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How Germany shouldered the fiscal burden of the unification

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  • Boss, Alfred

Abstract

In the process of the German unification and especially after the formal unification in October 1990, Eastern Germany was supported by West Germany by a lot of measures. The main purposes were to improve the infrastructure, to stimulate private investment and to alleviate the adjustment process for the population by transfers to private households. The paper describes the measures in some detail. Many of these were decided upon in an ad hoc manner, in some cases experience (partly from the period of reconstruction in West Germany after World War II) was available. The methods of financing are described, too. Emphasis is laid on the policy in the field of social insurance. Finally, it is tried to draw some conclusions which might be helpful in case of a unification of South and North Korea.

Suggested Citation

  • Boss, Alfred, 1998. "How Germany shouldered the fiscal burden of the unification," Kiel Working Papers 851, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:851
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    References listed on IDEAS

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    1. Klodt, Henning & Paqué, Karl-Heinz, 1993. "Am Tiefpunkt der Transformationskrise: Industrie- und lohnpolitische Weichenstellungen in den jungen Bundesländern," Kiel Discussion Papers 213, Kiel Institute for the World Economy (IfW Kiel).
    2. Sinn, Hans-Werner, 1997. "Deutschland im Steuerwettbewerb," Munich Reprints in Economics 19833, University of Munich, Department of Economics.
    3. Boss, Alfred & Döpke, Jörg & Fischer, Malte & Langfeldt, Enno & Schatz, Klaus-Werner & Scheide, Joachim, 1997. "Bundesrepublik Deutschland: Exportboom treibt Konjunktur," Open Access Publications from Kiel Institute for the World Economy 1727, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. von Hagen, Jurgen & Strauch, Rolf, 2000. "East Germany: Transition With Unification - Experiments and Experiences," CEPR Discussion Papers 2386, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    intergovernmental relations; debt; social security;
    All these keywords.

    JEL classification:

    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

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