According to a study, the federal governments since the year 2000 have invested significantly more budget funds in social spending and financial aid over the past two decades than in infrastructure and education.
The dominant item since 2000 has been social spending with a share of between 35 and sometimes more than 40 percent, according to the study published on Wednesday by the Kiel Institute for the World Economy (IfW).
On the other hand, in the past year or so, less than a quarter of all budget funds have been earmarked for directly productive purposes, now or in the future.
There has been a sharp increase in subsidies in the form of financial aid.
"The state has an obligation to its population to use its scarce resources in such a way that prosperity is maintained or increased and counterproductive effects from public spending are avoided," said IfW subsidy expert Claus-Friedrich Laase.
"Our analysis shows that the investments in education and research required for a high standard of living only play a very subordinate role in Germany's budgetary policy." Expenditure on infrastructure, which is important for the location, would also be comparatively low - "which is reflected in their sometimes worrying condition is clearly reflected”.
More funds for education and research, infrastructure and for state bodies and administration are appropriate.
"Germany must build on its strengths"
The industrialized nations organization OECD also recommended more investments this week, for example in digital infrastructure.
According to the country report, this is the only way to defend the leading position in traditional core sectors such as the automotive industry, mechanical engineering and the chemical and pharmaceutical industries.
"Germany must build on its strengths and develop a more agile, risk-tolerant and experimental innovation policy that encourages risk-taking and enables the country to lead in the digitized and green industries of the future," said OECD Secretary-General Mathias Cormann.
According to the expenditure monitor published by the Kiel researchers, the redistribution expenditure last year (planned budget) totaled 269.5 billion euros.
That corresponds to 57.5 percent of all expenditure.
Of this, 173.1 billion euros or 36.9 percent was accounted for by social spending.
87.2 billion or 18.6 percent flowed as subsidies in the form of financial aid.
Federal spending with production effects in the current period therefore totals 76.2 billion euros (16.3 percent).
Of this, 41.6 billion are earmarked for external and internal security (defense and police).
18.8 billion euros flow into the infrastructure, of which, for example, 11.3 billion in federal trunk roads and 1.4 billion in digitization projects of the federal government such as a modern administration.
Federal expenditures with production effects for the future - these are essentially funds for basic research and education - were estimated at 30.2 billion euros in 2021, which corresponds to a share of 6.4 percent.