Non-market Allocation in Transport: A Reassessment of its Justification and the Challenge of Institutional Transition
Ulrich Blum
50 Years of Transport Research: Experiences Gained and Major Challenges Ahead,
2005
Abstract
Economic theory knows two systems of coordination: through public choice or through the market principle. If the market is chosen, then it may either be regulated, or it may be fully competitive (or be in between these two extremes). This paper first inquires into the reasons for regulation, it analyses the reasons for the important role of government in the transportation sector, especially in the procurement of infrastructure. Historical reasons are seen as important reasons for bureaucratic objections to deregulation. Fundamental economic concepts are forwarded that suggest market failure and justify a regulatory environment. The reasons for regulation cited above, however, may be challenged; we forward theoretical concepts from industrial organization theory and from institutional economics which suggest that competition is even possible on the level of infrastructure. The transition from a strongly regulated to a competitive environment poses problems that have given lieu to numerous failures in privatization and deregulation. Structural inertia plays an important role, and the incentive-compatible management of infrastructure is seen as the key element of any liberal transportation policy. It requires that the setting of rules on the meta level satisfies both local and global efficiency ends. We conclude that, in market economies, competition and regulation should not be substitutes but complements. General rules, an "ethic of competition" have to be set that guarantee a level playing field to agents; it is complimented by institutions that provide arbitration in case of misconduct.
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Declining population and rising costs for municipal services
Peter Haug
Wirtschaft im Wandel,
No. 11,
2004
Abstract
Population decrease in many East-German towns and municipalities does not only increase the stock of empty residential buildings. It also makes provision of network-related goods and services more costly. Considering public water and sewerage services as example, the article investigates empirically how costs of provision per inhabitant depend on population number and -density. Diverging from similar studies, spatial differences in distribution costs per inhabitant are calculated within the area of a case study municipality. The calculations are based on cost accounting data of the local provider. A central problem is the choice of an appropriate spatial key figure to allocate costs. The results indicate cost advantages in providing densely populated quarters with network-related services. Consequently, rising per-capita costs should be taken into account to a greater extent for the city conversion programmes in East Germany than they have been up to now.
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The new social benefits scheme (Arbeitslosengeld II) and the Municipal Option Act
Herbert Buscher
Wirtschaft im Wandel,
No. 9,
2004
Abstract
One of the most important reform measures of the German labor market relates to the harmonization of social welfare and unemployment assistence to the new ‘”Arbeitslosengeld-II”. In the context of these reform measures it is expected that local employment offices and local authorities should constitute working parties to facilitate the unemployed in finding new jobs. In the case that a local authority prefers to manage this job in its own responsibility she has the right to opt. The paper discusses possible advantages and disadvantages of this option.
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The influence of Vertical Integration and Property Rights on Network Access Charges in the German Electricity Markets
Christian Growitsch, Thomas Wein
External Publications,
No. 6,
2004
Abstract
German Electricity markets were deregulated in the late nineties of the last century. In contrast to other European countries, the German government enacted negotiated third party access instead of installing a regulation authority. Network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers, which specify the calculation schemes for access charges. Local and regional suppliers are nevertheless able to set (monopolistic) charges at their own discretion, restricted only by the possibility of interference competition authorities. While some of those suppliers have been acquired by one of the four Transmission System Operators and become vertically integrated, the majority is still independent public utility companies. In this paper we analyse if there is evidence for different charging behaviour depending on the supplier’s economic independence or its level of vertical integration. Controlling for other coefficients as the so called structural features and related cost differences as well as the influence of competition law suits, multivariate estimations show significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges compared to independent suppliers for at least one typical case.
