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How Germany shouldered the fiscal burden of the unification


  • Boss, Alfred


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).
  • Handle: RePEc:zbw:ifwkwp:851

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    intergovernmental relations; debt; social security;

    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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