To this day, the western German federal states exhibit persistent differences in their standard of living and productivity. The study investigates whether there was a convergence of income and productivity levels among the western German federal states from 1950 to 1990. Furthermore, it explores which factors determine the observed convergence and divergence. Based on growth theory and new institutional economics, determinants of productivity are identified, and their influence on the productivity of the federal states is determined using regression analysis. The study highlights that education and innovation capacity are the crucial factors for long-term productivity growth.