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Abstract

The French and German political economies have been significantly reconfigured over the past two decades. Although the changes have often been more piecemeal than revolutionary, their cumulative effects are profound. The chapter characterizes the changes that have taken place as involving a process of dualization, and argues that what gives contemporary developments a different character from the past is that they are now explicitly underwritten by state policy. It emphasizes complementarities across institutional realms, and show how these linkages have facilitated the spread of dualization – beginning in the field of industrial relations, moving into labor market dynamics, and finally finding institutional expression in welfare state reforms. The result in France and Germany has been the institutionalization, with state support, of an apparently stable but distinctly less egalitarian model.