The Grand Coalition and Pension and Health Care Reform

This article focuses on German pension and health care reform politics under the Grand Coalition. All rich democracies face functional pressures to reform these sectors but are confronted with political and sometimes also institutionalobstacles. This holds in particular for the German party system, where traditionally two large centre parties compete for votes and power is shared with the Bundesrat, and often – informally – with the social partners. We hypothesise that a formal grand coalition provides a promising configuration for radical reforms as it neutralises these obstacles. This is done by analysing in some depth the major reforms of the Grand Coalition, the rise in the legal retirement age to 67 and the 2007 health care reform, and by comparing them with the main reforms of the preceding government, in particular the Red–Green coalition. We find that, although a Grand Coalition is not necessary for paradigmatic reform, it makes significant reform more likely, be it paradigmatic in the levels-of-policychange literature or electorally costly as conceived in the welfare state literature