Federalism and the Politics of Old-Age Care in Germany and the United States

Abstract

Until the early 1990s, Germany and the United States had similar systems of long-term care. At that time, Germany created a new social insurance program, whereas American reform efforts stalled. As conventional explanations of social policies—rooted in objective conditions, policy legacies, interest group mobilization, and party politics—fail to explain the diverging trajectories, the authors show how differing federal structures shaped reform efforts. German federalism gives states a strong voice and encourages collective responses to fiscal problems, enabling comprehensive restructuring of long-term care financing. In the United States, states lack a political mechanism to compel federal policy makers to tackle this subject. This analysis suggests reform of social welfare issues with weakly mobilized publics is unlikely without proxy actors that have institutional or political means to forcibly gain the attention of policy makers. In addition, scholars should pay more attention to “varieties of federalism” in analyses of the welfare state.