ABSTRACT
This essay addresses one type of strategy of economic reform that has proved very appealing to German political leaders. Its appeal rests on the search for a strategy for reform that reconciles mounting economic policy problems with systemic constraints on policy change. These constraints mean that direct chancellor majority action and even the ultimate threat of the use of such action lacks credibility. In this systemic context binding hands through government by commission provides a potential source of leadership power over economic reform. The essay does not explore more general (and more frequently addressed) questions about how formal institutions affect the autonomy and leadership capacity of German federal governments or about the range of formal powers available to federal chancellors and the implications of these resources. It is concerned with how leaders are induced to rely on and use mechanisms of binding hands, often unsuccessfully, to build credibility. Government by commission provides a source of power in a highly differentiated political system that offers numerous veto points on change and in an age of increasing electoral volatility in which leaders seek to increase their autonomy of action by focusing on the median voter. These two phenomena act as an incentive to opt for a strategy of binding hands. At the same time government by commission remains embedded in party political competition for electoral profile and policy influence as well as in disputes between ordo-liberals, advocates of cooperative capitalism and Keynesians about the most appropriate ways in which to bind hands. Government by commission has played a central role in the politics of economic reform under the Schröder governments (the so-called Räterepublik). By ‘process chasing’ its economic reforms it is possible reflect on the strategy of binding hands as a technique for economic policy reform and on the conditions that shape its effectiveness.
