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  • Author: Donato Di Carlo
  • Publication Date: 04-2018
  • Content Type: Commentary and Analysis
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: German public sector wage restraint has been explained through the presence of a specific type of inter-sectoral wage coordination in the industrial relations system – i.e., export sector-led pattern bargaining. This paper has a twofold ambition. First, as a literature assessing exercise, I review the literature in industrial relations and comparative political economy (CPE) and find that (1) the origins and mechanics of inter-sectoral wage coordination through pattern bargaining have never been laid out clearly; (2) the mechanisms of the pattern bargaining thesis have never been tested empirically; and (3) the CPE literature reveals a limiting export-sector bias. Second, as a theory-testing exercise, I perform hoop tests to verify whether the pattern bargaining hypothesis can really account for wage restraint in the German public sector. I find that Germany cannot be considered a case of export sector-driven pattern bargaining. These findings challenge core tenets of a longstanding scholarship in both CPE and industrial relations. Most importantly, they open a new research agenda for the study of public sector wage-setting that should shift its focus to public sector employment relations, public finance, public administrations, and the politics of fiscal policy
  • Topic: International Political Economy, International Affairs
  • Political Geography: Germany
  • Author: Fritz W Scharpf
  • Publication Date: 02-2018
  • Content Type: Commentary and Analysis
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The end of the Bretton Woods regime and the fall of the Iron Curtain deepened the export orientation of the German model of the economy. Only after entry into the Monetary Union, however, did rising exports turn into a persistent export–import gap that became a problem for other eurozone economies. This Discussion Paper shows why the present asymmetric euro regime will not be able to enforce their structural transformation on the German model. Neither will German governments be able to respond to demands that would bring the performance of the German economy closer to eurozone averages. Instead, it is more likely that present initiatives for financial and fiscal risk sharing will transform the Monetary Union into a transfer union.
  • Topic: International Political Economy, International Affairs
  • Political Geography: Germany