The institutional foundations of the German economy explain why it has handled the economic crisis more effectively than other European states

Germany’s economy has experienced a transition from the ‘sick man of Europe’ after unification in 1990, to becoming a relative ‘winner’ during the current economic crisis. Gregory Jackson and Arndt Sorge argue that while explanations for economic performance typically focus on macroeconomic and fiscal policies, the evolution of institutions within a state can also be highly significant. The institutional changes which have occurred within Germany since the end of the 1970s go some way toward explaining why the country has managed to deal with the crisis more successfully than other states.