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The Walter Eucken Institute continues the tradition of the Freiburg School of Economics in analyzing the evolution of economic, social and political institutions, and their impact on the market process, as well as processes of political decision-making.

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Lars P. FELD

Ekkehard A. KÖHLER


Ordoliberalism, Pragmatism and the Eurozone Crisis: How the German Tradition Shaped Economic Policy in Europe. 15/04/2015






Ordoliberalism originates from the so-called “Freiburg School” of the 1930s, a research programme at Freiburg University led by economist Walter Eucken ansd law scholar Franz Böhm.

Their aim was to investigate the interdependency of legal-institutional structures and economics. In his book “Grundsätze der wirstschaftspolitik” (Principles of economic Policy), Eucken distinguishes the policy-type of “Ordnungspolitik” from interventionist policy-making.

According to this ideal distinction, the government should provide a legal framework that shapes market outcomes, but should not intervene in day-to-day economic decisions.

Today, Ordnungspolitik is perceived as the conviction that “the principal means by which economic policy can seek to improve ‘the economy’is by improving the institutional framework within which economic activities take place”.

From this perspective, Ordnungspolitik is by no means a specific normative programme for economic policy; it is rather a way of addressing economic policy reform on the level of rules.

It is this particular perspective on economic policy that has a long-standing tradition among German economists. The German Council of Economic Experts provides a good example.

Established in 1963 under Ludwig Erhard, then Minister of Economic Affairs, the GCEE came to play an important role in economic debates. Despite the changing macroeconomic paradigms, Olaf Sievert, a long-time member and former chairman of the GCEE, emphasizes that the council has always focused on the microeconomic foundations of economic activity as well as on ordoliberal – rather than interventionist – policy-making.

Other prominent examples of German economists who argue in favour of Ordnungspolitik include for instance the members the Bundesbank – exemplified by their past presidents such as Hans Tietmeyer and their current president Jens Weidmann – as well as Hans-Werner Sinn, who reasoned at the height of the financial crisis that the US needed to subject their banks to a strong regulatory framework in the ordoliberal tradition.