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Regulierung des Standortwettbewerbs durch Beihilfenrecht oder Subventionssteuern?


  • Sebastian Jaenichen
  • Torsten Steinrücken


We discuss the pros and cons of the regulation of economic development policies of local authorities at the central level of a federal state and give special attention to European state aid control. In a first step we consider the influence of European state aid law on the efficiency of the spatial distribution of economic activities. Subsidy taxation is proposed as an alternative to regulatory instruments for the control of economic development measures by peripheral authorities. We scrutinize this idea and focus on public finance criteria for the evaluation of tax-systems: political feasibility, allocative and distribu-tive effects. The paper shows that a subsidy tax is capable of solving a lot of the problems inherent in European state aid law while allowing fine-tuning the intensity of inner-European competition for direct investment.

Suggested Citation

  • Sebastian Jaenichen & Torsten Steinrücken, 2007. "Regulierung des Standortwettbewerbs durch Beihilfenrecht oder Subventionssteuern?," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(3), pages 407-440.
  • Handle: RePEc:aeq:aeqsjb:v127_y2007_i3_q3_p407-440

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    References listed on IDEAS

    1. Richard V. Burkhauser & Michaela Kreyenfeld & Gert G. Wagner, 1997. "The German Socio-Economic Panel: A Representative Sample of Reunited Germany and its Parts," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(1), pages 7-16.
    2. Ed Diener, 1994. "Assessing subjective well-being: Progress and opportunities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 31(2), pages 103-157, February.
    3. Carneiro, Pedro & Heckman, James J & Masterov, Dimitriy V, 2005. "Labor Market Discrimination and Racial Differences in Premarket Factors," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 1-39, April.
    4. Kevin Denny & Vincent O'sullivan, 2007. "Can education compensate for low ability? Evidence from British data," Applied Economics Letters, Taylor & Francis Journals, vol. 14(9), pages 657-660.
    5. Richard V. Burkhauser & Dean R. Lillard, 2005. "The Contribution and Potential of Data Harmonization for Cross-National Comparative Research," Discussion Papers of DIW Berlin 486, DIW Berlin, German Institute for Economic Research.
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    More about this item

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy


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