Policy Article

The Economic Gap between Northern and Southern Germany (in German)

Kieler Beiträge zur Wirtschaftspolitik, 20

The analysis shows that differences between the Northern German states of Bremen, Hamburg, Mecklenburg-Western Pomerania, Lower Saxony and Schleswig-Holstein on the one hand and the Southern German states of Baden-Württemberg and Bavaria on the other hand cannot be presented as a general South-North divide in economic development. Due to different economic structures, there is also a prosperity and development gap in the North itself. In general, the highly industrialized South benefited more than the North from the dynamism of the manufacturing sector, which showed the highest growth rates in comparison with other economic sectors. The statistical analysis and various state rankings suggest that politicians, especially in the poorer Northern German states, should make greater efforts to maintain and develop industrial cores with well-paid jobs in production and business-related services. Through improved infrastructure and rapid, unbureaucratic decision-making processes, policymakers could contribute to overcoming structural weaknesses.