Due to a declining population and revenues from the fiscal equalization schemes, the revenue of Mecklenburg-Western Pomerania will diminish in the next few years. Furthermore, funding from the European Union and from the solidarity agreement of the German unification will also decrease. Through the principle of equality, the revenues of the local level (counties) are going to decline in line with the losses at the state level. Due to population ageing and shrinking, the expenditures are going to remain stable or increase. Therefore, a draft legislation of the restructuring of the administrative district was submitted. A previous version failed in 2006 by the reason of incompatibility with the state (Land) constitution. The federal government hopes to realize economies of scope and to reduce the county budget. The aim of the project is to determine the expected per capita savings in labour costs in both rural and urban counties.
A panel data analysis is used to calculate the estimated labour costs for the new county structure. To estimate the development of per capita expenditures on labour, the expenditures in Mecklenburg-Western Pomerania in the years 1995-2007, are regressed on a set of cost determining variables. The results are then used to determine the savings resulting from the new county structure.
Statistical Office of Mecklenburg-Western Pomerania.
The results confirm the advantages of a restructuring of the administrative districts in Mecklenburg-Western Pomerania. Furthermore the results are similar to findings of other experts. By varying the estimation a range for the savings potential was established.
Ragnitz, Joachim; Steinbrecher, Johannes und Christian Thater: Fiskalische Einsparpotenziale durch die Kreisstrukturreform in Mecklenburg-Vorpommern, ifo Dresden Studie 55, Munich/Dresden 2010.
Steinbrecher, Johannes and Christian Thater: „Fiskalische Einsparpotenziale durch die Kreisstrukturreform in Mecklenburg-Vorpommern“, in: ifo Dresden berichtet 03/2010, p. 24-33 (Download, PDF, 616 KB).
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