.e. The new French policy structure (after 1997) objectives: well defined (EES definition) principles: employment security procedures: automatic instruments: both European and national, but still predominance of passive measures, constant overall unemployment protection expenditure

2.3. Explaining differential WS changes In sum: very limited convergence towards a common employment policy structure, but why? In search for an explanation: EU policy construction style the domestic politics of unemployment protection (i.e. partisan and trade union politics) nature of European constraints and opportunities (being weak, they were more relevant in the cases of greater ‘policy misfit’ and high budget deficits – i.e. Italian case)

2.4. Conclusion In both cases some changes have been registered… …but France and Italy remain clearly different welfare states (with respect to unemployment protection) European pressures (even if weak) make a difference, especially in those cases where there is a clear ‘policy misfit’… …but the pressures must be connected to the EU policy construction style and the domestic politics of unemployment protection which ‘use’ quite differently European constraints and opportunities. Predictions: no full Europeanization of all domestic welfare states but differential Europeanization (and, in a broader perspective, ‘regionalization’) of domestic policies – not only welfare state policies.