Municipality Size and Efficiency of Local Public Services: Does Size Matter?
Peter Bönisch, Peter Haug, Annette Illy, L. Schreier
IWH Discussion Papers,
No. 18,
2011
published in: FinanzArchiv
Abstract
Similarly to western Germany in the 1960s and 1970s, the eastern part of Germany has experienced a still ongoing process of numerous amalgamations among counties, towns and municipalities since the mid-1990s. The evidence in the economic literature is mixed with regard to the claimed expenditure reductions and efficiency gains from municipal mergers. We therefore analyze the global efficiency of the municipalities in Saxony-Anhalt, for the first time in this context, using a double-bootstrap procedure combining DEA and truncated regression. This allows including environmental variables to control for exogenous determinants of municipal efficiency. Our focus thereby is on institutional and fiscal variables. Moreover, the scale efficiency is estimated to find out whether large units are necessary to benefit from scale economies. In contrast to previous studies, we chose the aggregate budget of municipal associations (“Verwaltungsgemeinschaften”) as the object of our analysis since important competences of the member municipalities are settled on a joint administrative level. Furthermore, we use a data set that has been carefully adjusted for bookkeeping items and transfers within the communal level. On the “eve” of a mayor municipal reform the majority of the municipalities were found to have an approximately scale-efficient size and centralized organizational forms (“Einheitsgemeinden”) showed no efficiency advantage over municipal associations.
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21 years old and a little bit more realistic?
Udo Ludwig
Deutschland Archiv – Zeitschrift für das vereinigte Deutschland,
2011
Abstract
East Germany`s development in the market economy shows ambiguous results. Although the re-structured economy proved itself to be growth orientated, the sustainable growth lead over the West German economy was attained only in the first half of the 1990s. Later on the catching up became smaller and smaller. Moreover employment recovered for the first time in the last upsw-ing before the global economic and financial crisis after the tremendous losses of jobs in the transitional period. Last but not least, as a result of low birth rates and emigration the shrinking number of inhabitants in East Germany could not be stopped. In the final analysis, long lasting repercussions of the inherited structures from GDR times are responsible for the backwardness of this region as well as the way of the economic transition in East Germany and regional differences in the settlements. Against this background the accomplishment of equal living standards in the eastern and western part of Germany should not be assessed in the light of medium per capita measures, but specified by comparisons between commensurable regions.
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Konjunktur aktuell: Schulden- und Vertrauenskrise bringt Rezessionsgefahr nach Deutschland
Wirtschaft im Wandel,
No. 9,
2011
Abstract
Drei Jahre nach dem Beginn der schwersten Rezession der Nachkriegsgeschichte steht die Wirtschaft des Euroraums vor einer erneuten Rezession; die Konjunktur in Deutschland gerät aller Wahrscheinlichkeit nach in eine Phase der Stagnation. Nach der hier vorgelegten Prognose wird die gesamtwirtschaftliche Produktion in Deutschland in beiden Quartalen des Winterhalbjahres 2011/2012 leicht sinken; die technische Bedingung für eine Rezession wäre damit auch hier erfüllt.
Eine langsamere Gangart der Konjunktur ab dem zweiten Halbjahr 2011 war schon im Frühjahr weithin erwartet worden. In den vergangenen Wochen hat die Abschwächung jedoch eine neue Qualität bekommen. Die Aktienkurse sind rund um den Globus massiv eingebrochen und zeigen deutlich erhöhte Schwankungen. Gleichzeitig haben sich die Vertrauensindikatoren weltweit stark verschlechtert, zuletzt insbesondere auch in Deutschland. Der Vertrauensverlust setzte ein, während in den USA um die Ausweitung der Obergrenze für Bundesschulden und in der Europäischen Union um ein neues Hilfspaket für Griechenland sowie eine Reform des Rettungsfonds gerungen wurde. Die Ende Juli ausgehandelten Kompromisse wurden weder diesseits noch jenseits des Atlantiks als Befreiungsschläge aus den fiskalpolitischen Krisen aufgefasst und konnten deshalb die Stimmungseinbrüche nicht aufhalten. Stattdessen hat sich die Situation im Euroraum in den vergangenen Wochen weiter zugespitzt, weil an den Finanzmärkten Zweifel an der Zahlungsfähigkeit der großen Schuldenländer Spanien und vor allem Italien größer geworden sind. Zwar konnte die Europäische Zentralbank eine deutliche Erhöhung der Risikoaufschläge italienischer und spanischer Staatsanleihen durch eine Ausweitung ihres Ankaufprogramms verhindern, eine langfristige Lösung für die Schuldenpro¬blematik ist dies jedoch nicht.
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Auswirkungen der aus dem Konjunkturpaket II für das Zentrale Innovationsprogramm Mittelstand (ZIM) bereitgestellten Mittel auf die konjunkturelle Entwicklung. Gutachten im Auftrag des Bundesministerium für Wirtschaft und Technologie (BMWi)
Jutta Günther, Udo Ludwig, Hans-Ulrich Brautzsch, Brigitte Loose, Nicole Nulsch
One-off Publications,
2011
Abstract
The ZIM program (Zentrales Innovationsprogramm Mittelstand) is a technologically open program of the Federal Ministry of Economics and Technology to support small and medium enterprises and Science organizations in their research and innovation activities. It became operative July 1, 2008 and offers three program lines: individual projects, cooperative projects, and networks. In reaction to the global economic crisis the ZIM program was increased for the years 2009 and 2010 – in addition to the regulary scheduled 626 Million – by 900 Million Euro through the Konjunkturpaket II (KP II).
In this study, the analysis of the macroeconomic effects of the ZIM program in Germany has been carried out – first time in the evaluation of federal support programs for research and innovation – by the use of the input output method.
