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Measuring fiscal sustainability on the municipal level: A German case study

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  • Hagist, Christian
  • Vatter, Johannes

Abstract

The consequences of ageing populations for federal and state fiscal policies are, due to the research efforts of the last two decades, well known. However, it is rather less well known how the municipal level is affected. Therefore, by using a modification of the sustainability definition formulated by Blanchard, Chouraqui, Hagemann, and Sartor (1990) and the concepts of Auerbachs, Kotlikoffs and Gokhales Generational Accounting (1991) we define a new framework focusing on capital stock, financial management and depreciation of municipal assets. This papers purpose is to deliver a concept which is able to provide sound indicators for long-term budgeting by local authorities. We apply this framework to three German cities with different typologies, Munich, Freiburg and Schwäbisch Hall.

Suggested Citation

  • Hagist, Christian & Vatter, Johannes, 2009. "Measuring fiscal sustainability on the municipal level: A German case study," FZG Discussion Papers 35, University of Freiburg, Research Center for Generational Contracts (FZG).
    • Handle: RePEc:zbw:fzgdps:35
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    References listed on IDEAS

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    1. Montén, Anna & Thum, Marcel, 2010. "Ageing municipalities, gerontocracy and fiscal competition," European Journal of Political Economy, Elsevier, vol. 26(2), pages 235-247, June.
    2. Benny Geys & Friedrich Heinemann & Alexander Kalb, 2008. "Local Governments in the Wake of Demographic Change: Evidence from German Municipalities," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(4), pages 434-457, December.
    3. Ulrich Benz & Stefan Fetzer, 2006. "Indicators for Measuring Fiscal Sustainability: A Comparison of the OECD Method and Generational Accounting," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(3), pages 367-391, September.
    4. Muellbauer, John, 1992. " Generational Accounting: A New Approach to Understanding the Effects of Fiscal Policy on Saving: Comment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 319-322.
    5. Jens Lundsgaard, 2005. "Ageing, Welfare Serviced and Municipalities in Finland," OECD Economics Department Working Papers 428, OECD Publishing.
    6. Britta Baum & Helmut Seitz & Andrej Worobjew, 2002. "Der Einfluss der Alters- und Familienstrukturen auf die Ausgaben der Länder und Gemeinden," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(1), pages 147-162.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    8. Auerbach,Alan J. & Lee,Ronald D. (ed.), 2001. "Demographic Change and Fiscal Policy," Cambridge Books, Cambridge University Press, number 9780521662444.
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    Cited by:

    1. Xenia Frei & Joachim Ragnitz & Felix Rösel, 2018. "Kosten kommunaler Leistungserstellung unter dem Einfluss von demografischem Wandel und Urbanisierung," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 80, July.

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