IDEAS home Printed from https://ideas.repec.org/p/eiq/eileqs/42.html
   My bibliography  Save this paper

The paradox of liberalization – Understanding dualism and the recovery of the German political economy

Author

Listed:
  • Anke Hassel

Abstract

What do the recent trends in German economic development convey about the trajectory of change? Has liberalization prepared the German economy to deal with new challenges? What effects will liberalization have on the coordinating capacities of economic institutions? This paper argues that coordination and liberalization are two sides of the same coin in the process of corporate restructuring in the face of economic shocks. Firms seek labour cooperation in the face of tighter competitive pressures and exploit institutional advantages of coordination. However, tighter cooperation with core workers sharpened insider-outsider divisions and were built upon service sector cost cutting through liberalization. The combination of plant-level restructuring and social policy change forms a trajectory of institutional adjustment of forming complementary economic segments which work under different rules. The process is driven by producer coalitions of export-oriented firms and core workers’ representatives rather than by firms per se.

Suggested Citation

  • Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," LEQS – LSE 'Europe in Question' Discussion Paper Series 42, European Institute, LSE.
    • Handle: RePEc:eiq:eileqs:42
    as

    Download full text from publisher

    File URL: http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper42.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anke Hassel, 2007. "The Curse of Institutional Security - The Erosion of German Trade Unionism," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 14(2), pages 176-191.
    2. Culpepper,Pepper D., 2011. "Quiet Politics and Business Power," Cambridge Books, Cambridge University Press, number 9780521118590, September.
    3. Eichhorst, Werner & Marx, Paul, 2009. "Reforming German Labor Market Institutions: A Dual Path to Flexibility," IZA Discussion Papers 4100, Institute of Labor Economics (IZA).
    4. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    5. Herwig Immervoll, 2007. "Minimum Wages, Minimum Labour Costs and the Tax Treatment of Low-Wage Employment," OECD Social, Employment and Migration Working Papers 46, OECD Publishing.
    6. Herrigel, Gary, 2010. "Manufacturing Possibilities: Creative Action and Industrial Recomposition in the United States, Germany, and Japan," OUP Catalogue, Oxford University Press, number 9780199557738.
    7. Streeck, Wolfgang, 2010. "Re-Forming Capitalism: Institutional Change in the German Political Economy," OUP Catalogue, Oxford University Press, number 9780199573981.
    8. Eichhorst, Werner & Marx, Paul, 2010. "Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States," IZA Discussion Papers 5035, Institute of Labor Economics (IZA).
    9. Hans‐Werner Sinn, 2006. "The Pathological Export Boom and the Bazaar Effect: How to Solve the German Puzzle," The World Economy, Wiley Blackwell, vol. 29(9), pages 1157-1175, September.
    10. Streeck, Wolfgang, 2010. "E pluribus unum? Varieties and commonalities of capitalism," MPIfG Discussion Paper 10/12, Max Planck Institute for the Study of Societies.
    11. Culpepper,Pepper D., 2011. "Quiet Politics and Business Power," Cambridge Books, Cambridge University Press, number 9780521134132, September.
    12. ,, 2009. "Economics of Monetary Union," OUP Catalogue, Oxford University Press, edition 8, number 9780199563234.
    13. Hassel, Anke & Rehder, Britta, 2001. "Institutional change in the German wage bargaining system: The role of big companies," MPIfG Working Paper 01/9, Max Planck Institute for the Study of Societies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laura Chies, 2013. "Riforme del mercato del lavoro e distribuzione del reddito in Germania," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 42-64.
    2. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 6, London School of Economics / European Institute.
    3. Storm, Servaas & Naastepad, C.W.M., 2015. "Crisis and recovery in the German economy: The real lessons," Structural Change and Economic Dynamics, Elsevier, vol. 32(C), pages 11-24.
    4. Olivier Giraud & Arnaud Lechevalier, 2018. "The grey zone and labour market dynamics in Germany," Transfer: European Review of Labour and Research, , vol. 24(3), pages 317-336, August.
    5. Werner Eichhorst, 2015. "The Unexpected Appearance of a New German Model," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 49-69, March.
    6. Gary Herrigel, 2015. "Globalization and the German industrial production model [Globalisierung und das deutsche Modell der Industrieproduktion]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(2), pages 133-149, August.
