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Kleine Bundesländer – Achillesferse des Föderalismus?

Author

Listed:
  • Berthold Norbert
  • Fricke Holger

    (Bayerische Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik, Sanderring 2, 97070 Würzburg)

  • Müller Andreas

    (Bayerische Julius-Maximilians-Universitat Wurzburg, Lehrstuhl fur Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik, Sanderring 2, 97070 Wurzburg)

Abstract

In this article we examine whether or not the small size (in terms of population) of some German Laender (states) is harmful. The economic theory of federalism forms the ground on which we present empirical evidence, focusing on our own results for the German Laender. We find evidence that political decisions on federal level instead of Laender level cause preference costs, and so do decisions in big or merged Laender. On the other hand, economies of scale as an assumed advantage of big jurisdictions obviously do not influence the economic outcome very much. We do not find indications for strategic behaviour due to external effects either. Nonetheless, if external effects are regarded as a problem concerning “Stadtstaaten”, they should rather be internalised by horizontal negotiations than by other instruments such as vertical payments or mergers between Laender. Hence, mergers of Laender do not seem to be a necessary precondition for decentralisation, which in turn is advisable as our results show.

Suggested Citation

  • Berthold Norbert & Fricke Holger & Müller Andreas, 2007. "Kleine Bundesländer – Achillesferse des Föderalismus?," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 56(2), pages 152-178, August.
    • Handle: RePEc:lus:zwipol:v:56:y:2007:i:2:p:152-178:n:3
    DOI: 10.1515/zfwp-2007-0203
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