Germany's Social Market Economy: A Blueprint for Latin American Countries?
31 Pages Posted: 22 Aug 2015 Last revised: 3 Sep 2015
Date Written: August 20, 2015
Whereas the debate about capitalism vs. socialism seems to have come to an end, the current discussion is more about which kind of market economy ensures a positive economic and social development in a country. The ongoing economic and financial crisis fueled this discussion about successful economic systems, especially in Europe.
In the light of the above discussion two different kinds of liberal institutional concepts have regained attention. Modern institutional concepts on the one hand focus primarily on the workability of competition based market economies. Particularly economic freedom, measured in different areas, plays an important role in these liberal market concepts.
On the other hand also an old institutional concept has regained attention. It is the German ordoliberal social market concept which – presumably – helped Germany (and also Austria) to cope with the current crisis in an effective and humane way.
Facing two different liberal institutional concepts two questions arise: Firstly, what are the differences and similarities of the two concepts? Secondly, can the ordoliberal social market economy concept become an alternative to the prevailing liberal market economy concepts put forward by international organizations like the OECD? Can it become a blueprint for Latin American countries looking for reform options to improve the economic situation of their citizens?
To answer these questions, institutional footprints of Germany and the United States are compared to those of Argentina, Brazil, Chile, Mexico, Turkey and Venezuela.
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