Shrinking Cities In Eastern Germany

The development of cities in the German Democratic Republic unfolded under the terms of a socialist society:

  • state-owned assets
  • centralized urban planning and city government

In this sense the structure of utilization did not arise from interests of private owners or economic players, but from comprehensive societal objectives and requirements.

Key elements of these objective and requirements were “Housing solutions as a societal problem” thereby following the ideal of social reforming, stating, that the supply of wide parts of the population with housing should contradict social segregation.

Concerning the structure of the cities, other ideals were being pursued such as the compact city.

The compact city

The principles behind the compact city were first cited in 1973 by George Dantzig and Thomas L. Saaty. Derived from this concept the GDR tried to circumvent splinter development and thereby suburbanisation through planned housing development.

City expansion was only to be realised in forms of industrial city expansion.

The Economy of the GDR

The GDR had a rich faculty of military and paramilitary organizations:

  • National People’s Army
  • Border guards
  • Sowjetarmee
  • Staatssicherheit

Many jobs were dependent of the military sector or at least closely related.

In all, there were four enormous economical branches the labor market was bound to.

  • Military
  • Industry
  • Agriculture
  • Administration

The precarious situation of monoculture as an economic specialization was enforced by the GDR administration.

The End of the Division

At the end of the division four processes played a mayor role in the diminution of the job market and thereby in the migration from eastern Germany to western Germany.

  • Deindustrialization
  • Decollectivization
  • Demilitarization
  • Deadministration

These processes resulted, as before mentioned, in structural interruptions in the new Länder. Although the process of deindustrialazation also showed some effect on the old Länder, there is a qualitative and a quantitative difference between western Germany and eastern Germany.

  • Qualitative, since eastern Germany has suffered a structural interruption rather than a structural change.
  • Quantitative, because these factors have been becoming a problem for all cities in eastern Germany, excluding Berlin.


The collapse of the eastern Germany industry – the deindustrialization – had had significant consequence on the economic basis of eastern German cities.

70% of all jobs in the industry were lost after the end of the division.

Dwindling employment through:

  • Eruptive market opening
  • Foreign exchange rates that were much higher than the purchasing power parity
  • Approximation of wages and salaries to a western German standard


Agriculture was, for many rural cities, the most important economic basis. The agricultural sector showed, for September 30th, 1985 over 850.000 employments.

This doubles the numbers of western Germany, although western Germany was bigger in area and population.

As for all other sectors, the approximation to western standards was fairly difficult to achieve. Hence the employment plummeted to a low of 20% in the agricultural sector.

This was in fact, the biggest loss of employment of all economic sector of the GDR.


The “bewaffneten Organe”(armed entities) of the GDR, the National People’s Army, the Grenztruppen, the Staatssicherheit, as well as other paramilitary organization had an important impact on the economic basis of many regions and cities.

They provided jobs for military and civilians and in addition for the connected service sector.

The consequence of the closing and centralization of Bundeswehr facilities during the “strategischen Neuausrichtung der Streitkräfte” continued the decrease of employment after the end of the division.


The Deadministration symbolizes the downsizing of administrative structures and institutions of the GDR.

Along with cut backs in employment, the deadministration also lead to a loss of status for man “Bezirks- and Kreisstädte”.


The consequence of the structural interruptions of eastern Germany were:

  • structural change in economy
  • demographic change
  • increasing apartment vacancies
  • under-utilization of techniocal and social infrastructure and herewith a rise in cost

The central problem was not formed around the transformation of the economy it was, that the economy eroded altogether.

As a result, unemployment rose and the economy stagnated, up until today. Since 1991 the unemployment rate rose steadily in eastern Germany. From 1997 to today it lay by 18% to 19%:

In consequence the economically active population is at a low of 12,1%. The socioeconomic profile of eastern German cities is characterized by high social benefits and low tax income. The old Länder are largely dependent on transfer payment from the new Länder.

Another dramatic problem is the decline in population in combination with aging.

This is the consequence of the migration of young and qualified parts of the population.