Since the 1970s, the power resources model has been the dominant approach to comparative studies of welfare state development. The strength of labor unions and left-wing political parties has been used to explain cross-national variation in both the structure and substance of modern social policies. However, in recent years, a number of scholars have challenged this labor-centered perspective by questioning the notion that capitalists uniformly oppose social insurance or that passage of meaningful reforms can only occur when business interests are politically marginalized.

In her book, Isabela Mares makes a theoretically sophisticated and empirically rich contribution to the growing number of studies that explore the centrality of business interests in the comparative political economy of advanced industrialized countries. Spanning a century of social policy development, her look at the role of French and German employers challenges the view that welfare states emerge out of irreconcilable class conflict.

Mares begins by elaborating a theory of business preferences toward social policy. According to the author, social policies vary along two critical dimensions: the scope of coverage (the percentage of the population that has access to social benefits) and the distribution of administrative control (the role of unions, employers, and the state in policy implementation). Different kinds of social policies—universalistic programs, contributory social insurance, or firm-level benefits—present different mixes of risk redistribution and control.

The preferences of employers toward the degree of risk redistribution and administrative control are, in turn, a function of two principal characteristics: firm size and the relative incidence of labor market risks (such as unemployment, workplace accidents, etc.). Expressed as utility functions and indifference curves, these characteristics yield several predictions about the social policy preferences of firms. For example, large/high-risk firms will prefer contributory social insurance schemes that redistribute risks but still admit a role for employers in social policy administration. By contrast, small/high-risk firms will prefer universalistic social policies that redistribute risks but relieve employers from the complexity and cost of program administration. Meanwhile, large/low-risk firms will prefer private social policies administered at the firm level, and small/low-risk firms will generally oppose all social policies (p. 37).

With these predicted social policy preferences in hand, Mares tests the theory through an in-depth study of the role of employers in France and Germany over a century of welfare state development. Chapters on accident insurance, unemployment assistance, early-retirement schemes, and other social insurance reforms largely confirm her predictions about the preferences of employers toward various types of social policy. For example, in detailing the emergence of accident insurance in France and Germany during the late nineteenth century, Mares shows the considerable disagreement among employers in different industries over various policy proposals. Whereas large manufacturing firms favored giving employers discretion in the administration of social insurance, issues of control were less important for small firms concerned about the costs of new social programs. At the same time, employers in high-risk industries, such as iron and steel, supported a broad redistribution of risks, whereas employers in agriculture and other low-risk sectors opposed policies that redistributed risks (pp. 104–5).

However, employers' social policy preferences do not constitute evidence of business influence in welfare state development—a mistake Mares is careful not to make. Labor unions, political elites, institutional structures, and the long shadow of past policy choices all make appearances throughout the historical narrative. But adding such nuance to the account raises questions about the role employers actually played in social policy innovation. For instance, with capitalists often divided in their views, internecine conflicts might leave business leaders irrelevant in the social policy process. As the author explains, however, key policy innovations many times hinged on the formation of cross-class alliances between some sectors of the business community and trade union leaders. Political elites often figure prominently in her accounts of these cross-class alliances; yet the critical emergence of these “reformist policy entrepreneurs” (p. 109) is not accorded a great deal of theoretical attention in the analysis. In the case of unemployment insurance, for example, Mares notes that an important factor explaining its early introduction in France “was the broader political ascendancy of left-wing forces” (p. 117), but she does not explore the relationship between partisan context and political opportunity more generally. In fact, one is tempted to combine her considerable insights with the power resources model the book aims to dismantle: Left-labor power is a necessary but far-from-sufficient condition for social policy innovation, as the content of social legislation often depends on the role of employers and the sector-specific preferences of various firms. In sum, by clarifying employer preferences toward social policy alternatives, she in fact muddies the role of business in explaining social policy outcomes.

Nevertheless, the book is at its best when Mares recounts these twists and turns of social policy innovation. She marshals an impressive array of primary sources throughout this well-written narrative. The combination of detailed archival work and rigorous analysis results in a book that makes an important contribution to the study of comparative political economy. More broadly, the successful use of multiple approaches in The Politics of Social Risk offers a model of scholarship others will no doubt seek to emulate in the future.