Currently, a controversial problem in Germany is the reform of the fiscal equalisation (revenue sharing) scheme necessitated by a decision of the constitutional court. A central aspect is the examination of the privileges enjoyed by the three city-states, Hamburg, Bremen and Berlin, under the current system. The main question in whether states that are densely or sparsely populated are subject to higher costs in the provision of public services. This study examines this issue by breaking down public spending into price and quantity components, as possible additional requirements are determined only by higher prices. The method used is an input-output approach. In addition, using econometric analysis, the relationship between population density and the cost of providing services is examined. The results show that the privileges enjoyed by the city states in the fiscal equalisation scheme are too great. Moreover, a differentiation between the individual city states is necessary. In contrast, the study sees no need for additional requirements for sparsely populated regions.
Christian Baretti, Rüdiger Parsche, Bernd Huber, Karl Lichtblau, „Die Einwohnergewichtung auf Länderebene im Länderfinanzausgleich, ifo Beiträge zur Wirtschaftsforschung, No 4, 2001.
Christian Baretti, „Anreizeffekte des Länderfinanzausgleichs, ifo Beiträge zur Wirtschaftsforschung, No 6, 2001.
Christian Baretti, Robert Fenge, Bernd Huber, Willi Leibfritz, Matthias Steinherr, „Der deutsche Förderalismus auf dem Prüfstand: Vorschläge zu einer effizienteren Gestaltung“, ifo Schnelldienst No 28-29, 2000.
Christian Baretti, Bernd Huber, Karl Lichtblau, Rüdiger Parsche, „Einwohnerwertung im Länderfinanzausgleich – Ökonomische Analyse und Reformbedarf, ifo Schnelldienst, No 3, 2001.
Christian Baretti, „Das Maßstäbegesetz auf dem Prüfstand, ifo Schnelldienst, No 11, 2001.
Einwohnerwertung im Länderfinanzausgleich - Ökonomische Analyse und Reformbedarf, ifo Schnelldienst, No 3, 2001.