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Marcus Marktanner, American University of Beirut

Social Market Economy – A Model for Jordan? Prepared for: Joint German-Jordanian University - KAS workshop on “Economic Systems in Comparison - Free Market Economy versus Social Market Economy” Amman, Jordan, March 13-14, 2010. Marcus Marktanner, American University of Beirut.

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Marcus Marktanner, American University of Beirut

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  1. Social Market Economy – A Model for Jordan? Prepared for:Joint German-Jordanian University - KAS workshop on“Economic Systems in Comparison - Free Market Economy versus Social Market Economy” Amman, Jordan, March 13-14, 2010 Marcus Marktanner, American University of Beirut

  2. Social Market Economy – A Model for Jordan? • Outline • What is Social Market Economics? • How is Social Market Economics different? • How close is Jordan to the Social Market Economy? • What are challenges to sustaining Social Market Economics in Jordan? • Conclusions: Jordan as a role model in the Arab world

  3. Social Market Economy – A Model for Jordan? • What is Social Market Economics 1. What is the normative value system?  Efficiency with equal opportunity 2. How is the state supposed to be organized?  Subsidiarity and state-insulation from special interest groups 3. What are untouchable market fundamentals?  Ordo-liberal core 4. When is the state supposed to interfere?  Regulatory principles 5. How is the state supposed to interfere?  Supplementary principles

  4. Social Market Economy – A Model for Jordan? • What is Social Market Economics – The Ordo-Liberal Core 1. Free prices 2. Free contracts 3. Free trade 4. Private property rights 5. Price stability 6. Private liability 7. Predictability of economic policy

  5. Social Market Economy – A Model for Jordan? • What is Social Market Economics – Regulating what, how?

  6. Social Market Economy – A Model for Jordan? • What is Social Market Economics – Summary

  7. Social Market Economy – A Model for Jordan? • How is Social Market Economics different?

  8. Social Market Economy – A Model for Jordan? • How close is Jordan to the ideal of a Social Market Economy? • Actually pretty close! • Low income inequality (equal opportunities) • Openness (efficiency) • Broad tax base (capacity) • And: Jordan’s geopolitical and geo-economic environment is more difficult

  9. Social Market Economy – A Model for Jordan? • Challenges to sustaining a Social Market Economy • Food crisis • Trade deficit • Inflation • German experience: Commitment to Social Market Economy principles is challenged in bad times, not in good times.

  10. Social Market Economy – A Model for Jordan? • Conclusions • The numbers look good • The geopolitical and geoeconomic environment is more complex in Jordan • Economic reforms are still comparatively young, many institutions like anti-trust legislation still need to mature • There may be some dark clouds building up (inflation) • But overall: Thumbs up!

  11. Social Market Economy – A Model for Jordan? Thank you.

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