Abstract

Since the 1990s, many welfare states have extended social expenditure and social rights in Long-term Care (LTC) policies for senior citizens. At the same time they have also strengthened market principles in LTC policies. There are substantial differences concerning the forms and strength of marketization between European welfare states, even between welfare states with similar characteristics. So far, empirical studies are rare that explain cross-national differences in LTC marketization.

This paper aims to explain differences in LTC policy marketization between two conservative welfare states, Germany and Austria. Both have experienced a paradigmatic policy change in LTC policies in the 1990s, which combined the extension of publicly paid social services and new social rights with a strengthening of market principles. However, the LTC policy marketization was clearly more far-reaching in the Austrian welfare state compared with the German welfare state.

We use the ‘welfare arrangement’ approach by Birgit Pfau-Effinger (2005) for an explanatory framework. It emphasizes the role of cultural change and socio-economic change and of the development of power relations and actors constellations in the context of historical development paths for the explanation of cross-national differences regarding welfare state reforms. The empirical study is based on the analysis of the different development paths, in which the policy reforms were embedded, and the causal relations and processes on which they were based. It uses methods like public statistics, document analysis, and secondary analysis of qualitative empirical studies.

The findings show that the differences can mainly be explained with differences in the role of market elements in the previous care policies and in the main cultural ideas that were relevant in the policy process. The paper provides an innovative contribution to the international comparative theory and research about historical change in welfare state policies.