The constrained left and its adverse impact on losers of globalization

This paper examines the political mechanisms of welfare state policymaking in two countries with differing levels of institutional and political constraints, Germany and Ireland. The study analyzes the joint impact of political constraints and varying party governments on different dimensions of labor market policymaking. It comes to the conclusion that left-wing governments must cut spending more to accommodate the conservative opposition and gain its support when political and institutional constraints are high. To simultaneously ensure the support from pivotal extra-parliamentary actors, namely labor unions that are closely linked to the governing party, the left has to further compensate the unions’ prime constituency, which is the well-integrated core workforce. The privileged treatment of labor market ‘insiders’ by left-wing governments in countries with high political constraints comes at the expenses of labor market ‘outsiders’. Left-wing party governments in countries where political constraints are low are better able to address the needs of broader segments of society.