25 Years IWH

Dr Peter Haug

Dr Peter Haug
Current Position

since 11/17

Economist in the Department of Structural Change and Productivity

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests

  • efficiency of public service provision
  • local public finance
  • local public economics
  • municipal infrastructure and demographic change
  • data protection officer

Peter Haug joined in 2002, since 2010 he is senior economist at the IWH. He is working in the Department of Structural Change and Productivity since 2017. His research focuses on local public finance, local public economics and efficiency of public service provision.

Peter Haug studied economics at the University of Passau. Then he worked as a research assistant at the Institute of Public Finance of the Helmut-Schmidt-University in Hamburg where he received his PhD in 2003. The title of his PhD thesis was "Kommunale Wirtschaftsförderung – Eine theoretische und empirische Analyse" [Local Economic Development – A Theoretical and Empirical Analysis].

Your contact

Dr Peter Haug
Dr Peter Haug
Mitglied - Department Structural Change and Productivity
Send Message +49 345 7753-709

Publications

Vertical Grants and Local Public Efficiency. The Inference-disturbing Effect of Fiscal Equalization

Ivo Bischoff Peter Bönisch Peter Haug Annette Illy

in: Public Finance Review, forthcoming

Abstract

The existing empirical literature on the impact of vertical grants on local public-sector efficiency yields mixed results. Given the fact that vertical financial equalization systems often reduce differences in fiscal capacity, we argue that empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency of public service production even when the underlying causal effect is not. We provide a simple illustrative theoretical model to show the logic of our argument and illustrate its relevance by an empirical case study for the German state of Saxony-Anhalt. We show that our main argument of an inference-disturbing effect applies to those existing studies that are more optimistic about the impact of vertical grants. Finally, we argue that it may disturb the inference drawn from studies in a number of other countries where vertical grants—intended or not—concentrate in fiscally weak municipalities.

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Gemeindegröße, Verwaltungsform und Effizienz der kommunalen Leistungserstellung – Das Beispiel Sachsen-Anhalt

Peter Haug

in: Raumforschung und Raumordnung, No. 4, 2013

Abstract

Municipality Size, Institutions and Efficiency of Municipal Service Provision: The Case of Saxony-Anhalt: In this contribution we analyze the determinants of the efficiency of municipal service production using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a robust non-parametric frontier estimation (Convex order-m).The results reveal e.g. no efficiency deficits of municipal associations and a significant impact of demographic factors and settlement structures.

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Langfristige Wirkungen des Konjunkturpakets II am Beispiel der sächsischen Kommunen

Peter Haug

in: List Forum für Wirtschafts- und Finanzpolitik, 2010

Abstract

The article discusses primarily the potential long-term (supply-side) effects of the public investments subsidized by the German „Economic Stimulus Package II“. Considering the allocative aspects, especially the productivity and financing effects of publicly provided capital as well as the factor price effects of investment grants (municipalities are „lured to the concrete“) have to be taken into account. The theoretical problems are supported empirically by the subsidy practice in Saxony and its focus on local consumer goods (sports and leisure facilities) and on not directly economy-related educational facilities (kindergartens, primary schools). From a distributive point of view no interdependence between the financial strength (or weakness) of the municipalities and the amount of their ESPII-grants received could be confirmed empirically. Finally, with respect to the economic short-term stabilization effects of the program a significant increase of the municipal investments – although with a time lag - was found for Saxony.

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Working Papers

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Does Intermunicipal Cooperation Increase Efficiency? Evidence from the Hessian Wastewater Sector

F. Blaeschke Peter Haug

in: IWH Discussion Papers, No. 11, 2014

Abstract

This paper analyzes the relationship between intermunicipal cooperation and efficiency of public service provision. The organizational arrangements, including self-provision, joint pro-vision or contracting, affect politicians’ and bureaucrats’ incentives as well as internal transaction costs. Hence, cooperation gains from scale effects have to be weighed against technical inefficiencies. We analyze wastewater disposal for a unique dataset of small and medium-sized Hessian municipalities. We employ a two-stage DEA (DEA = Data Evelopment Analysis) bootstrap approach to calculate relative efficiency measures controlling for organizational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities score lower in terms of technical efficiency than self-providing and contracting municipalities. The scope for increasing scale efficiency turns out to be limited and hence, only small municipalities may benefit from scale economies from cooperation. The findings suggest that small municipalities should rely on contracting or on joint provision with a high degree of vertical integration.

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Grant Dependence, Regulation and the Effects of Formula-based Grant Systems on German Local Governments: A Data Report for Saxony-Anhalt

Peter Haug

in: IWH Discussion Papers, No. 2, 2013

Abstract

Recent empirical studies have found – seemingly − efficiency-enhancing effects of vertical grants on local public service provision. The main purpose of this paper is to prepare an elaborate theoretical and empirical analysis of these contradictory results. Therefore, it investigates if certain fiscal and institutional conditions (fiscal stress, fiscal rank-preserving vertical grant systems, input- and output regulation), that might help to explain these empirical findings, are characteristic of at least some parts of the local government sector or certain regions. The German state of Saxony-Anhalt is chosen for case study purposes. The main results are: First, the local governments suffer from severe fiscal problems such as high grant dependency, low tax revenues and the prevalent inability to finance investments by own resources. Second, the output- and input-regulation density of certain mandatory municipal services (schools, childcare facilities, fire protection) is high. Finally, the most important vertical grant category for local governments, the formula-based grants (“Schlüsselzuweisungen”), can be described as mainly exogenous, unconditional block grants that in most cases preserve the relative fiscal position of the grant recipients.

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Vertical Grants and Local Public Efficiency

Ivo Bischoff Peter Bönisch Peter Haug Annette Illy

in: IWH Discussion Papers, No. 1, 2013

Abstract

This paper analyses the impact of vertical grants on local public sector efficiency. First, we develop a theoretical model in which the bureaucrat sets the tax price while voters choose the quantity of public services. In this model, grants reduce efficiency if voters do not misinterpret the amount of vertical grants the local bureaucrats receive. If voters suffer from fiscal illusion, i.e. overestimate the amount of grants, our model yields an ambiguous effect of grants on efficiency. Second, we use the model to launch a note of caution concerning the inference that can be drawn from the existing cross-sectional studies in this field: Taking into account vertical financial equalization systems that reduce differences in fiscal capacity, empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency even when the underlying causal effect is negative. Third, we perform an empirical analysis for the German state of Saxony-Anhalt, which has implemented such a fiscal equalization system. We find a positive relationship between grants and efficiency. Our analysis shows that a careful reassessment of existing empirical evidence with regard to this issue seems necessary.

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