Rethinking Path Dependency: The Crooked Path of Institutional Change in Post-War Germany

At the end of the Second World War, American occupying forces denounced the German tradition of cartelization and its contribution to the building up of Nazi power. While Germany was far from being the only European country with a tradition of cartelization, it was probably the country where the systematic organization of markets had gone furthest by the mid-1940s. Fifty years later, cartels have been all but formally outlawed from the German economy through, in particular, the double effect of a national anti-cartel act and of European competition law. At first sight, this suggests that, over a period of fifty years or so, the German regime governing competition has been radically reoriented. It has moved away from a deep mistrust of market competition (defined here as opposed to any form of collusion between competitors) and a marked preference for systematic inter-firm cooperation towards an overall endorsement of the liberal competition principle and a negative perception of cartelization. [First paragraph]