Weak State, Incremental Bias: Semisovereignty in Comparative and Historical Context

Occasionally a book so successfully defines the central characteristics of a political system that it comes to inform the core assumptions, basic interpretations and agenda pursued in later studies. This applies with particular force to what are seen as its distinctive biases in economic policy management. It was Peter Katzenstein's (1987) seminal achievement to offer such an account of economic policy management in West Germany. Katzenstein's narrative was born out of a very different historical, institutional and ideational context from that of other countries such as France. The post-war reconstruction of West German economic policy was haunted by memories of the economic, social and political breakdown caused by hyperinflation in the 1920s and 1940s, by memories of the misuse of economic power by large firms and cartels, and by their association with the collapse into the barbarism of the Nazi period. Against this background, ‘economic stability’, the competitive market economy and ‘social partnership’ took on a deeply symbolic as well as practical value as guarantors of post-war liberal democratic stability. They decentralised and shared economic power (notably through competition policy and through co-determination in corporate governance), and put in place an institutional framework that was designed to prevent irresponsible political management of monetary and financial policy (in particular an independent central bank).