CBS research on German reunification informs debate on Ireland's economic future
Research by Copenhagen Business School economist Battista Severgnini is contributing to the debate on the potential reunification of Ireland. The study, which examines the long-term economic consequences of German reunification, has been highlighted in a recent BBC article and cited in a new economic report.
What can Germany's experience of reunification tell us about the economic challenges of bringing two economies together?
This question has gained renewed relevance following the publication of a report examining the potential costs and economic implications of a united Ireland.
The report, prepared by economist Stephen Kinsella for the Irish political party Fine Gael, draws on research conducted by Battista Severgnini, Associate Professor at Copenhagen Business School, and Michael Burda.
Their study, Total Factor Productivity Convergence in German States since Reunification: Evidence and Explanations, published in the Journal of Comparative Economics in 2018, investigates how productivity developed in East and West Germany following reunification in 1990.
Lessons from German reunification
German reunification offers an important historical example of the economic challenges involved in integrating regions with different levels of productivity and economic development.
The research by Burda and Severgnini found that, although East Germany initially experienced economic growth and began catching up with the West, this process slowed considerably, leaving persistent productivity differences between the two regions.
These findings are particularly relevant to the current discussion about Irish reunification, where differences in economic performance between Northern Ireland and the Republic of Ireland raise questions about the potential costs and long-term economic consequences of integration.
In his new report, Kinsella draws on the researchers' findings and extends their analysis using more recent data. The updated figures suggest that productivity convergence in Germany resumed after a prolonged period of stagnation, although substantial differences remain.
““Economic convergence is a fundamental question for any country, as it determines whether poorer regions can overcome their historical disadvantages and catch up with richer ones. The German experience shows that this process is not automatic and can take much longer than expected. This can provide an important lesson when considering the potential economic consequences of Irish reunification.” ” Battista Severgnini
From academic research to public debate
The findings have also featured in recent BBC coverage of the economic challenges associated with Irish reunification.
The BBC article discusses Kinsella's assessment and highlights the work of Burda and Severgnini as an influential contribution to understanding the long-term economic effects of reunification.
While the circumstances of Germany and Ireland differ considerably, the German experience provides valuable insights into how economic integration unfolds over time, and why closing productivity gaps can be a lengthy and complex process.
The renewed attention to the study illustrates how economic research can contribute to public debate and policy discussions long after its original publication.
