Republic of Germany's regional policy was characterized primarily by capital subsidies. Granting subsidies was intended as an impetus for job-generating investments within the promotion areas. Above all, impetus was intended for industrial settlements in these regions. Today, the effort to recruit new companies has failed. Even the increasing subsidy race among the communities cannot change this fact. Failures of this kind must be recognized, and changes such as those mentioned above must be implemented. Financial support is granted based on outdated statements of firms. Decentralizing regional government promotion policies means turning away from exaggerated subsidies and considering more significant site factors such as availability of specialized labor and business spaces. The measures chosen should provide support for local enterprises and act as self-help guides for the decision making and growth of firms at the regional level.
Professor Joseph Weiss has significantly revised and condensed this essay from a previous, more technically oriented draft, with the authors' approval.