Social Market Economy - A Contemporary Institutional Framework
The present study highlights the need for research on and the reform of the topic of Social Market Economy (SME). Even though this socio-economic order lifted Germany onto a path of, until then, unknown prosperity after WWII, surveys show that a considerable part of Germany's population does not rally behind this concept anymore. The study uses an institution-based ap-proach to propose a contemporary framework of the SME. Relevant literature is analyzed to identify those institutions that on one hand fall in line with Walter Eucken's classic principles and, on the other hand, that have empirically proven to be prosperity enhancing, since prosperity is assumed to be one of the primary objectives of the SME. The resulting framework of institutions will most likely not serve as a blueprint when establishing an economic order, but can be used as a benchmark of a contemporary SME in theoretical and empirical analyses.
Social Market Economy; SME; Reform; Institutions