German Social Market Economy Research Articles

PUBLIC ENTERPRISES AND SERVICE PROVIDERS IN INSTITUTIONAL COMPETITION AND UNDERGOING STRUCTURAL CHANGE New challenges to the theory of public economics and public services in Germany

ABSTRACT**: In recent years the public sector has undergone structural changes: privatization, competition, compulsory competitive tendering, award of public service provision to private bidders, state as guarantor of public service provision. It must be asked, whether these changes are causing the dualistic structure of the specific German Social Market Economy to move in the direction of a more uniform typically private economy. One must ask also, which are the impacts of these changes on the German Theory of Public and Social Economy. This is characterized by the dualism of public and private economy. In this contribution the German system of Social Market Economy and the German Theory of Public Enterprises will be analyzed for this purpose. It results from the analysis that there will be in future a more or less intensive institutional competition on public services between public, public‐private, task regulated private enterprises, cooperatives, and social organisations. Therefore the German Theory of Public Enterprises must be newly defined, adapted and developed to a new Theory of Public Services in a competitive environment.

Towards a More Market Based Approach: The Institutional Framework for Quality Assurance in Germany

Like in most industrialized countries, Germany's health care system is facing two major challenges. The first is to find a sustainable financing system for the increasing health care expenditure. The second is to ensure - and improve - the quality of care provided.This paper describes the status quo in quality assurance in Germany and analyses the changes introduced into the SHI (Statutory Health Insurance) system with the Modernization Act of 2004. This paper first outlines a theoretical framework for quality assurance consistent with the logic of the German Social Market Economy. The analysis then describes new actors and their duties in the field of quality assurance, also showing improvements in the area of regulations and instruments applied. Although the strategy for quality assurance is still dominated by regulation and corporatist bodies, the latest reform acts of 2004 and 2007 focus on more and better information about quality provided - an important prerequisite for more competitive elements in the German health care system.

Germany’s Stalling Economic Engine – How to Get it Running Again

The German economy, once the powerhouse in Europe, is stalling. Unemployment has ratcheted upward since 1970, the social security systems can no longer be financed (even if the population were not ageing) and with an average annual GDP growth rate of 1.2 per cent since 1995, the economy almost stagnates. This paper analyses and suggests solutions to Germany’s three main challenges. To undo the adverse incentives with respect to unemployment, the institutional design for wage formation should be decentralized, the reservation wage adjusted and the tax on labour reduced. To make the social security systems sustainable, the level of social absorption has to be lowered. And, finally, to achieve a more dynamic economy, new stimuli for growth have to be unleashed, including human capital formation and innovation, which are vital for the knowledge society. The role of government has to be rethought and the German social market economy redefined.

'Social Market Economy' as Europe's Social Model?

continues to search for its - - model and the, search seems to become increasingly urgent. It is no longer just the democratic deficit, but also and alongside it, the social deficit of the EU which needs to be cured. That new concern is, in fact, a rejection of the older answers. According to the ordo-liberal interpretation of the European legal order as an Economic Constitution and, successively, in the analyses of the EU as a Regulatory State, the sphere of policy was to remain a domain of the nation state. This seems to have become impossible. Constitutional Treaty, indeed, makes a new commitment: The Union shall work for a Market Economy. This paper submits that this commitment is conceptually a failure, and politically not credible. Convention preparing the Constitutional Treaty has apparently ignored the meaning of the concept in the form in which it was shaped in Germany's post-war period. This history entails some pitfalls for the Convention's intentions, as the German Social Market Economy involved not only a claim of integrating concerns into the market economy, but also served to restrict claims for instruments of policy remarkably at the same time. Moreover, the Convention has failed to confer a new and independent content to the concept of the Social Market Economy, which could help to overcome the concept's ambivalent history, as well as the Union's real social deficit. few innovations, the Charter's Fundamental Rights and the Open Method of Co-ordination, were incorporated in such modest and non-committal forms that their potential to further the case for social Europe seems marginal. paper concludes that the invocation of the Social Market Economy in the Constitutional Treaty is conceptually flawed and is politically an all too risky promise which may raise expectations which it will subsequently fail to deliver.

Reforms in the new German labour market: a case for institutional corporatism?

