The SPD’s reforms of the early 2000s show why liberalising labour markets can be electorally beneficial for centre-left parties.

Why do centre-left parties liberalise labour markets against the interests of their traditional worker constituencies? Using the case of the SPD in Germany, Patrick Lunz puts forward an explanation focused on a party’s electoral position. He notes that the alignment of the German party system ensured the SPD would face only weak competition from parties to their left, while long-term trends indicated that citizens were becoming more accepting of a reduction in the generosity of the German welfare state. While it might have appeared counter-intuitive, the social democratic government therefore liberalised labour markets to protect their long-term electoral interests.