Policy Article
Kann der Staat es wirklich besser? Neodirigismus am Beispiel des Lieferkettensorgfaltspflichtengesetzes
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Sustainable Development
International Trade
Globalization
European Union & Euro
Emerging Markets & Developing Countries
Companies
Germany
A new state interventionism is on the rise worldwide, which is expressed in ever greater control and regulation of entrepreneurial activity. The German Due Diligence Law, which has already been passed, and its planned European counterpart are examples of this. They illustrate how seemingly morally correct actions can lead to undesirable side effects, so that the desired positive effects in poor countries do not materialize. This is mainly due to the dirigiste approach of the law, which leads to costs that can cause a decoupling of supply chains.
This paper analyzes the German due diligence law and also discusses comparable laws in other countries as well as current consultations at the EU level. In order to better assess the degree to which the German economy is affected, the essay first shows the importance of countries with problematic working conditions as suppliers for German companies. The expected effects of the law are then discussed. In doing so, the essay investigates impacts on affected companies in Germany and Europe, the German economy as a whole and exporters in developing countries. Finally, the paper discusses alternative solutions that could play a role in the context of a European regulation.
