Division 1 - Erosion of the German “participatory capitalism” - how sustainable is the German development model?

This report division encompasses three work packages and it is being coordinated by the Institute of Economic Structures Research (GWS) in Osnabrueck. The main topic is the development model of the economy with its institutional order. The German social and production model has been described in soeb 2 as a historically determined regime of economic development. Its rise and fall was common for all developed capitalistic industrial countries. At the same time, its change was characterized by the specific traits of the German (“Rhenish”) variation of capitalism. This division’s working title reflects this pattern of interpretation. The work within this division will contribute to answering the question of how sustainable the German development model is, which new structures may emerge through the change and which macroeconomic resources are available for individual participation. The analysis will take into account the European and global integration of the export-oriented German economy, as well as the sectoral effects of structural change, effects of unequal income distribution and material living standards, the development of resource efficiency and other indicators of sustainability.

An empirically based macro-econometric modelling of the socioeconomic development within time series since 1991 allows the projection in particular of the demographically and socioeconomically determined supply and demand relations in the labour market, of the ecologic sustainability indicators and of the regional disparities until 2030 (WP 1). Microdata obtained from the analyses in other reporting divisions will be used for alternative development scenarios. The remaining two work packages of the reporting division 1 are devoted to the functioning of the capital market, which was already a distinctive feature of soeb 2 in the context of the observation of the change in the German production model. Due to the present crisis in the banking and financial sector, this is a first-time attempt to implement a system based on scientific and indicator-supported permanent observation of both the financial system (WP 2) and corporate financing (WP 3).