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Über dieses Buch

Institutions have both positive and negative effects on economic performance. The theoretical and empirical understanding of the roles played by institutions, norms and culture in the functioning of markets still is limited. This book contributes to a better understanding of the role played by institutions in economic life and to more balanced and better founded policy decisions related to the (re)structuring of industrial economies in response to the structural changes - internationalisation of the economies, the advances in information and communication technology and the ageing of populations - they all are confronted with.





1. Good Neighbours: Germany and the Netherlands

All OECD Member States are confronted with a number of important structural changes. These common changes include: the internationalisation of the economies, the advances in information and communication technology, and the ageing of the population and the labour force. There are many definitions of internationalisation in use. A broad definition is: “the intensification of economic, political, social and cultural relations across borders” (Holm and Soerensen 1995, p. 1). Partly internationalisation is the result of a purposeful policy to lift barriers on international trade and capital flows. The new information and communication technologies also intensify and facilitate the internationalisation process. The third common change, the ageing of populations creates considerable pressure on the financing of social programmes. While expenditure on social programmes is rising due to the ageing of populations, the number of working age people will be growing only slowly or declining. A consequential fiscal crisis has to be prevented.
Lei Delsen, Eelke de Jong

Institutional Differences in the Welfare States


2. Wage Bargaining, Labour Markets and Macroeconomic Performance in Germany and the Netherlands

Dutch economic performance in the 1990s has drawn envious attention from Germany: unemployment is low (6% in 1997 and falling), economic growth is strong, and its combination of low inflation and small budget deficit should allow it painlessly to meet Maastricht criteria for European Economic and Monetary Union. While similar economic results have also been achieved in the United States, the extent of deregulation implied by this approach has made it unpalatable to important actors in the Federal Republic of Germany including trade unions, Chancellor Helmut Kohl, and the management of many large firms. Hence, as Germany looks abroad for solutions to its own economic woes, the Dutch experience increasingly appears to offer a third way between business-as-usual and wholesale deregulation on the Anglo-Saxon model.
David Soskice, Bob Hancké, Gunnar Trumbull, Anne Wren

3. The Dutch Employment Miracle? A Comparison of Employment Systems in the Netherlands and Germany

The Netherlands are attracting increasing admiration. There are many good reasons why this should be so. However, the one that concerns us here is the country’s recent successes in the labour market. In the 1980s, the unemployment rate in the Netherlands was still one of the highest in the European Community, and the Federal Republic of Germany had one of the lowest. Today, the positions have been reversed. Why is this? Is there such a thing as a Dutch employment miracle? What contribution has labour market policy made to this state of affairs? Can we learn anything from the Netherlands or does the German model, once so highly praised, still retain a certain charm?
Günther Schmid, Maja Helmer

4. Benchmarking the German and Dutch Welfare States

Several times a year competitiveness reports are published in which countries are ranked according to their economic performances. These reports as a rule conceive welfare state institutions to be improductive and detrimental to the growth potential of economies. The incidence of institutions, such as a large share of public expenditure on social security, statutory minimum wages and a centralised bargaining structure in industrial relations, in these reports is subtracted from economic performance on, what is basically no more than an assumption that it is a competitive disadvantage (see, for example, Sachs and Warner 1996). Yet, this has left observers of the sound economic performance of extensive welfare states in the past and the present puzzled. The Dutch Ministry of Social Affairs and Employment has published a competitiveness report in 1996 that explicitly focuses on the impact of the welfare state on economic performance. This chapter draws primarily on this report. It will address two questions: i) to what extent are economic performances determined by welfare state institutions? and, more specificly ii) are there differences in German and Dutch institutions that explain the current diverging economic performances of both economies? To examine these questions the Federal Republic of Germany and the Netherlands are compared with two liberal market economies: the United States of America and the United Kingdom, and another welfare state: Sweden.
Arthur van de Meerendonk

Financial and Competition Policies


5. The Financial Structure in the Netherlands and Germany: Different, Harmonious, and on the Move?

The current favourable economic performance of the Netherlands compared to Germany is often attributed to moderate wage developments as well as to the fact that structural measures have been taken at a relatively early stage. These structural measures have mainly served to improve the functioning of labour and goods markets. Apart from differences in the structure of labour and goods markets, many differences also exist between German and Dutch capital markets. Apparently, these differences in the structure of financial markets have not harmed the close monetary relations between the two countries. For almost 15 years now, the guilder has been linked very tightly to the Deutschmark, and the credibility of this link is not a heavily debated issue in financial markets, to say the least.
Lex Hoogduin, Henk Huisman

6. A Stable Partnership — German-Dutch Monetary Relations in the Run-up to EMU

For a long time now German-Dutch monetary relations have been just as they ought to be between all future partners in the monetary union: trouble-free, steady and very close. The exchange rate of the Dutch guilder against the Deutschmark has been stable for years, and long-term interest rates are virtually identical.
Reimut Jochimsen

7. Comparing Dutch and German Competition Policies

The issue of comparing the Dutch and German economies has received considerable attention, in particular on the Dutch side of the border. The general view is that both economies are very closely related and that Germany acts as a leader. This leads some economists to think, that Dutch growth figures can be forecasted merely by looking to Germany to see what the Dutch economic growth figures are (cf. Fase and De Bondt 1994). Recently, however, this view has been criticised. Dutch employment and growth forecasts for 1996 and 1997 are substantially higher than German forecasts. It is the combination of Dutch structural policy, wage moderation and sound public finance, which is responsible for our better economic performance.
Raymond Gradus

Concluding Remarks


8. Germany and the Netherlands: Who Follows Whom?

It is now time to take stock and to see how the arguments presented by the various authors can be used to answer the questions raised in Chapter 1. These questions are:
  • what are the advantages and disadvantages of the Rhineland model relative to the Anglo-Saxon model for structuring the economy?
  • are the changes in the Netherlands an example for the necessary changes in the Federal Republic of Germany and other Member States of the European Union?
  • will the increased internationalisation and the strife for integration in Europe result in a uniform structuring of the European economies?
Lei Delsen, Eelke de Jong


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