Good Example Of Research Paper On Germany: Country Political Economy Profile

Type of paper: Research Paper

Topic: Germany, Economics, Business, Politics, World, Commerce, Trade, Economy

Pages: 6

Words: 1650

Published: 2020/12/21

The Federal Republic of Germany is a West European country, has a surface area of 357137 square meter, a population of 82800 million capita (2012 estimate), Berlin as a capital city, euro as official currency and is a UN member since 1973 ("Germany"). Indeed, Germany has a long history of economic activity and has always had an influence on international economy since empire era. In recent history, Germany has been a major player in global political and economic history, particularly over World War I and II. If anything, Germany can be said to fuel world political and economic history by her machinery. Probably, most notable in Germany's recent political and economic history is her emergence few years after World War II as not only a major economic player but also a serious contender in global economic system. Further, slit into West and East, Germany had to face serious challenges of reunion after her first big challenge of structural reforms after World War II. This has marked, in fact, Germany's economic journey until present. In order to grasp Germany's political economic positing globally, a broad survey is needed for a fuller account. This presentation aims, accordingly, to explore Germany's political economy since World War II.
Germany has a set of characteristic features which distinguish her from major global economic powers. A parliamentary democracy, Germany's Bundestag (parliament), Government and Head of State represent Germany's main political governing bodies ("The Federal Republic of Germany"). Indeed, Germany's very political regime is unique in Western democracies. Characterized by a unionized make-up, Germany's political parties enjoy a broad union base. This is, in fact, a fundamental feature of Germany's economic structure and organization (discussed shortly) which runs across Germany's economic activities.
Decidedly a welfare state, Germany is one major West European country which invests heavily in social services, safety nets and, not least, union support. Indeed, one major problematic in Germany's liberal economy is her high-cost labor which continues to be a an increasing burden in a world which has shaken off much regulatory and union rights or, at best, loosened restrictions on employment and pay (Streeck and Trampusch). Unlike U.S. counterparts, German companies continue to support unionized labor organizations and hence incur burdens becoming increasingly unnecessary. As such, Germany remains a notable example of social democracy in which more extreme practices of open market capitalism are rationalized by public, social programs which subsidize public services unaffordable to larger bases of workers. Further, by continuing to support public, social programs, Germany differentiates herself from similar major, established democracies which have adopted more extreme forms of capitalism. The state in Germany, put differently, remains a big presence in public services catered for citizens.
As noted, Germany's present political economic makeup goes back to, at least, post-war years. Post-war Germany was nothing short of an economic miracle. Emerging from a devastating war, split and ideologized, West Germany witnessed a rapid growth in 1950's. Arguably, convergence, structural change, institutional shake-up and, not least, postwar shock, all contributed to West Germany's remarkable rise (Eichengreen and Ritschl). East Germany lagged, however, much behind and continued to adopt economic policies, radically social even by German standards, which continued to diverge from West Germany's more liberal, market-oriented economy. Meanwhile, upon unification, both Germanies suffered integration of radically different polities and economies which, studies find, are attributed to different political values and economic systems (Eichengreen and Ritschl; Wiesenthal), resulting in unprecedented job loss and low manufacturing profitability (Carlin and Soskice). Admittedly, Germany's unification is one major political economic woe she has not recovered from so far. True, current circumstances are much in economic edge than when initially unified. However, structural imbalances continue to plague both sides.
Today, Germany's biggest companies ("The Largest German Companies") enjoy eminent international presence. However, in spite of similarities, global German companies uniquely retain a not-fully decentralized organization as regards labor relations, labor cost control and differentiation of working conditions (Hassel and Rehder). Again, Germany's unionized labor quality emerges as both an asset and a liability shaping German companies overseas. Germany remains, nonetheless, a major global player. According to Economy Watch ("Germany Exports, Imports & Trade"), Germany is world's third largest exporter and importer and accounts for what is more than half of European Union's international trade. Further, Germany is part of World Trade Organization (WTO) both as an independent state and as part of European Union. Germany's exports include mainly mechanical engineering products, vehicles, and chemicals. According to 2012 estimates, Germany's overall export value amounts to USD 1.492 trillion and her imports amount to USD 1.276 trillion ("Germany Exports, Imports & Trade"). Germany's most important trade partners are European countries (58%), followed by Asian countries (17%) and America (12%), according to 2014 estimates ("Germany’s most important trading partners 2014"). Germany's major European importer is France, followed by USA and UK. Germany's major European exporter is Netherlands ("Germany’s most important trading partners 2014").
This economic behavior marks Germany as a decidedly free trade adopter as opposed to a protectionist. Indeed, Germany's Trade & Tax presentation of Germany's business climate is nothing short of an investment ecosystem in which restrictions are removed than imposed. If anything, according to Germany's Trade & Tax ("Business Climate"): "The The German legal system protects property and individual rights. Competitive tax regulations and a wide range of funding options offer a strong framework for investment." This is, in fact, a invitation incentivizing capital gains rather than protecting local business practices. Further, being an early member of WTO, Germany is subject to WTO's mandated open market and free trade objectives. Probably, one most notable feature in Germany's open investment ecosystem is her overprotection of labor and union rights, a practice which runs against dominant labor practices in major, open market economies and, as noted, still represents a burden on German companies' labor cost and benefit programs.
Notably, Germany enjoys a sterling reputation as regards Foreign Direct Investments (FDI's). According to Germany's Trade and Invest ("FDI Data"), Germany occupies seventh slot as one of world's most attractive countries to foreign investments. EU FDI's accounts for 58% of all Germany's overall FDI's; America, 24%; and Asia, 9%. Consequently, Germany enjoys a positive, international reputation for FDI's attractiveness ("FDI Reputation").
In order to integrate her national strategies into global ones, Germany adopts a detailed sustainable developmental strategy ("Sustainability"). According to Federal Government's mandate, Germany's sustainability strategy is based on four guidelines: "intergenerational equity, quality of life, social cohesion and international responsibility" ("Sustainability"). Therefore, in response to UN member states adoption of an international action program, Germany formulates her strategic development plan accordingly.
Given Germany's current global positioning, she is poised to continue her growth as a major international player. As Germany's monetary policies continue to lead eurozone and to define European monetary policies as well – by virtue of strong market positioning backed by a favorable commerce balance – Germany is projected to sustain her current growth rates and enhance her international reputation as a prominent destination of choice for investment and business.
In conclusion, Germany is a notable example of a major economy which has experienced dramatic changes over years. Having recovered from a destructive world war, West Germany showed signs of rapid growth owing to structural changes radical monetary policies as well as postwar shock effect recovery. Upon unification, East and West Germanies experienced major problems in integration which continued to plague later practices as Germany established herself as a major , international player in world economy. These problems, according to investigations, are attributed to economic and political differences. Alternatively, Germany is established, major, economic player in world economy. This is evident statistically as being world's largest importer and exporter and her range of quality exports which include mechanical engineering and chemical products. Germany is, indeed, a free trade economy which is evident in her range of incentives and facilities availed to foreign investors. By emphasizing individual properties and rights, Germany asserts herself as a proponent of open market and free trade. Uniquely, however, Germany retains her social democracy mark which is evident in her most global companies as well. By opting for social programs and adhering to welfare state creeds, Germany maintains one unique character of her political economic profile as a labor-supportive state in which union rights and freedoms are protected by law. Indeed, Germany enjoys a very unique status in world economy. Isolated from international politics, Germany has come to invest more in her economic might. By enforcing radical measures after war, West Germany managed to find a foothold again on world's economic stage. This has been further enhanced by future market expansions and skyrocketing exports. In fact, Germany is one of few countries whose export record speaks of her major contribution both to her local economy (by adopting arrangements which would make marketplace climate geared more for export) and to international economy (by differentiating chain values). Germany enjoys a strong market positioning which, given present and past records, is recommended to sustain. Although criticized for not being free or open enough, Germany's social practices in public services or in boardrooms appear to serve her well in her endeavors to strike a balance between extreme free market practices and social democracy demands. Indeed, recent trends show Germany's conventional – and established – unionized labor organizations are starting to re-organize in favor of more flexible labor organization forms. Only when balance is kept – as fair as possible – between local, social demands and international market competition can Germany draw an ideal example of a capitalist economy rationalized humanely by social services provided by state. Finally, given Germany's political conventions, Germany is projected to be a state-oriented economy whose model is hardly replicable in similar major economies.

