German Politics and Society

This essay looks at postunification Germany through the pages of German Politics and Society. The articles published during this period reveal the evolution of intellectuals' understanding of the unified country—concerns that mirrored changes in social, political, and cultural reality. Of course, academics are beholden to their own histories and Weltanschauung, a fact that produced, at times, prescient, sometimes fragmentary, and sometimes alarmist interpretations and analyses of the country in an attempt to provide orientation. Nevertheless, this review shows how German watchers have slowly up-dated their paradigms and are now not worrying as much about a mellowed, less German country that has fascinated them over the decades.

Twenty years after all the excitement, Germans seem to be genuinely of two conflicting minds about unification. One is characterized by awe over the accomplishments of 1989-1990, the other by disappointment and even bitterness over unfulfilled ambitions and promises. These contrasting interpretations and assessments of unification are fluid, but surface repeatedly in the quality print media. This chapter examines the recurring themes, interpretations, and narratives about unification twenty years on, and seeks to trace the interconnections between the social, economic, and political dimensions of unification. As such, these contemporary printed narratives can tell us a great deal about how a people views its recent past, what its priorities are, and how it is facing the future. The analysis reveals that public discourse on unification twenty years after the fact resembles a blind spot—look straight at it, and it disappears, replaced by blank spot—a seemingly irreducible gap between East and West. Avert one's gaze, and the spot fills in, almost seamlessly.

Few aspects of politics have been as variable as partisan politics in the two decades since German unification. In the East, citizens had to learn about democratic electoral politics and the party system from an almost completely fresh start. In the West, voters experienced a changing partisan landscape and the shifting policy positions of the established parties as they confronted the challenges of unification. This article raises the question of whether there is one party system or two in the Federal Republic. We first describe the voting results since 1990, and examine the evolving links between social milieu and the parties. Then we consider whether citizens are developing affective party ties that reflect the institutionalization of a party system and voter choice. Although there are broad similarities between electoral politics in West and East, the differences have not substantially narrowed in the past two decades.

After the two German states unified in 1990, the tendency to transplant West German practices to the former East Germany was particularly pronounced in areas where systemic differences and perceived inefficiency met ideological reservations. The higher education system was among them. Comprehensive institutional, policy, and personnel transfer from West to East ensued. Starting in the mid 1990s after many failed initiatives, however, new policies were launched in the unified Germany. Reinforced by feedback from institutional and policy transfer to the East, factors such as Europeanization and globalization empowered newly formed advocacy coalitions to advance a reform agenda. Competition and performance seeded other ideas, prominent among them diversification, internationalization, autonomy, and accountability. Existing institutions and firmly rooted traditions still condition and limit change, and reforming the reforms has become commonplace. Differentiation among Länder and higher education institutions has become more pronounced, adding to the variety of outcomes. In ways unforeseen in 1990, some areas of the German higher education system have seen paradigmatic change, while others have survived relatively unscathed. The recalibration of the system continues, and reform pressure persists.

Has economic unification succeeded? Assessments differ, depending on the criteria selected, and the benchmark used. In many areas, from productivity to infrastructure and housing, dramatic economic improvements are readily apparent. Yet daunting challenges remain: the speed of productivity convergence has slowed, unemployment remains high and net emigration continues. Looking forward, demographic and fiscal trends pose serious challenges. This paper begins with a brief look back at the experience since 1989 before turning to a discussion of current and future challenges.

This article investigates the progress that the eastern German economy has made since unification in two areas: unemployment and output. It finds that unemployment has remained persistently higher in eastern than in western Germany and output levels have remained extremely uniform across the eastern states. Keynesian and neoclassical economists have proposed differing explanations for the endurance of high unemployment in the East. The latter have the more convincing argument, which blames high initial wages in eastern Germany for producing a labor "trap," but this account is not without flaws. The best explanation for output uniformity is the content and volume of public investment in eastern Germany since unification. Public policy in the years immediately following unification is in large part responsible for both outcomes. Economic modeling indicates that wage subsidies targeted at low-income employment would be the most effective means to break the current high-unemployment equilibrium in eastern Germany, but the political barriers to adopting such a policy are just as formidable as they were a decade ago, when such a policy was briefly considered.

German unification acted as a catalyst for the substantial transformation of the German welfare and employment regime which has taken place over the last two decades. The changes can be described as a process of a partial liberalization of the labor market within the boundaries of a coordinated industrial relations system and a conservative welfare state. This article depicts the transformation as a trend towards a more liberal welfare and employment regime by focusing on the shifting boundaries between status and income maintenance and poor relief systems.

