Intergovernmental Grants and Public Input Provision: Theory and Evidence from Germany


Hauptmeier, Sebastian


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URL: http://ub-madoc.bib.uni-mannheim.de/1486
URN: urn:nbn:de:bsz:180-madoc-14863
Document Type: Working paper
Year of publication: 2007
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H77 H72 ,
Subject headings (SWD): Steuerpolitik , Steuergerechtigkeit , Öffentliche Förderung , Deutschland
Keywords (English): Fiscal competition , Fiscal equalisation , Intergovernmental grants , Public expenditure , Germany
Abstract: This paper uses a simple model of fiscal competition between local jurisdictions to analyse the impact of intergovernmental grants on the composition of public spending. We find that a higher degree of redistribution within a system of ”fiscal equalisation” coincides with a smaller overall share of spending on productivity-enhancing public inputs. Furthermore, in order to test the theoretical predictions, we carry out an empirical analysis based on a panel of German states. The results are consistent with the theoretical findings and support the existence of an incentive effect of intergovernmental grants on state expenditure policies.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Hauptmeier, Sebastian (2007) Intergovernmental Grants and Public Input Provision: Theory and Evidence from Germany. Open Access [Working paper]
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