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  • Author: Fritz W. Scharpf
  • Publication Date: 02-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: In order to be simultaneously effective and liberal, governments must normally be able to count on voluntary compliance – which, in turn, depends on the support of socially shared legitimacy beliefs. In Western constitutional democracies, such beliefs are derived from the distinct but coexistent traditions of “republican” and “liberal” political philosophy. When judged by these criteria, the European Union – if considered by itself – appears as a thoroughly liberal polity which, however, lacks all republican credentials. But this view (which seems to structure the debates about the “European democratic deficit”) ignores the multilevel nature of the European polity, where the compliance of citizens is requested, and needs to be legitimated by member states – whereas the Union appears as a “government of governments” which is entirely dependent on the voluntary compliance of its member states. What matters primarily, therefore, is the compliance-legitimacy relationship between the Union and its member states – which, however, is normatively constrained by the basic compliance-legitimacy relationship between member governments and their constituents. Given the high consensus requirements of European legislation, member governments could and should be able to assume political responsibility for European policies in which they had a voice, and to justify them in “communicative discourses” in the national public space. This is not necessarily true of “non-political” policy choices imposed by the European Court of Justice. By enforcing its “liberal” program of liberalization and deregulation, the ECJ may presently be undermining the “republican” bases of member-state legitimacy. Where this is the case, open non-compliance is a present danger, and political controls of judicial legislation may be called for.
  • Topic: Civil Society, Democratization, Government, Politics, Political Theory
  • Political Geography: Europe
  • Author: Achim Goerres
  • Publication Date: 12-2007
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: Is there an antagonism between young and old in the electoral arena that could lead to the obstruction of welfare-state reforms? This article argues that this notion is a myth and lacks empirical evidence for the case of Germany. It is true that (a) there are imminent majorities of voters aged 50 and older; (b) older voters benefit from many welfare state programs and (c) life-cycle interests shape some attitudes towards single public policies. However, these facts alone do not represent an antagonism between young and old in the electoral arena. Firstly, differences in party preferences between age groups are due to generational effects associated with early political socialization. Secondly, life-cycle interests do not shape the German party competition because age is not a political division line (cleavage). Young age/old age is only a transitional boundary that all of us aspire to cross, meaning that material old-age interests are important to everyone. Finally, grey interests parties are notoriously weak and try to become parties for the interests of all age groups.
  • Topic: Government, Politics
  • Political Geography: Europe, Germany
  • Author: Jens Beckert
  • Publication Date: 10-2007
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: Germany introduced a federal inheritance tax in 1906. Historically, the share of its revenues compared to total tax revenues has always been low. Currently, less than one percent of total revenues are generated from inheritance tax. In countries like France, the United States and England, inheritance tax revenues are higher. With its ruling in 2007 the German supreme court has forced parliament to revise regulations on inheritance taxation. Various proposals are currently the subject of intense political debate. I take this discussion as the starting point for an investigation of fundamental arguments for and against estate taxation. Proposing that inheritances be taxed as a further type of income within the context of the income tax, I examine the impact of inheritance taxes on economic performance, family solidarity and the political community as well as the relationship between inheritance taxation and important value principles of individual freedom, social justice and equality of opportunity.
  • Topic: Government, Political Economy
  • Political Geography: Europe, France, Germany
  • Author: Fritz W. Scharpf
  • Publication Date: 07-2007
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The function of legitimacy is to ensure voluntary compliance with unwelcome exercises of governing authority. Since practically all European law needs to be implemented and enforced by the governments and courts of the member states, the EU does not have to face its citizens directly. It follows that the legitimacy of European governance ought to be conceptualized at two levels. At one level, the legitimacy of member states is decisive for the compliance of individuals and firms, regardless of the ultimate origin – international, European or national – of the rules that demand this compliance. At the other level, the legitimacy of the European “government of governments” is decisive for the voluntary compliance of member states with the obligations imposed on them by the EU. What should be worrying however is the impact which EU governance – especially the rules of negative integration defined by politically non-accountable actors – may have on the legitimacy of member states, and ultimately on their capacity to comply.
  • Topic: Government, International Law, Treaties and Agreements
  • Political Geography: Europe
  • Author: Marta Kahancová
  • Publication Date: 02-2007
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: Increased international competition poses challenges to companies' organizational practices, including human resource management. For multinational companies operating simultaneously in diverse local conditions this challenge implies a decision between either opting for universal best practices or adapting their employment strategy to differing local standards in host countries. What influences whether work practices are similar or differ when deployed in differing conditions? Why are some companies committed to their workers' welfare while others are not? This paper attempts to answer these questions by studying work practices, namely work systems and fringe benefits, in a Dutch multinational company (MNC) and its manufacturing subsidiaries in Western and Eastern Europe. Evidence suggests that the observed patterns are best explained by the interplay of three factors. Rational economic interest, company values, and local institutions yield subsidiary work practices that are embedded in, but not adapted to, local standards. The MNC's value system accounts for the fact that generous benefits are offered without a direct relation to the company's profit maximization and without external societal and institutional pressures to provide such benefits.
