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Financial Federalism in Germany: Cooperation or Competition?

  • Feld Lars P.

    (Philipps-Université de Marbourg)

In this article, German federalism is analyzed through its implications for public spending and for public revenue. The structure of government spending and taxation has evolved in the direction of greater centralisation. This tendency reveals itself (1) in the constitutional changes with regard to taxation, (2) the major territorial reforms and (3) in the increased influence of the federal state on the public spending of inferior levels of government. The evening out between authorities is too egalitarian and the effects on economic development are nefarious. In contrast to a unitary system with a powerful central government, this cooperative federation suffers from a drawback, namely, that the federal state can often not make decisions without the agreement of member states. The consequence is that some reforms are hindered. It is in this way that the need of a fiscal competition between member states in order to better economic policy in Germany makes it felt.Dans cet article, le fédéralisme allemand est analysé à travers ses implications pour les dépenses publiques et pour les recettes publiques. L’évolution des compétences en matière d’imposition et de dépenses indique une tendance à la centralisation. Celle-ci apparaît (1) dans les changements constitutionnels relatifs aux impôts, (2) dans les grandes réformes territoriales, et (3) dans l’augmentation de l’influence de l’État fédéral sur les dépenses publiques des autres niveaux gouvernementaux. La péréquation entre les collectivités est trop égalitaire et les effets sur le développement économique sont néfastes. Comparé à un système unitaire avec un puissant gouvernement central, ce fédéralisme coopératif a le désavantage d’un État fédéral qui ne peut pas souvent prendre une décision sans l’accord des états fédérés. Par conséquent, quelques réformes sont bloquées. C’est ainsi que se fait sentir un besoin de concurrence fiscale entre les fédérés afin d’améliorer a politique économique en Allemagne.

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Article provided by De Gruyter in its journal Journal des Economistes et des Etudes Humaines.

Volume (Year): 13 (2003)
Issue (Month): 4 (December)
Pages: 1-24

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Handle: RePEc:bpj:jeehcn:v:13:y:2003:i:4:n:3
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