IDEAS home Printed from https://ideas.repec.org/p/wfo/wpaper/y2021i629.html
   My bibliography  Save this paper

Fiscal Risk Sharing and Redistribution Between Austrian States

Author

Listed:
  • Lukas Reiss

Abstract

This study analyses the extent of fiscal risk sharing and redistribution for Austria from 2000 to 2019. Overall, fiscal policy smooths about one tenth of regional GDP shocks. While this is primarily driven by the federal budget and social security funds, there is also a significant contribution of the revenue sharing scheme between the federal government and subnational governments. Most interestingly, the case of the Austrian revenue sharing system shows that there are intergovernmental transfer schemes which achieve risk sharing without much redistribution. This is due to mechanisms within this system which grant high-income states shares in federal revenue which are higher than their respective population shares. Furthermore, due to other mechanisms, the Austrian fiscal system is overall highly redistributive between states, but net contributions vary substantially over time.

Suggested Citation

  • Lukas Reiss, 2021. "Fiscal Risk Sharing and Redistribution Between Austrian States," WIFO Working Papers 629, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2021:i:629
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/67159
    File Function: abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pierfederico Asdrubali & Bent E. Sørensen & Oved Yosha, 1996. "Channels of Interstate Risk Sharing: United States 1963–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1081-1110.
    2. Mathias Dolls & Clemens Fuest & Dirk Neumann & Andreas Peichl, 2018. "An unemployment insurance scheme for the euro area? A comparison of different alternatives using microdata," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(1), pages 273-309, February.
    3. Bent E. Sørensen & Oved Yosha, 2007. "Producer Prices versus Consumer Prices in the Measurement of Risk Sharing," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 53(1), pages 3-17.
    4. Sebastian Dullien, 2019. "Risk-sharing by financial markets in federal systems: a critique of existing empirical assessments," Review of Keynesian Economics, Edward Elgar Publishing, vol. 7(3), pages 361-368, July.
    5. Pablo Burriel & Panagiotis Chronis & Maximilian Freier & Sebastian Hauptmeier & Lukas Reiss & Dan Stegarescu & Stefan Van Parys, 2020. "A fiscal capacity for the euro area: lessons from existing fiscal-federal systems," Occasional Papers 2009, Banco de España.
    6. Enrique Alberola & Pierfederico Asdrubali, 1997. "How Do Countries Smooth Regional Disturbances? Risksharing in Spain: 1973-1993," Working Papers 9724, Banco de España.
    7. Lars P. Feld & Christoph A. Schaltegger & Janine Studerus, 2018. "Regional Risk Sharing and Redistribution - The Role of Fiscal Mechanisms in Switzerland," CESifo Working Paper Series 6902, CESifo.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lukas Reiss, 2022. "Fiscal risk sharing and redistribution between Austrian states," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(1), pages 1-20, February.
    2. Burriel, Pablo & Chronis, Panagiotis & Freier, Maximilian & Hauptmeier, Sebastian & Reiss, Lukas & Stegarescu, Dan & Van Parys, Stefan, 2020. "A fiscal capacity for the euro area: lessons from existing fiscal-federal systems," Occasional Paper Series 239, European Central Bank.
    3. Kaufmann, Christoph & Attinasi, Maria Grazia & Hauptmeier, Sebastian, 2023. "Macroeconomic stabilisation properties of a euro area unemployment insurance scheme," Journal of Economic Dynamics and Control, Elsevier, vol. 153(C).
    4. Roel Beetsma & Simone Cima & Jacopo Cimadomo, 2021. "Fiscal Transfers without Moral Hazard?," International Journal of Central Banking, International Journal of Central Banking, vol. 17(3), pages 95-153, September.
    5. Bofinger, Peter & Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Wieland, Volker, 2018. "Vor wichtigen wirtschaftspolitischen Weichenstellungen. Jahresgutachten 2018/19 [Setting the Right Course for Economic Policy. Annual Report 2018/19]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201819.
    6. Luca Rossi, 2021. "Revisiting the Case for a Fiscal Union: the Federal Fiscal Channel of Downside-Risk Sharing in the United States," Temi di discussione (Economic working papers) 1351, Bank of Italy, Economic Research and International Relations Area.
    7. Beetsma, Roel & Cima, Simone & Cimadomo, Jacopo, 2018. "A minimal moral hazard central stabilisation capacity for the EMU based on world trade," CEPR Discussion Papers 12600, C.E.P.R. Discussion Papers.
    8. Kuester, Keith & Jung, Philip & Ignaszak, Marek, 2020. "Federal unemployment reinsurance and local labor-market policies," CEPR Discussion Papers 15465, C.E.P.R. Discussion Papers.
    9. Hebous, Shafik & Weichenrieder, Alfons J., 2015. "Towards a fiscal union? On the acceptability of a fiscal transfer system in the eurozone," SAFE White Paper Series 28, Leibniz Institute for Financial Research SAFE.
    10. Marius Clemens & Guillaume Claveres, 2017. "Unemployment Insurance Union," 2017 Meeting Papers 1340, Society for Economic Dynamics.
    11. Cinzia Alcidi & Mathias Dolls & Clemens Fuest & Carla Krolage & Florian Neumeier, 2017. "The Nature of Shocks in the Eurozone and Their Absorption Channels," EconPol Policy Reports 3, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. Bofinger, Peter & Schnabel, Isabel & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2015. "Zukunftsfähigkeit in den Mittelpunkt. Jahresgutachten 2015/16 [Focus on Future Viability. Annual Report 2015/16]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201516.
    13. Anna Iara, 2016. "Revenue for EMU: A Contribution to the Debate on Fiscal Union," CESifo Economic Studies, CESifo Group, vol. 62(2), pages 301-331.
    14. Roel Beetsma & Brian Burgoon & Francesco Nicoli & Anniek de Ruijter & Frank Vandenbroucke, 2022. "What kind of EU fiscal capacity? Evidence from a randomized survey experiment in five European countries in times of corona," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(111), pages 411-459.
    15. Fiorelli, Cristiana & Giannini, Massimo & Martini, Barbara, 2022. "Private and public risk sharing across Italian regions," Journal of Macroeconomics, Elsevier, vol. 74(C).
    16. António Afonso & José Alves & Krzysztof Beck, 2022. "Pay and unemployment determinants of migration flows in the European Union," Working Papers REM 2022/0251, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    17. Amélie BARBIER-GAUCHARD, 2020. "Blueprint for the European Fiscal Union: State of knowledge and Challenges," Working Papers of BETA 2020-39, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    18. Riemer P. Faber & Ad C. J. Stokman, 2009. "A Short History of Price Level Convergence in Europe," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2‐3), pages 461-477, March.
    19. Martin Beraja, 2017. "Counterfactual Equivalence in Macroeconomics," 2017 Meeting Papers 1400, Society for Economic Dynamics.
    20. Dynnikova, O. & Kyobe, A. & Slavov, S., 2022. "Regional disparities and fiscal federalism in Russia," Journal of the New Economic Association, New Economic Association, vol. 55(3), pages 102-138.

    More about this item

    Keywords

    Risk sharing; fiscal federalism; regional accounts;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wfo:wpaper:y:2021:i:629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Florian Mayr (email available below). General contact details of provider: https://edirc.repec.org/data/wifooat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.