Works Cited

Business Climate. Germany Trade & Invest. Germany Trade & Invest, n.d. Web. 16 Mar. 2015.
Carlin, Wendy,  and David Soskice. "Shocks to the System: the German Political Economy Under Stress." National Institute Economic Review 159.1. (1997): 57-76. Web. 16 Mar. 2015.
Eichengreen, Barry and Albrecht Ritschl. "Understanding West German economic growth in the 1950s." Cliometrica 3.3 (2009): 191-219. Web. 16 Mar. 2015.
FDI Data. Germany Trade & Invest. Germany Trade & Invest, n.d. Web. 16 Mar. 2015.
FDI Reputation. Germany Trade & Invest. Germany Trade & Invest, n.d. Web. 16 Mar. 2015.
Germany. UN Data. UN, n.d. Web. 16 Mar. 2015.
Germany Exports, Imports & Trade. Economy Watch. Economy Watch, n.d. Web. 16 Mar. 2015.
Germany’s most important trading partners 2014. D Statis – Statistisches Bundesamt. D Statis – Statistisches Bundesamt, n.d. Web. 16 Mar. 2015.
Hassel, Anke, and Britta Rehder. "Institutional change in the German wage bargaining system. The role of big companies." MPIfG Working Paper, Max-Planck-Institut für Gesellschaftsforschung. Web. 16 Mar. 2015.
Streeck, Wolfgang, and Christine Trampuschb. "Economic reform and the political economy of the German welfare state." German Politics 14.2 (2005): 174-195. Web. 16 Mar. 2015.
Sustainability. The Federal Government. The Federal Government, n.d. Web. 16 Mar. 2015.
The Federal Republic of Germany. Deutscher Bundestag. Deutscher Bundestag, n.d. Web. 16 Mar. 2015.
The Largest German Companies. Forbes, Forbes, n.d. Web. 16 Mar. 2015.
Wiesenthal, Helmut. "Post-unification dissatisfaction, or why are so many East Germans unhappy with the new political system?" German Politics 7.2 (1998): 1-30. Web. 16 Mar. 2015.

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