Vol. 19 · No. 3 · Issue 60 · Fall 2001 · pp. 1-33 (33)

Experimentalism as a Tool of Economic Innovation in Germany

Wade Jacoby and Martin Behrens

Download full article (140 KB) [subscribers only]

Abstract

Uns geht es schlecht aber auf einem sehr hohen Niveau.
— Otto Graf Lambsdorff

Our purpose in this article is to analyze changes in the German wage bargaining system, a system that has attracted enormous attention from scholars of comparative political economy and comparative industrial relations. We argue that the wage bargaining portion of the German model is neither frozen in place, headed for deregulation, nor merely "muddling through." Rather, we see the institutional capacities of the key actors—especially the unions and employer associations—making possible a process we term "experimentalism." In briefest form, experimentalism allows organizations that combine decentralized information-gathering abilities with centralized decision-making capacity to probe for new possibilities, which, once found, can be quickly diffused throughout the organization. We will show that the capacity for such experimentalism varies across actors and sectors. And, to make things even tougher, neither major German social actor can sustain innovation in the longer term without bringing along the other "social partner."