ABSTRACT
During the past decade, much has been written about East Europe’s bumpy road to the market economy and the new regional disparities that have emerged as a result of structural adaptation. For East Germany, the passage to a post-Fordist economy and a new globalism has been described as being fairly intricate. In spite of massive transfers of capital, know-how and political institutions from West Germany, the performance of most East German urban regions within regional competition has been rather modest. In most regions, low economic dynamism prevails due to deindustrialization, the heritage of old industrial monostructures, disembedded new industrial structures, the slow establishment of new services and a low level of attractiveness for transnational investors. Only a few urban centres such as Dresden or Leipzig have been able to function as new, albeit fragile and vulnerable, centres of economic growth. The majority of urban regions have experienced depression and further decline. Recently, demographic change and the continued outmigration of educated workforce (a classic case of brain-drain) to West and South Germany have contributed to a weakening of local human capital in East Germany’s peripheries while emptying urban cores of inhabitants and a qualified workforce. In many regions, the heightened risk of further economic destabilization and a decreasing quality of life contribute to self-perpetuating spirals of decline.
