Die Misere des deutschen Verbändestaates

• Published in: Jahrbuch für Wirtschaftswissenschaften / Review of Economics Vol. 54; no. 2; pp. 178 - 186
• Main Author: Streit, Manfred E.
• Format: Journal Article
• Language: German
• Published: Vandenhoeck & Ruprecht 01.01.2003
• ISSN: 0948-5139; 2366-035X

The paper refers to the present public discussion of reforms of the German so-called social state which obviously has become too expensive and tends to produce unemployment due to weak economic growth. The many voiced protests against reform proposals by functionaries of special interest groups reveal, it will be argued (part 1) an omnipresence of „distributional coalitions” (Olson), which are even institutionally integrated in the political decision processes. Their rent-seeking has induced rent-creation by the political class, leading to an „institutional sclerosis” (Olson) as a major source of the weak performance of the economic system. Rent-seeking and rent-creation reflect a process of political decision-making which has been criticised to represent a „horse-trading democracy” (Hayek). The decisive role of the lobby in this process seems to have transformed the democratic rule of law into a self-damaging rule of lobby. Reform of that system means that the rents resulting from the political process in the past have now to be collected by the political class. This provokes resistance and protest by the lobby exclaimed in the name of „social justice” which previously served well to justify the rents which are now objects of reform. The political strategy to resolve the blockage of reforms is to enter into negotiations with those who oppose reforms. Such „consensual politics”, it will be argued (part 3) have little chance of success. This can be explained by drawing on results obtained by game theory. Nevertheless, members of the political class rarely deplore the damaging role of the lobby. This will be explained by the personal and the financial entanglement of the political class and the lobby for which casual evidence will be provided (part 4). It implies a self-tying of hands by the political class with paralysing consequences. Remedial action (part 5) should stop the process of rent-creation and rent-seeking and it should dissolve the entanglement of the political class and the lobby. Both kinds of action raise questions of reform of the political constitution. Its chances of success seem to be prety slim. This is why the paper ends with reasoned scepticism.