Regional policy in the Federal Republic of Germany

Since the 1950s, regional policy in the Federal Republic of Germany has switched emphasis from assistance to specific locations with development problems to a systematic programme of development aid. Within the Common Task ‘Improvement of Regional Economic Structure’, which is undertaken jointly by the Federal and Laender governments, areas embracing 62% of the Federal Republic's total area have received aid for establishing new industries, expansion of existing manufacturing industry and rationalisation, and for developing tourism. Overall economic deterioration since the mid-'70s has been accompanied by increasing criticism of the inefficiency of this kind of regional policy directed towards the mobilisation of capital. More recent appraisals of methods improving development aid are aimed at achieving spatial concentration of the development areas, more selective aid for new establishments or expansion schemes which have sound future prospects, and increased encouragement to existing firms to innovate.