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Legislative Malapportionment and the Politicization of Germany's Intergovernmental Transfer System

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Author Info

  • Hans Pitlik

    (University of Hohenheim, Stuttgart, Germany)

  • Friedrich Schneider

    (Johannes Kepler University, Linz, Austria)

  • Harald Strotmann

    (Institute for Applied Economic Research (IAW), Tübingen, Germany)

Abstract

Legislative bargaining theory suggests that fiscal transfers among member states of a federation are determined to a substantial degree by political representation effects. Malapportionment of the states'population in the legislature is claimed to lead to disproportional benefits of overrepresented states. The article analyzes empirically the determinants of funds in Germany's intergovernmental transfer system. The authors expand previous investigations to include the effects of both the bicameral system in Germany and the postreunification period. Using data for the period from 1970 to 2002, the authors find that malapportionment in the upper house leads to disproportional state shares of per capita transfers. Estimates also indicate that the impact of overrepresentation has somewhat increased over time. Disproportional representation in the lower house does not seem to matter, as the institutional framework of decision making in the lower chamber is not too supportive to constitute a bias towards overrepresented states.

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File URL: http://pfr.sagepub.com/content/34/6/637.abstract
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Bibliographic Info

Article provided by in its journal Public Finance Review.

Volume (Year): 34 (2006)
Issue (Month): 6 (November)
Pages: 637-662

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Handle: RePEc:sae:pubfin:v:34:y:2006:i:6:p:637-662

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Keywords: legislative bargaining; overrepresentation; fiscal transfer system; Germany;

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References

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  13. Philip J. Grossman, 1987. "A Political Theory of Inter-Governmental Grants," School of Economics Working Papers 1987-06, University of Adelaide, School of Economics.
  14. Pitlik, Hans & Schmid, Gunther & Strotmann, Harald, 2001. " Bargaining Power of Smaller States in Germany's Landerfinanzausgleich 1979-90," Public Choice, Springer, vol. 109(1-2), pages 183-201, October.
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Citations

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Cited by:
  1. Sebastian Galiani & Iván Torre & Gustavo Torrens, 2014. "Fiscal Federalism and Legislative Malapportionment: Causal Evidence from Independent but Related Natural Experiments," NBER Working Papers 19995, National Bureau of Economic Research, Inc.
  2. Baskaran, Thushyanthan, 2013. "Coalition governments, cabinet size, and the common pool problem: Evidence from the German states," European Journal of Political Economy, Elsevier, vol. 32(C), pages 356-376.
  3. Kóczy Á., László & Biró, Péter & Sziklai, Balázs, 2012. "Választókörzetek igazságosan?
    [Fair apportionment of voting districts in Hungary]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1165-1186.
  4. Hepp, Ralf & von Hagen, Jürgen, 2009. "Fiscal Federalism in Germany: Stabilization and Redistribution Before and After Unification," CEPR Discussion Papers 7246, C.E.P.R. Discussion Papers.
  5. Alexander Fink & Thomas Stratmann, 2009. "Institutionalized Bailouts and Fiscal Policy: The Consequences of Soft Budget Constraints," CESifo Working Paper Series 2827, CESifo Group Munich.
  6. Baskaran, Thushyanthan, 2012. "Soft budget constraints and strategic interactions in subnational borrowing: Evidence from the German States, 1975–2005," Journal of Urban Economics, Elsevier, vol. 71(1), pages 114-127.
  7. Tiberiu Dragu & Jonathan Rodden, 2010. "Representation and regional redistribution in federations," Working Papers 2010/16, Institut d'Economia de Barcelona (IEB).
  8. Jorge P. Gordin, 2007. "Patronage-Preserving Federalism? Legislative Malapportionment and Subnational Fiscal Policies in Argentina," GIGA Working Paper Series 52, GIGA German Institute of Global and Area Studies.
  9. Jonathan Rodden, 2009. "Federalism and Inter-Regional Redistribution," Working Papers 2009/3, Institut d'Economia de Barcelona (IEB).
  10. Pablo Simon-Cosano & Santiago Lago-Peñas & Alberto Vaquero, 2014. "On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain," Publius: The Journal of Federalism, Oxford University Press, vol. 44(1), pages 135-156, January.

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