Since German unification there have been dramatic and highly visible changes in the German financial system and relations between banks and firms in Germany. The traditional Hausbank system has weakened, as securities markets have become more important for both borrowers and savers. The demands of financial investors on how German firms manage themselves have—for better or worse—become increasingly influential in this time. In this article, I advance the thesis that bank-industry relations in Germany became increasingly differentiated, with one set of firms moving into an institutional environment readily characterized as market-based finance. Meanwhile, most German firms remain in a bank-based environment that, while not quite the same as the Hausbank model that prevailed at the time of unification, is still easily recognized as such. These changes in the financial system have had numerous consequences for the German economy, including increased pressure on firms to make greater profits and increased pressure on labor to limit wage gains and make concessions in the interest of corporate competitiveness.

For much of the past two decades since unification, the literature on the German economy has largely focused on the erosion of the German model of organized capitalism and emphasized institutional decline and the corresponding rise of neoliberalism. The first part of the article analyzes the strains unification placed on German economic performance that caused many observers to call for modification of the model in a more neo-liberal direction. The second part takes a different focus and lays out the main rationale of the paper. It inquires why such a coordinated market economy was created in the first place and whether a renewed form of it might still be useful for Germany, the European Union, and other developed democracies in the early twenty-first century. The third section articulates the origins of the institutional and ideational components of these coordinated market economy models, during both the Bismarckian and Social Market Economy periods. The final portion inquires whether the failure of the contemporary liberal market economy approach in the wake of the worldwide financial crisis and severe recession represents a possible opening for the creation of a third coordinated market economy not only for Germany but for a redesigned European Union.

Since the end of World War II, scholars have attempted to make sense of Germany's insistent multilateralism. Many concluded that this sacrifice resulted from a deeply ingrained political identity that stressed international cooperation and shunned parochial national politics. More recently, however, German leadership has suggested a willingness to weaken its role as global altruist and reassert its interests in Europe and abroad. This article argues that core German attitudes towards regional and global cooperation have changed. But rather than a shift to "national self-interests," I argue that the unification process elevated long-held beliefs about policy conservatism and caution that now compete with the postwar multilateral policy frame within the foreign policy elite. In addition to the pro-European, multilateralist agenda, a second powerful lesson of the interwar period emphasized the dangers associated with sudden change and the benefits of incrementalism. Owing to the uncertainty associated with sociopolitical events, decision makers must rely on their beliefs about how the world works to guide their decisions. To explore the relationship between beliefs and Germany's regional policy, the paper examines the government's regional response to the post 2008 financial crisis and the banking crisis in Eastern Europe.

Germany's growing weight on the world stage is indisputable, and its foreign policy is exceptional among powerful states. This article argues that while the original vision of cooperative security and multilateralism guiding German policy was shaped by occupation, division, and weakness, it has shown astonishing resilience, even as Germany has regained sovereignty, unity, and power. For a weak and divided Federal Republic, a vision that eschewed the exercise of power ensured survival; for a strong united Germany, a vision that minimizes the role of power is revolutionary and controversial. I argue that this revolutionary policy is now the most effective one to meet the challenges of a transformed world marked by new and unconventional threats and risks—a world in which traditional measures of power have lost much of their usefulness in securing the national interest. Ironically, however, while the policy vision that downplays the role of power persists, Germany's material power has grown. Germany's renewed power position makes it an influential actor in an international system where perceptions of power still matter. And the old policy vision makes German foreign policy the most appropriate for solving new global problems whose solution defies power politics. This paradoxical combination of power and vision in Germany's postunification foreign policy has introduced a new and effective form of "normative power" in global politics.

Germany-watchers and many Germans have long been sour about the unified country. Often for well-founded reasons, there are few policy or cultural areas that have not been subjected to withering criticism: failed integration of immigrants, an antiquated political economy, insufficient coming-to-terms with the past, atrophied parties, or lackluster foreign policy. Nevertheless, the twentieth anniversary of the fall of the Wall and unification is an appropriate moment to pause and reflect on the accomplishments of contemporary Germany—export champion, environmental pioneer, cultural leader, and staunch multilateral European. Despite all of the problems of the last twenty years and the daunting challenges ahead, perhaps Germans can dare some cautious optimism and even a sense of pride.