The pdf file includes an english summary with details about the study's results.
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Trade Misinvoicing: The Dark Side of World Trade
A. Buehn, Stefan Eichler
World Economy,
No. 8,
2011
Abstract
We analyse the determinants of trade misinvoicing using data on 86 countries from 1980 to 2005. In a simple microeconomic framework, we derive the determinants of four different types of trade misinvoicing taking into account that only the financial incentives determine whether and how much exports/imports to underinvoice or overinvoice, whereas the deterrents only affect the extent of misinvoicing. The hypothesised determinants are tested using data on discrepancies in bilateral trade with the United States. We find that the black market premia and tariffs motivate illegal trading activities. Higher financial penalties effectively act as a deterrent to this crime.
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Vigorous upswing continues
Wirtschaft im Wandel,
No. 3,
2011
Abstract
The worldwide upswing has gained momentum since last autumn. The main cause for the high growth dynamics is a monetary policy that is very expansive not only in advanced economies, where the utilization rates for production capacities are mostly still low, but also in emerging market economies that in general have already recovered from the Great Recession.
The German economy participates in the worldwide upswing. Here the recovery is ahead of those in most other advanced economies. Both exports and domestic demand are strongly expanding. One reason for the high growth dynamics is that key interest rates are particularly low for Germany, as the ECB has to take into account that many euro area economies are much more fragile. In addition, Germany still benefits from the wage moderation and the labour market reforms in the past decade: employment is expanding strongly, and firms find many profitable investment projects.
Major risks for this forecast are structural problems of some advanced economies that had become visible during the Great Recession and are still unresolved (concerning the US housing market and the crisis of confidence in the fiscal sustainability of some euro area countries in particular). A further risk is the possibility of further oil price hikes due to political instability in North Africa and the Middle East.
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Measuring Regionalized Knowledge Generation and Transfer – A Feasibility Study Using a Multi-layer Approach in the Free State of Saxony
Mirko Titze, Matthias Brachert, Jutta Günther, Michael Schwartz
IWH-Sonderhefte,
No. 5,
2010
Abstract
Economic literature regards knowledge creation and learning as critical elements for gaining competitive advantage of regions. However, recognizing the importance of innovation and knowledge creation to economic success is far from being novel. Original is the view of increasing importance of knowledge creation for speeding up the depreciation of existing knowledge stocks. This puts a high pressure on regional actors to constantly participate in innovation processes to maintain their competitive advantages. Against this background, regional actors – if they aim to be successful in the globalized economy – first require access to a comprehensive and diversified knowledge base. Second, they need to participate in the processes of knowledge generation and knowledge transfer. Thereby, systemic innovation theory has pronounced the view that the locus of innovation and knowledge creation resides not only within the boundaries of the regional actors, such as private firms, universities, research laboratories, suppliers, and customers, but is the result of an interdependent exchange process between these different types. Collaborative interactions, bringing together different types of actors, may therefore lie well at the heart of accelerated knowledge creation and learning at the regional level (Lundvall and Johnson 1994).
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Midterm Projection: Economic Development and the Public Budget in the Years 2011 - 2015
Kristina vanDeuverden, Rolf Scheufele
Wirtschaft im Wandel,
No. 1,
2011
Abstract
In 2010 economic activity in Germany improved steadily. While global trade increased in the first half of the year – and, thus, German exports – domestic demand became increasingly important. Private Investment recovered and – even more important – consumption contributed to economic growth. Moreover, employment reached an all-time high and unemployment decreased further during the year.
Until 2015 economic growth will keep to be relatively high. German external trade will still gain momentum by the development of global trade. However, economic development will be driven more and more by domestic demand. Interest rates will remain relatively low and stimulate investment activity. Moreover, unemployment will continually shrink, partly reflecting demographic developments, but partly mirrored in increasing employment. Due to a higher degree of employment security and rising wages consumption will gain momentum. Real GDP will increase by 2.3% in 2011 and by 1.7% in 2012. From 2013 – 2015 it will rise by 1½% on average.
While the German economy will gain strength, public budgets will clearly improve. In 2010 the deficit ratio exceeds the Maastricht threshold only slightly; in relation to nominal GDP the German budget deficit was about 3.2%. Concerning the high fiscal stimulus, mainly given in the years 2009 and 2010, the deficit ratio is surprisingly low. While income and wage taxes as well as the receipts from social security contributions already increased, unemployment benefits already declined substantially.
The midterm projection shows a favorable development of public budgets. While employment remains high and unemployment continually decreases, the wage tax and the social security contributions will boost revenue. On contrast the same development will lessen public expenditure, especially transfers.
This projection relies heavily on the assumption that fiscal policy will trace its consolidation plans. For instance, it is assumed that the federal level will implement their plans from summer/autumn 2010 and that there will be no additional measures. In this case, in 2015 the German public budget will show a surplus of ¼% in relation to GDP.
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Fiscal Spending Multiplier Calculations based on Input-Output Tables – with an Application to EU Members
Toralf Pusch, A. Rannberg
Abstract
Fiscal spending multiplier calculations have been revived in the aftermath of the
global financial crisis. Much of the current literature is based on VAR estimation
methods and DSGE models. The aim of this paper is not a further deepening of
this literature but rather to implement a calculation method of multipliers which is
suitable for open economies like EU member states. To this end, Input-Output tables are used as by this means the import intake of domestic demand components can be isolated in order to get an appropriate base for the calculation of the relevant import quotas. The difference of this method is substantial – on average the calculated multipliers are 15% higher than the conventional GDP fiscal spending multiplier for EU members. Multipliers for specific spending categories are comparably high, ranging between 1.4 and 1.8 for many members of the EU. GDP drops due to budget consolidation might therefore be substantial if monetary policy is not able to react in an expansionary manner.
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