Kiel Working Papers, Kiel Institute for World Economics
No 1207:
Economic and Political Governance in Germany's Social Market Economy
Horst Siebert
Abstract: Germany’s system of economic and political governance
strongly relies on group decision-making and consensus to solve economic
issues. This approach relates to a wide spectrum of decisions, including
the social partners with the trade unions and the employers’ associations
in wage formation, the trade unions in the governance of firms through
codetermination and the workers’ councils in the operation of firms, but
also to relationship banking and to the steering of the university system
by codetermination and by a governmental planning approach. In addition, in
the governance of government and its federal structure, mechanisms of
consensus are an important feature, above all through the joint
responsibility of the Bundestag and the Bundesrat in law-making.
Distributive federalism is another expression of the consensus mechanism.
Looking at all these mechanisms, it is surprising how strongly the market
economy is restrained in Germany.
Keywords: Codetermination, governance, consensus, group decisionmaking, governance of the universities, governance of government, voting system, Bundesrat and law-making, distributive federalism; (follow links to similar papers)
JEL-Codes: D72,; G3,; H1,; H7,; J5; (follow links to similar papers)
57 pages, April 2004
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