Ludwig Erhard ifo Center for Social Market Economy and Institutional Economics

Friedrich-Alexander-Universität Erlangen-Nürnberg
Schloßplatz 4, 91054 Erlangen

Ludwig Erhard Zentrum
Ludwig-Erhard-Straße 6, 90762 Fürth

Stiftung Ludwig-Erhard-Haus
Friedrichstraße 4, 90762 Fürth

Friede Springer Stiftung
Pacelliallee 55, 14195 Berlin

At the heart of our research lies the question of how the social market economy can remain effective in a rapidly changing economic and social landscape. 

Regulation, Taxes and Subsidies

The institutional framework forms a central pillar of the social market economy. It defines the “rules of the game” by which economic actors make their decisions. The Center investigates how government framework conditions – such as taxes, subsidies, and regulations – shape economic behavior. The focus lies both on the intended steering effects and on unintended side effects, such as excessive complexity, ineffective incentive uptake, or incentives for tax avoidance and evasion. What obstacles hinder the take-up of public benefits? How can rule compliance be ensured? What effects does the tax and transfer system have on behavior, efficiency, and inequality?

Understanding and Acceptance of Economic Mechanisms

The founding fathers of the social market economy emphasized that any economic order depends on societal acceptance. Yet in an increasingly complex and polarized world, this acceptance is coming under growing pressure, and important reforms are often delayed or remain purely symbolic. What do individuals know about economic mechanisms? How do they respond to information about them, and what shapes their understanding and acceptance of economic policy measures?

Labor Market and Social Policy

A central challenge of the social market economy is to combine economic performance with social protection. Labor market and social policy institutions play a decisive role in shaping individual work incentives, employment decisions, and opportunities for participation. The Center analyzes how instruments such as the citizen’s benefit – Germany’s reformed basic income scheme (Bürgergeld) – along with pension rules and family policy measures, influence individual behavior. How should basic income support systems be designed to maximize positive effects on employment? What are the effects of digitalization and demographic change on the labor market – both for employers and for workers?

Prof. Dr. Markus Nagler, Friedrich Alexander University

Prof. Dr. Silke Übelmesser, Universität Jena

Jun.-Prof. Dr. Sebastian Blesse, Universität Leipzig

Prof. Dr. Lisa Windsteiger, Paris Lodron Universität Salzburg