"Institutional interference in the European Union: The stability pact and the reform of public pensions in Germany"

This paper attempts to shed light on the controversy about the effect of EMU on welfare state reforms in Europe. So far, hypothesis testing through quantitative cross-national studies of welfare reform outcomes has been unable to separate out the effects of EMU, globalization, and socioeconomic changes. The arguments against the importance of one variable and for the primary of another factor ere mostly based on counterfactuals. This paper suggests that these problems exist mostly because our hypotheses are still insufficiently developed. It therefore focuses on hypothesis development instead of hypothesis testing. Through a cace study, it explores the causal mechanism termed "institutional interference" - by which European fiscal institutions impact on welfare states. It thus allows us to identify some of the factors that condition the effect of EMU, which is crucial for our ability to design more conclusive tests of hypotheses in cross-national comparisons