Niels Petersen and Emanuel V. Towfigh: »Politics as Markets in Germany«

The guest article »Politics as Markets in Germany« by Niels Petersen and Emanuel V. Towfigh, published on September 13, 2023, was part of the »Politics as Markets 25 Symposium« on the Election Law Blog.


Politics as Markets by Professors Samuel Issacharoff and Rick Pildes is a seminal, path-breaking piece of scholarship that resonated far beyond the American academy. As Issacharoff humorously bemoaned in his unparalleled humility, the concept went from highly controversial to popular opinion in no time, depriving its authors from the praise that is usually bestowed upon the masters between those stages. We want to take the opportunity of this brief note to make good for that omission and attend upon the authors.

To that end we want to point to one maybe less obvious reason for the national and international success of Politics as Markets: its diligent analysis of domestic and foreign courts. One foreign court plays a prominent role. Issacharoff and Pildes cite the German Federal Constitutional Court as an example how courts can police competition-inhibiting political practices. Their analysis of the German case law is sharp and accurate. Indeed, the Constitutional Court has developed effective doctrinal tools to control for the rigging of the political landscape in favor of incumbent parties and prevent a disproportionate use of public funds in a system in which parties are financed to a considerable extent by the tax payer.

Regretfully, the Court does not always make use of these tools even in situations which would arguably necessitate it. After the publication of Politics as Markets the Court has, in fact, sometimes fallen short of the standards which it was praised for. One prominent recent example of the Court’s failure to act is a case from 2015. The applicant was the Ecological Democratic Party, a party focusing on environmental issues that has never received a sufficient number of votes to be represented in parliament. It argued that the incumbent parties represented in parliament had skewed the political playing field through indirect party financing. While the Federal Constitutional Court had limited the direct financing of parties through public funds by imposing strict limits, the applicant argued that parties had greatly extended indirect party financing by other means. This concerned, in particular, the financing of support staff for parliamentarians and the funding of political party foundations. For example, the applicant showed that the budget for political support staff for parliamentarians had been increased eight-fold in inflation-adjusted real terms since 1970.

However, the Federal Constitutional Court rejected the application as inadmissible. It argued that the applicant had not made a violation of the principle of competition equality for political parties, one of the doctrinal instruments that the Court had developed to police a tilting of the political playing field, plausible. It required the applicant to show a concrete misappropriation of these funds. However, the advantage that parties gain from these funds is usually more subtle.

What explains this reluctance of the Court to engage more deeply with the issue? The most plausible explanation is a strategic one. Georg Vanberg has shown that courts are often reluctant to go against core interests of political parties if they fear political backlash. Roughly a year before the decision, on April 3, 2014, the Frankfurter Allgemeine Zeitung, one of the leading German daily newspapers, published a small note. The journalist reported from a meeting of the German Federal Minister of the Interior with a few selected public law professors at an Italian restaurant in Berlin. The topic of the discussion: the reform of the Federal Constitutional Court. In the years that have passed since this meeting, no serious proposals for a reform of the Court have emerged. Nor has the topic been openly discussed in political circles. Instead, the very purpose of the meeting may well have been to leak the information about it to the press—the German variant of the ‘court-packing plan’ game. The decision regarding the Ecological Democratic Party may not have been the ‘switch in time’ witnessed as a constitutional moment in US legal history, but it certainly hints at the fact that the Constitutional Court had registered the signal.

Niels Petersen and Emanuel V. Towfigh