This paper summarises the institutional arrangements and prerequisites for a new social partnership, necessary for the successful completion of labour market reform in western Germany. It does this by drawing on key policies and proposals highlighted and explored in the papers of this special issue. The paper elaborates further on these issues by outlining the importance of the labour market and its institutions in the German social market economy before turning to the case for reform. The paper addresses both micro and macroeconomic themes, including international experiences of labour market reform, employment and social policies, insider‐outsider and institutionally determined unemployment, the German system of collective bargaining and the importance of tripartite corporatist agreements. The paper concludes that reform in the German labour market should proceed through rather than against the existing institutions of social partnership, possibly with a new role for government in strengthening incentives for both unions and employers to act in a socially responsible way.

Standort Deutschland in the globalising economy: An end to the economic miracle?

This article reviews the economic position of Germany in an era of increased internationalisation of economic activity. Since unification there have been worrying trends in the German economy: in particular, high unemployment, increasing government debt and a substantial increase in the overseas activities of Germany's major companies. However, this article argues that the micro‐economy in general, and the institutional structures inherent to the social market economy of post‐war Germany in particular, are strong. Indeed, only by understanding the historical interrelationships between the individual structures of the German social market economy is it possible to appreciate the continued strength of the German economy.

Atlantic capitalism versus Rhine capitalism in the European community

The advent of the Single European Market in 1993 has prompted a debate about the differences between the German social market economy and the British liberal market, and whether these can coexist. ‘Rhine Capitalism’ based on social solidarity will remain a source of competitive advantage through its emphasis on continuous development of labour skills and technology. Britain's ‘Atlantic Capitalism’ lacks such a framework for dialogue between government and producer interests, which will make the creation of a national competitiveness strategy to counter deindustrialisation problematic. At the European Community level, some regulatory framework similar to Germany's Ordnungspolitik will probably emerge to underpin the operation of the Single Market.

From Post-Communism to Civil Society: The Reemergence of History and the Decline of the Western Model

For virtually all the major schools of Western opinion, the collapse of the Communist regimes in Eastern Europe and in the Soviet Union, between 1989 and 1991, represents a triumph of Western values, ideas, and institutions. If, for triumphal conservatives, the events of late 1989 encompassed an endorsement of “democratic capitalism” that augured “the end of history,” for liberal and social democrats they could be understood as the repudiation by the peoples of the former Soviet bloc of Marxism-Leninism in all its varieties, and the reemergence of a humanist socialism that was free of Bolshevik deformation. The structure of political and economic institutions appropriate to the transition from post-Communism in the Soviet bloc to genuine civil society was, accordingly, modeled on Western exemplars—the example of Anglo-American democratic capitalism, of Swedish social democracy, or of the German social market economy— or on various modish Western academic conceptions, long abandoned in the Soviet and post-Soviet worlds, such as market socialism. No prominent school of thought in the West doubted that the dissolution of Communist power was part of a process of Westernization in which contemporary Western ideas and institutions could and would successfully be exported to the former Communist societies. None questioned the idea that, somewhere in the repertoire of Western theory and practice, there was a model for conducting the transition from the bankrupt institutions of socialist central planning, incorporated into the structure of a totalitarian state, to market institutions and a liberal democratic state. Least of all did anyone question the desirability, or the possibility, of reconstituting economic and political institutions on Western models, in most parts of the former Soviet bloc.

State Intervention versus Private Initiative: New Challenges for the German Social Market Economy. Any Implications for Pakistan?

There is a never ending discussion, whether economies of different development levels and cultural and social backgrounds can be compared or not. The protagonists of the modernisation theory - and of many other development theories - believe, that development is a uni-dimensional process, where the late-comers have to follow the same path, which the more advanced already went. Their opponents believe that each economy and each society have their distinct features and have to fmd and follow their own development patterns. Germany was a late-comer in industrialisation and suffered serious setbacks later. Its "miracle" reconstruction after World War II has made it prosperous; its economic order may help in mastering the unprecedented challenges set by the Unification and integration of the former East German "Socialist": command economy. Our economic order, however, is not as "free market" oriented, as many believe. With the present shift to more market orientation in the former Second and the Third World, it, therefore, should be worthwhile, to have a closer look at the German "social market economy". This especially applies to Pakistan, with its long tradition of "mixed economy", "welfare state", "Islamic socialism" and "Islamic welfare state".

The Politics and Philosophy of Economics: Marxians, Keynesians and Austrians

Friedrich Engles and marxian political economy the market economy and the franchise, or 1867 and all that the philosophy and politics of the Cambridge school Keynes versus the Keynesians Walter Eucken and the German social-market economy Carl Menger on philosophy and method Austrians on philosophy and method (since Menger) the limitations of general theories in macroeconomics on the aims and methods of economic theorizing.