Policy Performance


Economic Policies

Boosted by years of exceptional economic performance, Germany falls into the top ranks internationally (rank 4) with regard to economic policies. Its score on this measure has improved by 0.3 points relative to 2014.

Germany’s economy has been growing steadily for nearly a decade, with high and stable growth rates, strong employment growth, and buoyant tax and social-security revenue growth. This was driven by expansionary European Central Bank policies, capital inflows from euro zone crisis countries, but also the aftereffects of ambitious economic reforms in the 2000s.

Tax revenues have risen sharply, allowing for budget surpluses and a reduction in the debt-to-GDP ratio from 80.1% in 2010 to 59.9% in 2018. Fears of international tax competition are growing, as Germany’s effective tax burden on companies is the highest of any industrialized country. Costs of integrating the 2015 – 2016 refugee wave have been lower than expected, thanks to successful integration.

Unemployment rates are at their lowest level since reunification, at 5.2%. The new minimum wage was made uniform in 2018 after a transitional period, with no detrimental employment effects reported. Fiscal sustainability will become a more pressing issue toward 2030, as the Baby Boomer generation retires.

Social Policies

Showing gains across its social system, Germany receives a high overall ranking (rank 8) in the area of social policies. Its score on this measure has gained 0.3 points relative to 2014.

Education outcomes have improved in recent years, with the quality of primary and higher education showing consistent gains. The country’s dual vocational-training approach is closely tied to labor-market demand, resulting in low youth-unemployment rates. The employment boom has resulted in record low level of households on social support, despite the recent influx of refugees.

The mixed public and private health care system is of high quality, but cost pressures are growing. Parental-leave programs are generous. Child-care availability is improving. Women’s employment rates are quite high, though many women work only part time. Pension benefits have been boosted in recent years, requiring rising state subsidies and intensifying sustainability concerns.

While the issues of immigration and asylum policy remain political flashpoints, medium-term integration efforts appear to be going well. However, a xenophobic party has capitalized on public concerns, becoming the third-largest parliamentary group. The government has expanded development aid particularly to North Africa, seeing to address drivers of emigration.

Environmental Policies

Though blemishes have appeared on its previously strong climate-change record, Germany still scores well overall (rank 10) in the area of environmental policies. Its score on this measure has declined by 0.3 points relative to 2014.

Despite a strong push into renewable energy production and energy-efficient infrastructure, Germany will fail to meet its 2020 greenhouse-gas emissions-reduction goals. Part of the issue is the continued reliance on coal as the country seeks to phase out nuclear power by 2022.

Driven by increasingly vocal voters’ concerns, the country has played a key role in international climate policy. However, Chancellor Angela Merkel opposed new EU climate objectives announced in 2018, which seek to reduce CO2 emissions by 45% compared to 1990 instead of by only 40%.

The country performs relatively well in the areas of water resources and biodiversity, but agricultural practices remain an area of environmental concern.



Quality of Democracy

Reflecting a stable system founded on the rule of law, Germany’s score for democracy quality places it in the top ranks (rank 5) internationally. Its score on this measure has improved by 0.1 point since 2014.

Parties receive public and private funding, with some transparency concerns. Courts blocked an attempt to ban the far-right NPD party, but a subsequent law bars parties that oppose the basic democratic order from receiving public funding. The media is largely free of political interference, with considerable diversity of ownership despite growing financial difficulties.

Civil rights are broadly respected, but the former head of the domestic security agency was involved in several scandals, and forced to retire. Non-discrimination laws are extensive, and same-sex marriage has been legalized. The issue of public-school teachers wearing headscarves has been controversial.

The legal system, government and administration act predictably. Judicial review is strong, and corruption is rare. While political figures’ income-disclosure requirements have been strengthened, some loopholes remain.



Executive Capacity

Despite tensions within the governing coalition, Germany scores relatively well (rank 11) with respect to executive capacity. Its score on this measure has improved by 0.1 point relative to 2014.

The domestic agenda stems largely from negotiations between the coalition-partner party leaders, with the Chancellery possessing comparatively limited independent powers, and disputes resolved in the coalition committee. Ministries draft bills within their subject area with little Chancellery involvement, giving them considerable leeway to pursue their own or their party’s interests.

Several RIA programs are in place, producing generally high-quality reports. Sustainability concerns are regularly reviewed. While the government routinely meets with societal stakeholders, bargaining processes are not highly institutionalized. The renewed grand coalition has already achieved a number of its early coalition-agreement goals effectively.

The government has nevertheless seen clashes between ministries and parties on issues such as migration policy, badly undermining communication coherence. Regulations are typically enforced in an effective, unbiased way. A far-reaching constitutional change has reformed mechanisms such as federal-state funding, highway funding, federal oversight mechanism, and municipal funding.

Executive Accountability

Despite a few recent oversight challenges, Germany falls into the top ranks internationally (rank 6) with regard to executive accountability. Its score on this measure has improved by 0.1 point relative to 2014.

Parliamentarians have sufficient resources and strong executive-oversight powers, with the latter recently reconfirmed by the courts. The Federal Court of Audit is well-funded and powerful. A parliamentary committee serving an ombuds function has limited importance, but the independence of the decades-old data-protection authority is well protected.

Despite widespread news consumption, surveys have reflected a declining interest in political and parliamentary debates, particularly among young people. Populist sentiments are becoming more widespread. However, trust in the traditional media is rising.

Decisions within the main political parties are made largely by top party elites. Employers’ organizations and unions are powerful and sophisticated. Other interest groups are increasingly influential, particularly at the local level.
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