Corporate governance reform and the German party paradox

Why do German Social Democrats opt for more corporate governance liberalization than the Christian Democrats, although in terms of the distributional outcomes of such reforms the situation should be reversed? This empirical puzzle seems to contradict insights from comparative political economy and the varieties of capitalism approach, in particular. Social Democrats and trade unions adopted their liberal attitude to company regulation after World War II. In the 1970s competition policy was introduced to make Keynesian macroeconomic policy work. Since the 1990s labor favored shareholder-oriented reforms because they helped employee representatives in conflicts over managerial control. The analysis has implications for partisan theory, institutional complementarity, and conflict models in comparative political economy.