Reduction in bureaucracy required
Ifo: Bureaucracy costs 146 billion in economic output
Documentation requirements, statistical reports and ever new requirements are putting a strain on the German economy. Sweden and Denmark are doing better, say economic researchers.
According to calculations by the Ifo Institute, excessive bureaucracy costs Germany 146 billion euros in economic output every year. A reform is urgently needed: “The costs of doing nothing are huge, measured against the growth potential that lies dormant in reducing bureaucracy,” says Professor Oliver Falck, head of the Ifo Center for Industrial Economics and New Technologies.
The economic researchers had followed the economic development of states that had implemented far-reaching bureaucratic reforms. Conclusion: With a low level of bureaucracy like in Sweden, economic output in Germany could be 146 billion euros higher per year.
The digitalization of public administration also reduces bureaucratic effort. “If Germany were to catch up with Denmark in the digitalization of public administration, economic output would be 96 billion euros higher per year,” says Falck.
The IHK commissioned the Ifo study for Munich and Upper Bavaria. “Bureaucracy has been cited as the biggest problem in the economy in all IHK surveys for two years. The smaller the company, the more serious the burden is,” says IHK Managing Director Manfred Gößl. Evidence and reporting obligations, statistical reports, “all constant changes to the law, data protection requirements and lengthy administrative procedures must be examined” and must be streamlined or abolished.
dpa
Source: Stern
