Economics professors surveyed by the Ifo Institute rate Germany “worryingly poorly.” Germany performs poorly in one category in particular.
Economists have given Germany a poor rating as a location. In an international comparison, 180 economics professors surveyed by the Munich Ifo Institute only gave him a school grade of 3.4. This is “worryingly bad for the industrial nation of Germany,” said Ifo expert Niklas Potrafke. They particularly complained about bureaucracy and regulations.
“For Germany to do better as a business location, reforms are needed,” emphasized Potrafke. “This includes reducing bureaucracy and more public investment in infrastructure and digitalization. However, the debt brake should under no circumstances be weakened; rather, for example, the retirement age needs to be adjusted to life expectancy.”
More weaknesses than strengths
In nine of the 13 categories surveyed, the experts surveyed more often saw a weakness than a strength for Germany in an international comparison. 87 percent spoke of a weakness in regulation and bureaucracy, 74 percent in energy and raw materials and 67 percent in digitalization. Non-wage labor costs, taxes and infrastructure were also often viewed negatively. The wage level in Germany, however, did not play a particular role in the survey; around three quarters of the economists rated it as neutral.
At 67 percent, the political institutions in Germany were most often described as a strength. “Our still functioning democracy, combined with features such as the rule of law, economic freedom, protection of property and low corruption – is a clear location advantage for Germany – especially compared to dictatorships or autocracies,” said Potrafke. The experts surveyed also tended to see education and human capital, security and geopolitical risks as well as access to financing as Germany’s strengths.
A total of 180 professors of economics took part in the Ifo and “FAZ” economist panel from April 16th to April 23rd.
Source: Stern
