Table 1 Dimensions characterizing the German model

Governance

Coordinated market economy, intermediate corporatism, moderate industrial policy

Social security

Bismarck type: mainly financed through wage-related contributions, relatively generous transfer system (intermediate de-commodification)

Labor relations

Social partnership through work councils, co-determination, low fluctuation (long tenures), job protection and other regulations

Labor market policy

Strong role of active labor market policy, buffering of labor market shocks through short-term working allowances and other instruments

Education

Dual system of vocational training and firm investment in general and specific in-house training

Wage formation

Collective bargaining at the intermediate (sectoral, regional) level; orientation toward aggregate productivity; collective bargaining autonomy enshrined in German Basic Constitutional Law

Wage dispersion

Low wage dispersion; egalitarian policy stance

Economic structure

Strong role of export-oriented manufacturing, diversified quality production in niches

Finance

House-bank system, “patient capital,” under-developed venture capital

Infrastructure

Efficient transport and logistics, reliable legal and administrative systems