Why Is There No Household Debt in Germany…or Is There? Policy Regimes and the Institutional Analysis of Credit
This paper sets out to explain this puzzling debt trajectory by applying a regime-approach rooted in comparative capitalism. Building both on régulationist and VoC accounts of capitalist development, the paper develops an institutionalist framework that allows investigating the politico-economic dynamics that shape households’ credit relations in five foundational spheres: (1) the financial system and banking; (2) monetary and economic policy-making; (3) the labor market; (4) the welfare state; and (5) the housing market. By applying this framework to the German case it becomes clear that liberalization trends fostering the expansion of credit to households have not been absent but were very much entrenched in the institutional trajectory of the export-and-savings-oriented growth model. Critical junctures in debt growth, however, are also associated with far-reaching political moments, here in specifically German reunification and the completion of the European Monetary Union. Therefore, the paper emphasizes the importance of an institutional analysis of credit that is both context-specific and enables a comparative investigation of financialization processes among households.