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The Reform of Local Public Services of General Interest in Europe
Peter Haug, Martin T. W. Rosenfeld
Applied Economics Quarterly (Supplement),
2004
Abstract
The benefits of a reduced supply of local public services may more than outweigh the supposed welfare losses. This was suggested by various theoretical and empirical investigations in many fields of economics during the last decades. Nevertheless, local and national politicians, trade unionists, charities, and other lobbyists have succeeded in preventing further liberalisation of “services of general interest” in Europe. This article examines why these preserve agents have been and are still successful. The analysis is based on an institutional economic approach. Several policy measures and institutional changes are suggested to either reduce influence of preserve agents or to compensate them for their losses.
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Municipal companies in Germany: turnover, employment, fields of operation
Peter Haug
Wirtschaft im Wandel,
No. 13,
2003
Abstract
Despite the ongoing political and scientific discussion about justification and extent of municipal economic activities, neither official statistics nor surveys of associations or research institutes provide valid data concerning the importance of local public enterprises. The IWH has carried out an analysis of different statistical sources which tries to fill the gap for municipal enterprises and yields the following results: Turnover- and employment shares of (big) companies with municipal shareholding are rather small in Germany. Nevertheless, such enterprises dominate within certain branches (e.g. public utilities) and their importance for the regional economy is particularly in Eastern Germany above-average.
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Opportunities and Risks for Regional Development in Former East German Brown Coal Mining Areas: The Case of the “Geiseltal” Mining Area in Saxony-Anhalt
Peter Franz
Wirtschaft im Wandel,
No. 11,
2003
Abstract
The rehabilitation of former brown coal open mining locations represents an important section of the economic and ecological restructuring process in East Germany, taking place since 1990. The recent progress in rehabilitation has led to large amounts of newly disposable space and thus expands the opportunities for regional development, especially with respect to tourism. But the possible positive effects are at risk because of diverse obstacles. In the case of the former open mining location of the “Geiseltal” in the south of Saxony-Anhalt such obstacles show up in form of a strong identification of the residents with the tradition of mining industry, in form of the expansive interests of nature protection organizations, and in form of inadequate organisational structures of the local public administration. In the case of a tourism-oriented development strategy risks arise concerning the actual duration of the remaining recultivation process and concerning the competition with locations with similar development targets.
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Standortbedingungen der Biotechnologiebranche - Eine Analyse zur Identifikation von Erfolgsfaktoren für Biotechnologiefirmen und Bioregionen
Walter Komar
IWH Discussion Papers,
No. 176,
2003
Abstract
The paper analyzes the factors, which are important for the success of biotechnology companies and bio regions. For these purposes the local conditions of an advanced bio region are compared with a not so advanced bio region in a bench mark approach. The significant factors for the success of biotechnology companies and bio regions are identified by the logistic regression analysis. The result is that a bundle of factors for the development of biotechnology companies and bio regions is important. Therein the supply of human capital, networks and public research in the region play an outstanding role.
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Local Taxes and Capital Structure Choice
Reint E. Gropp
International Tax and Public Finance,
No. 1,
2002
Abstract
This paper investigates the question of taxation and capital structure choice in Germany. Germany represents an excellent case study for investigating the question of whether and to what extent taxes influence the debt-equity decision of firms, because the relative tax burdens on debt and equity vary greatly across communities. German communities levy local taxes on profits and long-term debt payments in addition to personal and corporate taxes on the federal level. A stylized model is presented incorporating these taxes. The model shows that local taxes create substantial incentives for firms to use debt financing. Furthermore, the paper empirically investigates the effect of local business taxes on the share of debt used to finance incremental investments by German firms. I find that local taxes significantly influence the capital structure choice of firms, controlling for a large number of other factors. In an extensive sensitivity analysis the tax effect are found to be robust across several different specifications.
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- Solidarity Pact II -: The responsibilities of the New Länder
Joachim Ragnitz
Wirtschaft im Wandel,
No. 10,
2001
Abstract
In June 2001 the so called "Solidarity Pact II" between the East German States and the Federal Government was set in effect. Federal payments due to the still existing deficit in infrastructure were aggreed upon for the next 20 years. However, as the scope for future payments is limited, public spending has to aim for growth purposes in a more strictly manner than in the past.
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