Autoren: Bradley, J., Morgenroth, E., Untiedt, G.

ifo Dresden studien 30
ISBN: 3-88512-392-4
ISSN: 0946-7920

The hardly expected German reunification produced a national euphoria which impeded a rational approach to the complexity of the unification process. This explains to a large extent the disappointment when, later on, the high expectations and ambitious targets were not fully met. And this explains the criticism as well which arises from time to time in the public discourse with respect to the size of the financial resource transfers together with the scope and the duration of support policies. Furthermore, the effectivity and effectiveness of public interventions and funds to support cohesion between East and West Germany after unification has not a very highly ranked priority. This leads to a lack of policy transparency and assessment which may further nourish conflicts in society. Faced with this constellation in the mid-nineties, the Ifo Research Network Structural Change and Support Policy in Dresden , together with its national and international partners ventured to research the effects of different support frameworks and programmes.

This study comprises a comprehensive description of the macro-economic impact model of the Common Support Framework (CSF), i.e. the European Structural Funds allocated in East Germany (objective -1 region) . Its main characteristics are as follows: (i) the conception is not short-term but longer-term oriented, (ii) the structure allows for the analysis of both demand and supply effects of state interventions, (iii) the impact can be specified according to the three following areas of interventions of the European Structural Funds: human resources, infrastructure and private business Investment, (iv) the East German economy is subdivided into the four sectors: industry, services, public sector, agriculture. Such a macroeconomic model incorporating the aforementioned characteristics constitutes an innovative instrument for the analysis of the East German economy and its structural changes. Due to its conception, it is specifically well-suited to assess the impact of alternative scenarios of support policies in quantitative terms. Moreover, (physical) infrastructure can be measured in its functional macroeconomic contexts. In addition to the conception and structure of the model, the study also presents empirical findings which result from the application of the model. These quantify the effects of the interventions supported by the European Structural Funds in East Germany . This applies to the programme periods from 1994 to 1999 and from 2000 to 2006. The results provide evidence that the European Structural Funds together with German national Financial resources are an important instrument for fostering economic growth and have significantly contributed to support the transformation process in East Germany . Furthermore, they show the extent to which the impact an economic development would be effected in case the Common Support Framework is not continued.

Finally, this study deals with basic issues of European cohesion as well as strategic conceptions with respect to reform processes. In this connection, it provides ciarifications to the controversial debate an support policies in Germany .