Another key ‘export’ is the legal system, which ranks highly in all international
comparisons. Germany also regularly occupies leading positions in rankings of
governance and administration quality.
This formidable success is the result of a unique combination of micro- and
macroeconomic factors, as well as institutional characteristics that have
complemented and mutually reinforced each other.
In the following sections we outline the five pillars of Germany’s success.
1. Macropolicies focused on stability and growth
2. Institutions grounded in German ‘ordoliberalism’
3. Global companies with unique structures
4. An equitable system of social security and cooperative social partners
5. A long-term perspective by companies and citizens
Of course, Germany cannot afford to rest on its laurels. The rate of reform has
slowed dramatically in recent years. In the labour market and in pensions, some
measures have been introduced that could prove problematic in future. In
energy policy, Germany is still looking for a way to reconcile economic and
However, the biggest challenges may arise within
the European Monetary Union or from the mood shifting against globalisation in
many parts of the world. We will focus on this in the final section of this article.
Voices from many different camps might criticise us for being too favourable in
our assessment of Germany.
Nevertheless, we believe it is right and important,
in a world that is increasingly dominated by crises and unwelcome surprises, to
explore the reasons behind Germany’s political and economic stability, which
has now endured for more than half a century and is so often taken for granted.
We can only learn from it.