Depressing dependence? Transfers and economic growth in the German states, 1975-2005

摘要

Depressing dependence? Transfers and economic growth in the German states, 1975-2005. Regional Studies. Most countries pay substantial intergovernmental transfers to poor regions with the aim of achieving regional convergence. Consequently, transfers should have a positive effect on economic growth. However, it is equally possible that transfers perpetuate underdevelopment. This paper studies empirically the effect of intergovernmental transfers on economic growth with a panel of West German states over the period 1975-2005. The findings suggest that transfers do not foster economic growth, presumably because the recipients use them to subsidize declining industries.