    7. Servaas Storm & C.W.M. Naastepad, 2015. "Crisis and Recovery in the German Economy: The Real Lessons," Working Papers Series 10, Institute for New Economic Thinking.
    8. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 76, European Institute, LSE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hassel, Anke, 2011. "The paradox of liberalization – understanding dualism and the recovery of the German political economy," LSE Research Online Documents on Economics 53212, London School of Economics and Political Science, LSE Library.
    2. Anke Hassel, 2014. "The Paradox of Liberalization — Understanding Dualism and the Recovery of the German Political Economy," British Journal of Industrial Relations, London School of Economics, vol. 52(1), pages 57-81, March.
    3. Darcillon, Thibault, 2015. "Corporate governance reforms and political partisanship: an empirical analysis in 16 OECD countries," Business and Politics, Cambridge University Press, vol. 17(4), pages 661-696, December.
    4. Abdelal Rawi, 2015. "The multinational firm and geopolitics: Europe, Russian energy, and power," Business and Politics, De Gruyter, vol. 17(3), pages 553-576, October.
    5. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 2, London School of Economics / European Institute.
    6. Werner Eichhorst, 2015. "The Unexpected Appearance of a New German Model," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 49-69, March.
    7. Lisa Kastner, 2017. "Tracing policy influence of diffuse interests: The post-crisis consumer finance protection politics in the US," SciencePo Working papers Main hal-02186320, HAL.
    8. Francesca Colli & Johan Adriaensen, 2020. "Lobbying the state or the market? A framework to study civil society organizations’ strategic behavior," Regulation & Governance, John Wiley & Sons, vol. 14(3), pages 501-513, July.
    9. Scott James, 2016. "The domestic politics of financial regulation: Informal ratification games and the EU capital requirement negotiations," New Political Economy, Taylor & Francis Journals, vol. 21(2), pages 187-203, March.
    10. Frederik Stevens & Iskander De Bruycker, 2020. "Influence, affluence and media salience: Economic resources and lobbying influence in the European Union," European Union Politics, , vol. 21(4), pages 728-750, December.
    11. Fairfield Tasha, 2015. "Structural power in comparative political economy: perspectives from policy formulation in Latin America," Business and Politics, De Gruyter, vol. 17(3), pages 411-441, October.
    12. Nils Redeker & Stefanie Walter, 2020. "We’d rather pay than change the politics of German non-adjustment in the Eurozone crisis," The Review of International Organizations, Springer, vol. 15(3), pages 573-599, July.
    13. Lisa Kastner, 2016. "The Power of Weak Interests in Financial Reforms," SciencePo Working papers Main hal-02187883, HAL.
    14. Lisa Kastner, 2017. "Tracing policy influence of diffuse interests: The post-crisis consumer finance protection politics in the US," Post-Print hal-02186320, HAL.
    15. Neimanns, Erik & Blossey, Nils, 2022. "From media-party linkages to ownership concentration causes of cross-national variation in media outlets' economic positioning," MPIfG Discussion Paper 22/8, Max Planck Institute for the Study of Societies.
    16. Cornelia Woll, 2013. "Lobbying under Pressure: The Effect of Salience on European Union Hedge Fund Regulation," Post-Print hal-02186537, HAL.
    17. Kinderman, Daniel, 2014. "Challenging varieties of capitalism's account of business interests: The new social market initiative and German employers' quest for liberalization, 2000-2014," MPIfG Discussion Paper 14/16, Max Planck Institute for the Study of Societies.
    18. Pritish Behuria, 2019. "The comparative political economy of plastic bag bans in East Africa: why implementation has varied in Rwanda, Kenya and Uganda," Global Development Institute Working Paper Series 372019, GDI, The University of Manchester.
    19. Lisa Kastner, 2014. "‘Much ado about nothing?’ Transnational civil society, consumer protection and financial regulatory reform," Post-Print hal-02186500, HAL.
    20. Leszczyński Dariusz, 2015. "Emerging Varieties of Capitalism in Transition Countries: Literature Review," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 48(1), pages 101-124, December.

    More about this item

    Keywords

    Varieties of Capitalism; institutional change; labour market; industrial relations;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eiq:eileqs:42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Katjana Gattermann (email available below). General contact details of provider: https://edirc.repec.org/data/eilseuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.