  • Topic: Economics, Government, Political Economy
  • Political Geography: Europe
  • Author: Cornelia Woll
  • Publication Date: 10-2006
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: What role do firms play in the making of EU trade policy? This article surveys the policy domain and lays out the instruments firms can employ to influence decisions on trade. It underlines that European trade policy is characterized by a high degree of institutional complexity, which firms have to manage in order to be successful. In particular, the European Commission works intensively to solicit business input in order to gain bargaining leverage vis-á-vis third countries and the EU member states. This reverse lobbying creates a two-channel logic of trade policy lobbying in the EU. Corporate actors have a very good chance of working closely with the European Commission if they can propose pan-European trade policy solutions. This can be either trade liberalization or EU-wide regulatory restrictions on trade. Demands for traditional protectionist measures, especially those that reveal national interest divergences, are difficult to defend at the supranational level. Protectionist lobbying therefore goes through the national route, with corporate actors working to block liberalization by affecting the consensus in the Council of Ministers. The chapter illustrates this two-channel logic by studying business—government interactions in agricultural trade, textiles and clothing, financial services, and telecommunication services.
  • Topic: Economics, Government, Political Economy
  • Political Geography: Europe
  • Author: Andreas Broscheid, David Coen
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: This paper presents and tests a micro-theoretical model of EU lobbying across policy domains. In particular, we focus on two questions: first, we want to know why the number of interest representatives differs across policy domains and, second, we investigate why we find institutionalized fora for interest representation in some policy domains but not in others. Our argument focuses on the Commission's need for expert information and its costs of managing contacts with a large number of interest representatives. Both factors provide incentives for the Commission to create restricted-access fora as the number of interest representatives increases. Using cross-sectional data on interest representation in a wide range of policy domains, we find some support for our hypotheses.
  • Topic: Development, Government, Political Economy
  • Political Geography: Europe
  • Author: Fritz W. Scharpf
  • Publication Date: 09-2005
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The unique institutions that make up Germany's "unitary federal state," long considered part of the country's post-war success story, are now generally perceived as a "joint-decision trap" impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high-powered bicameral Commission set up in the fall of 2003 failed to reach agreement on constitutional reforms. The paper analyzes the misguided procedural and substantive choices that led to this failure, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels.
  • Topic: Economics, Government, Political Economy
  • Political Geography: Europe, Germany
  • Author: Martin Höpner, Lothar Krempel
  • Publication Date: 09-2003
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: For over 100 years, the German company network was a major feature of organized corporate governance in Germany. This paper uses network visualization techniques and qualitative-historical analysis to discuss the structure, origins and development of this network and to analyze the reasons for its recent erosion. Network visualization makes it possible to identify crucial entanglement patterns that can be traced back historically. In three phases of network formation – the 1880s, 1920s and the 1950s –, capital entanglement resulted from the interplay of company behavior and government policy. In its heyday, the company network was de facto encompassing and provided its core participants, especially the banks, with a national, macroeconomic perspective. In the 1970s, a process of increased competition among financial companies set in. In the 1980s and 1990s, declining returns from blockholding and increased opportunity costs made network dissolution a thinkable option for companies. Because of the strategic reorientation of the largest banks toward investment banking, ties between banks and industry underwent functional changes. Since the year 2000, the German government's tax policy has sped up network erosion. Vanishing capital ties imply a declining degree of strategic coordination among large German companies.
  • Topic: Economics, Government, Governance
  • Political Geography: Europe, Germany
  • Author: Armin Schäfer
  • Publication Date: 07-2003
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: This paper looks at the historical developments that led to the Schuman Plan in 1950, which today is seen as a starting signal for the European integration process. It argues that this announcement by the French foreign minister constituted a genuine change of strategy that can only be understood in the light of the preceding historical chain of events. The first steps of European integration were part of a search for suitable institutions capable of dealing with Europe's economic and political problems, which also involved the Bretton Woods institutions, Marshall Aid and the OEEC, and, finally, the ECSC. These organizations' respective fate depended on the strategies of key states, which in turn were driven by domestic concerns. Aligning their interests took several steps and was only completed when all three organizations existed in parallel. Throughout this process, all states had to abandon their preferred course of action and learn to settle for second best.
  • Topic: Civil Society, Economics, Government, International Trade and Finance
  • Political Geography: Europe