This dissertation project consists of three related components on the impact of legal and political events on the West German steel industry. Part 1 studies the anticipated profitability changes due to protectionist policies enacted after 1974 on behalf of the Western European steel industry. The study focusses on German steel producers and is based on a stock market event study. Part 2 is devoted to the study of electoral competition and its effects on German federal steel policy after 1974. The analysis is based on a rational choice model which includes post-election institutional rivalry as a novel component. Part 3 focusses on the distorting effects of political precommitments to supply protectionist policy measures on the investment and output behavior of steel producers. Based on a theoretical model, the study analyzes the role of the Treaty of Paris (1951) as a determinant for the long-term development of European Steel after 1974. The results of this research are theoretically and methodologically important in the areas of economics, political science, and law and social science. Also, its policy implications are provocative. The United States is surrounded by countries in which governments take a much more active role in the regulation of economic change. In Western Europe, industrial policy has become an essential instrument for securing a long-term growth and employment base. The EC authorities and national governments guided and regulated the structural adjustment of the EC steel industry and, today unlike the U.S., European steel producers are again competitive on the world market. Also, as the nations in Western Europe move closer to a "United Europe," it is more important than ever for the U.S. to learn more about how the European market place is interconnected with political institutions on the various levels of the political hierarchy to be able to take advantage of the newly developing economic opportunities.
