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1. Government of the People, by the Elite, for the Rich Unequal Responsiveness in an Unlikely Case

Author:
Lea Elsässer, Svenja Hense, and Armin Schäfer
Publication Date:
10-2018
Content Type:
Commentary and Analysis
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Empirical studies have shown that US politics is heavily tilted in favor of the better-off, as political decisions tend to reflect the preferences of the rich while largely ignoring those of the poor and the middle classes. These findings have prompted a lively debate about potential mechanisms that cause this pattern of unequal responsiveness. Existing studies suggest that specific characteristics of the political system are a major explanatory factor – in particular, private donations and campaign financing. We build on these studies but focus for the first time on an entirely different case. In this paper, we ask whether similar patterns of unequal responsiveness are discernible in Germany, which not only is a more egalitarian country, but also funds election campaigns entirely differently from the US. We analyze an original dataset of more than 800 survey questions posed between 1980 and 2013. The questions deal with specific political decisions debated at the time and cover a broad range of politically relevant topics. Our results show a notable association between political decisions and the opinions of the rich, but none or even a negative association for the poor. Representational inequality in Germany thus resembles the findings for the US case, despite its different institutional setting. Against this background, we conclude by discussing potential mechanisms of unequal responsiveness
Topic:
International Political Economy and Hegemony
Political Geography:
America

2. Neoliberalism without Neoliberals Evidence from the Rise of 401(k) Retirement Plans

Author:
Michael A. McCarthy
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper considers the rise of defined-contribution (DC) pensions – such as 401(k) plans – in order to contribute to the debate about neoliberalism. It challenges the generalizability of two common accounts: the weak state intervention thesis, which argues that neoliberal policy change is driven by state retreat and deregulation, and the state-managed transition thesis, which argues that neoliberal policies are both enacted and managed through new regulations. In contrast, this paper argues that the development of the employer-based pension system between 1970 and 1995 is an instance of “neoliberalism without neoliberals.” A battery of regulations was passed between 1974 and the late 1980s that were intended to make the traditional system of defined- benefit (DB) pensioning more secure. However, this legislation triggered a business shift to 401(k)s. The legislation worked in such a counterintuitive way because of three factors related to changes in “the balance of class forces” in American society: (1) new laws increased costs for firms, with small businesses being hit the heaviest, (2) employment in the manufacturing sector, labor's traditional stronghold, declined as a share of total employment, and (3) because unions were unable or unwilling to unionize emergent sectors of the economy, new businesses in them were not compelled to negotiate DB plans. In such a context, growing regulatory costs pushed many firms to adopt DC pensions for their employees. The outcome was a major policy shift, considered by many to be a defining feature of the neoliberal era.
Topic:
Development
Political Geography:
America

3. Pragmatismus und wirtschaftliches Handeln

Author:
Jens Beckert
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
What alternatives to rational choice theory do exist to explain economic phenomena? I argue that American pragmatism presents a viable alternative for the explanation of key economic incidences. First I illustrate the foundations of pragmatism using three problems regularly encountered in action theory. Then I show how innovation, institutional change, price formation and actors' preferences can be analyzed based on pragmatist premises. I conclude by reflecting on why pragmatism has found so little recognition in economics.
Topic:
International Relations, Economics, Political Economy, and Political Theory
Political Geography:
United States and America

4. The Effects of Convergence: Internationalisation and the Changing Distribution of Net Value Added in Large German Firms

Author:
Anke Hassel and Jürgen Beyer
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The paper examines whether and how the increasing internationalisation of firms impacts on the operation of a co-ordinated market economy. Following the tenets of agency theory it assumes that an emerging market for corporate control changes the monitoring mechanisms that oversee management. Since Anglo- American forms of monitoring are usually associated with a higher return for investors compared with Continental European firms, a change in the distribution of the net value added of firms is expected. Using financial data on 59 large German companies, the paper shows that the emerging convergence of German corporate governance practices to Anglo-American standards has had a weak, but significant, impact on the distribution of net value added. This is in contrast to the impact of the internationalisation of firms on product markets, which does not have an effect. Since the market for corporate control is, however, still underdeveloped in Germany, the main effects remain to be seen.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
America, Europe, and Germany

5. An Emerging Market for Corporate Control? The Mannesmann Takeover and German Corporate Governance

Author:
Gregory Jackson and Martin Hopner
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Corporate governance in Germany is often described as a bank-oriented, blockholder or stakeholder model where markets for corporate control have not played a significant role. This case study of the hostile takeover of Mannesmann AG by Vodafone in 2000 demonstrates how systemic changes during the 1990s have eroded past institutional barriers to takeovers. These changes include the strategic reorientation of German banks from the “house bank” to investment banking, the growing consensus and productivity orientation of employee codetermination and corporate law reform. A significant segment of German corporations are now subjected to a market for corporate control. The implications for the German model are examined in light of both claims by agency theory for the efficiency of takeover markets, as well as the institutional complementarities within Germany's specific “variety” of capitalism. While the efficiency effects are questionable, the growing pressures for German corporations to achieve the higher stock market valuations of their Anglo-American competitors threaten the distributional compromises underlying the German model.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
America and Germany

6. Wage Coordination and the Welfare State: Germany and Japan Compared

Author:
Philip Manow
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Is there a relation between welfare state regimes and national wage setting systems? Peter Swenson in his research on the historical dynamics of the US-American and Swedish welfare state has recently claimed that such a relation does indeed exist. The essay aims to check if this also holds true for the German and Japanese case. In the post-war period both countries have established systems of wage-bargaining that are less centralized than the Swedish system, but in which wages are highly coordinated both within and across sectors, and, subsequently, in which wage compression is relatively high as well. Thus, both countries are confronted with the same problems of wage- and welfare-drift and of firms' exit from the 'solidaristic' or coordinated wage setting that are so typical for Sweden. At the same time the German and Japanese welfare state differ from each other in almost all dimensions. Thus, both cases seem to be ideally suited to provide for a plausibility-check of the Swenson hypothesis. The essay reaches the conclusion that there is indeed ample evidence that both the German and the Japanese welfare state contributed critically to the stability of wage coordination in the era of high growth after World War II. They thus have to be understood as an integral part of the German and Japanese post-war growth model.
Topic:
Economics, Human Welfare, and International Trade and Finance
Political Geography:
United States, Japan, America, and Germany

7. Employment and the Welfare State: A Continental Dilemma

Author:
Fritz W. Scharpf
Publication Date:
07-1997
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Estimates of the comparative health of the North American and Western European economies and societies have had their fashion cycles - from Servain-Schreiber's warnings that Europe was falling behind, rather than catching up with, American technological leadership in the 1960s, to European exasperation over American trade and budget deficits in the 1970s, to anxieties over Eurosclerosis in the early 1980s and over the American loss of international competitiveness in the late 1980s. Presently, by all accounts, the sick man is again Europe, with higher unemployment and much lower rates of job creation over the last two decades or so. The main problem is a rising level of long-term unemployment that mainly affects unskilled workers and, in most countries, young job seekers with low levels of schooling.
Topic:
International Cooperation and Political Economy
Political Geography:
America, Europe, North America, and Western Europe