GERMANY

Germany has moved up to rank 8 (+3 ranks relative to SGI 2009).

The improvements are largely attributed to strong relative gains in the economy. While most countries lost many jobs during the economic crisis, Germany’s labor market weathered the storm relatively smoothly thanks to reforms introduced before and during the crisis.

Nonetheless, systemic reforms addressing the health care system and social disparities remain key issues in need of urgent attention. In addition, demographic pressures are growing.

General elections in September 2009 paved the way for a center-right government which superseded the Grand Coalition government (2005-2009).

Once again, Germany’s quality of democracy ranks high (6th) in the OECD.

German democratic institutions are given great weight. Electoral processes are fair and protected by the constitution. The German Basic Law ensures that members of parliament are elected in direct elections by secret ballot. Parties have unrestrained access to the media, and voting and registration rights are transparent.

Freedoms of expression, press and broadcasting are guaranteed. While the relationship between public authorities and private media is unproblematic, there are established dependencies between authorities and public media.

State institutions generally demonstrate high standards of respect for individual freedoms and protect civil rights. The court system is independent of political influence and effectively protects individuals.

At rank 12, Germany’s economy shows major improvements (+8 ranks relative to SGI 2009).

Once called the “sick-man” of Europe, Germany’s economy is now considered relatively robust. A more flexible labor market and government incentives for reduced working hour schemes brought employment levels in 2010 above those seen in 2008 - even though the German economy faced in 2009 its deepest post-war recession.

Germany’s fiscal performance suggests that years of reforms have started to pay off. The deficit remained below 5% despite major stimulus packages. In 2009, a constitutional debt limit was introduced.

At rank 18, Germany’s ratings fall close to the middle of the OECD list in terms of social policy.

The country’s social expenditures remain high, but inequality and poverty risk is increasing. Regional heterogeneity is substantial, with average poverty levels significantly higher in eastern Germany than in the comparatively well-off western federal states, particularly those in the south and southwest.

Several aspects of social policy have been subject to reform. The most recent pension reform in 2007 included a gradual increase of the pension age from 65 to 67.
Policy-makers have focused sharply on improving the ability to reconcile employment and parenthood. However, the need to render health policy sustainable remains an urgent task.

Several changes have been made to integration policy, but with only limited effects.

Germany is thoroughly integrated into international alliances such as NATO, the UN, EU, and OSCE. The army provides an important contribution to security and defense.

Founded as a mere defense army, the German military has begun to face new tasks and international military engagement. Whether missions such as those in Afghanistan really serve the long-run security of German citizens remains controversial.

Internal security is a salient issue on the political agenda and German governments generally provide well for it. Internal security policy is also closely intertwined with EU strategies and policies.

At rank 5, the sustainability of Germany’s resource use has changed little in aggregate relative to the SGI 2009.

The country has shifted the focus of its environmental policy to eco-taxes, tradable permits and environmental agreements. While embedded in the broader European framework, Germany remains a pioneer in the environmental field.

R&D spending has increased, now exceeding the EU average. Federal and state governments resumed a joint research support program, aiming to increase the budget by 5% annually.

Education quality and equality have become controversial issues. PISA surveys have exposed a significant performance difference between children from differing socioeconomic levels.

At rank 11, Germany gained 2 positions in the Management Index.

Despite these gains, German governments continue to demonstrate relatively low levels of steering capability. This is in part a structural problem associated with the competition that reigns between two or more coalition partners. Changing majorities in parliamentary chambers and disputes over budgetary competences at various levels of government increasingly hinder policy implementation.

Although administrative structures appear at first glance sclerotic, Germany demonstrates remarkable adaptability to international and supranational developments.

Citizens, parliament and intermediary associations have the means to hold the government accountable. However, the percentage of informed citizens is on the decline.

Falling three places to rank 21, steering capability is not a German government strong point.

Neither the outgoing Grand Coalition nor the incoming center-right government introduced any significant strategic planning practices.

While formally capable of monitoring line ministries, the chancellery’s gatekeeping power is in fact often sacrificed to party interests. Regulatory impact assessment and needs analysis are an improving part of the institutional culture.

Governments seldom use social pacts or other bargaining institutions in consulting with societal organizations.

Competition between coalition partners, often leaking into public view, explains a sometimes very dissonant communications policy.

At rank 16, Germany’s policy implementation capacity has fallen appreciably (-6 ranks) relative to the SGI 2009.

While the Grand Coalition (2005-2009) was somewhat successful in achieving its policy objectives, the subsequent center-right government was able to do so only as long as it held a majority in the Bundesrat.

Line ministers are responsible for policies in their area of jurisdiction. However, they are bound to follow general guidelines set out by the chancellor.

The funding of tasks delegated from the national to subnational level is a source of considerable tension. A federalism reform in 2006 made some progress on this issue, but tension between levels of government remains, often focusing on their respective financial responsibilities.

At rank 9, Germany’s institutional learning capacity has shown minor improvements (+3 ranks) relative to the SGI 2009.

The government’s organization is still based on structures grounded in the post-WW II period or even the 19th century; however, the influence of international and supranational developments, particularly EU regulations and EU law, is significant. Germany is overall a very constructive partner in international reform initiatives.

There is neither a particular institution nor commission that independently and impartially monitors the government’s activities. Institutional reforms aimed at improving executive management capacities are rare. One exception is the 2006 federalism reform, which aimed at clarifying the division of competences between the various government levels.

At rank 9, Germany’s executive accountability assessment reflects a public with comparatively sophisticated political knowledge, and rising NGO influence.

People are more interested in politics than was the case four decades ago, a trend more evident in the former West than the former East.

The German Bundestag is a “working parliament” – that is, committees are of pivotal importance in formulating and preparing legislative initiatives.

In-depth information on government decisions is provided by public TV and radio broadcasts, but newspaper circulation and the quality of the print media are relatively low. Parties function as a link between state and society, but frequently raise unrealistic expectations. Business and other associations are reasonably influential within the policy-making process.