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Unformatted text preview: the Constitutional Court. As a general
rule however—since the devastating war had left all German regions equally poor and deprived of economic
resources—balanced regional development and uniformity of living conditions throughout the nation became attractive
features for policy making and institution building. These principles were not only incorporated in the new federal
constitution, the Grundgesetz (GG); they became so entrenched in peoples minds and penetrated all domains of
collective decision making—including non-government decisions such as collective bargaining—that they would survive
even the quandary of unification in 1990. Indeed, German unification—with the formerly sot East representing
roughly 20 percent of the population, but only less than 6 percent of total value added—was, and still is, a major
challenge for the German political system and its economy. 37 Commission on Fiscal Imbalance This brief historic overview may help to understand some key elements of the German national character and
institutions: the desire to regroup the nation in line with language and cultural heritage ; the readiness to share the fruits
of national economic development and growth on an even footing (interpersonal, sectoral, and regional solidarity); the
joint representation of state governments in the second chamber of the federal parliament (the Bundesrat); the
acceptance of uniform standards and harmonized taxes throughout the nation including a homogeneity of policies at
lower tiers of government. Therefore, in an ultimate sense, the philosophy of the German brand of federalism is highly
symmetrical as to potential outcomes. It may, however, imply vast asymmetries in the functioning of institutions and the
workings of political and bureaucratic procedures.
In order to achieve the uniformity of living conditions and homogeneity of policies, for instance, there must be uniform—
typically centralized2—guiding principles for the whole nation. This by itself introduces a new type of asymmetry at the
vertical level. While other federations such as the United States or Canada accept concurring sovereignties at various
levels, with full taxing and expenditure powers for each tier, the German model of federalism can be characterized as
asymmetrical power sharing. In this different paradigm, the federation (apart from its exclusive competencies such as
foreign affairs and defense) sets out a general framework for policy making for all Länder (and eventually municipalities),
while the latter implement and administer such policies within these general setting. The historic roots of this form of
power sharing can also be found in the German Reich where the states (and municipalities) had already had a long
tradition of administration that the center could build upon, while the Reich itself had no comparable infrastructure on its
own (except for its exclusive responsibilities such as defense).
Moreover, history explains the fact that the modern German states exert their sovereignty only conjointly at the national
level—through the Bundesrat, the states’ house, which consists of representatives of governments, not elected officials...
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