National and Regional Patterns of Convergence and Divergence
Edited by John Adams and Francesco Pigliaru
Chapter 13: Will East Germany become a new Mezzogiorno?
Page 323 13. Will East Germany become a new Mezzogiorno?* Andrea Boltho, Wendy Carlin and Pasquale Scaramozzino1 INTRODUCTION In both popular and academic discussion, the regional economic problems that Germany has encountered since monetary unification in 1990 have often been compared to the North–South problem which Italy has been facing since the monetary unification of 1862. In particular, a number of writers have argued that the process of income convergence between East and West Germany could last an inordinately long time and be very costly, thus resembling the very slow, or possibly absent, convergence between Southern and Northern Italy over the last 130 years (Barro and SalaiMartin, 1991; Siebert, 1991; Hughes Hallett and Ma, 1993; Blien, 1994). That a comparison between the two countries’ regional experiences may be warranted is suggested by Table 13.1 which presents early 1990s information on selected economic indicators for the two areas. Both Eastern Germany and Southern Italy show significant gaps visàvis the rest of the country in GDP per capita and unemployment levels, though less so in wage levels. Both areas, if in different proportions, also rely very heavily on a net transfer of resources from the central government. Such transfers ensure that consumption standards are relatively uniform across space, but, by the same token, they contribute to, and may even perpetuate, a model of regional dependence. Traditionally, this has been seen as one in which the weak region runs a persistent trade deficit with the rest of the country...
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