Economic Freedom

Since not only the financial and economic crisis the country is very busy, but weak. While governments are often faced with a dilemma: on your behalf, one to make to the general public interest-oriented policy that precludes the incentive to increase their electoral chances by introducing subsidies and transfers to well-organized groups and to the detriment of the public.The best solutions for the citizens to remain in total so frequently. The consequences of a policy of granting privileges to individual groups are redistributing from one pocket to the other, weakening economic dynamics and thus losses in wealth and not least, a weakening of the state.

For politicians, it is very difficult under the existing rules to enforce generally well-oriented reforms. Because well-organized interest groups try to impose on their members special treatment. Small groups with specific interests such as pharmacists, air traffic controllers or farmers can organize it better than large groups with common interests as citizens as consumers or tax payers. In public, the special treatment of particular groups will then in turn often “sold” as conducive to the common good. The opposition to the granting of privileges is usually less marked, since the additional burden on the individual citizen is usually small and large groups can organize just barely. In addition, the well-organized special interest groups are often involved in negotiations “round table” where they can not agree on costs of the groups involved with politics on a solution “to the detriment of third parties”. In addition, reforms are also complicated by the fact that in Germany's federal system and the EU level more than a lot of “Vetopieler” there.

Once granted privileges to make very difficult to reverse. Because the disadvantages by removing privileges for these individuals are usually much more noticeable than the benefits for the community. The privileged are also usually in a well organized group that has been formed to acquire the privilege. The beneficiaries of the reform – the public – is not, however organized. A further complication is that there is often some time – sometimes years – take to the positive effects of structural reforms noticeable, while the adjustment costs are noticeable. For politicians who want to be reelected, it is therefore harmful to push for reforms, whose negative effects are felt immediately, their positive effects occur only after the legislature and thus after the next election.

In order to reduce the influence of special interests

On the policy, improved rules for political action is necessary. Credible political self-bonds can be strong rules. Because they allow politicians to protect themselves effectively against the influence of specific special interests. From the outset by certain action possibilities in the way of political will formation are excluded, the influence of special interests is reduced. The strongest bond is a form of self-enshrined in the Constitution generally. Recent example is the so-called debt brake, which obliges the federal government to return the federal government structural deficit by 2016 to 0.35 percent of GDP. Commitment of the policy can also be achieved, that the authority to take certain decisions that will be handed over to an independent institution or international organization. Thus, the transmission of monetary policy decision-making power to independent central banks has a positive impact on monetary stability. Independent institutions should be entrusted with decision-making powers, is perfectly legitimate in a democracy, if the institution in the process of political decision-making is a clear goal is set, for example, monetary stability. However, an institution to transfer discretion over the policy objectives, contradicts the basic democratic understanding.

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