On the Economics of Ex-Post Transfers in a Federal State: A Mechanism Design Approach
Martin Altemeyer-Bartscher, T. Kuhn
WWDP, 95,
No. 95,
2008
Abstract
As a common feature in many federal states grants-in aid are payed to jurisdictions ex post, i.e. after local policy measures have chosen. We show that the central government cannot offer grants ex ante in a federal states with informational asymmetries as well as inter-temporal commitment problems. Local governments’ incentives to provide public goods are distorted if they rely on federal grants-in-aid offered ex post. Furthermore it becomes obvious that local governments are apt to substitute tax revenue for higher grants-in-aid if relevant local data are unobservable for the central government. To which extend ex post transfers mitigate local governments’ incentives crucially depends on the information structure predominant in the federation.
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Is a Centralisation of Local Governmental Structures an Appropriate Way to Ensure an Efficient Provision of Local Public Services? Findings from Case Studies in the State of Saxony-Anhalt
Gerhard Heimpold, Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 1,
2008
Abstract
Wenn Städte und Gemeinden im interregionalen Standortwettbewerb mithalten und ihre Leistungen effizient und effektiv anbieten wollen, benötigen sie auch eine geeignete Organisationsform. Der vorliegende Beitrag stellt am Beispiel Sachsen-Anhalts im Rahmen von Fallstudien ermittelte Ergebnisse zu wichtigen Aspekten der Effizienz und Effektivität zentralistischer und föderativ organisierter Gemeindeformen vor. Die Konzentration auf Sachsen-Anhalt erklärt sich nicht zuletzt durch die dort in Gang gesetzte Gemeindegebietsreform, die eine möglichst flächendeckende Bildung von sogenannten Einheitsgemeinden vorsieht. Die Befunde liefern kein Bild, das eindeutig zugunsten der untersuchten zentralistisch organisierten „Einheitsgemeinden“ ausfällt, wenngleich dort, wie theoretisch erwartet, Indizien für effizienzfördernde Economies of Scale vorhanden sind, die sich allerdings nicht im Selbstlauf erschließen. Zudem gibt es auch in den untersuchten föderativ organisierten Kommunen in der Form von „Verwaltungsgemeinschaften“ Hinweise auf Effizienz- und Effektivitätsvorteile, die aus dem föderativen Wettbewerb und der Bürgerbeteiligung herrühren. In Anbetracht der für die Zukunft erwarteten zunehmenden Erosion der Bevölkerung und Abnahme des finanziellen Handlungsspielraums der Kommunen in weiten Teilen Sachsen-Anhalts spricht einiges dafür, den Aspekt der Effizienzsteigerung durch räumliche Konzentration von kommunalen Einrichtungen mit einem hohen Gewicht zu versehen. Dies spräche für eine Entscheidung zugunsten der Einheitsgemeinden. Damit müßte auf die Vorteile der heutigen Verwaltungsgemeinschaften verzichtet werden. Zwar könnten gemeindliche Einrichtungen auch innerhalb von Verwaltungsgemeinschaften räumlich konzentriert werden, indem die entsprechenden Kompetenzen auf die „übergeordnete“ Ebene der Verwaltungsgemeinschaft übertragen werden. In den sachsen-anhaltischen Verwaltungsgemeinschaften wurde aber bislang nur zögerlich von dieser Möglichkeit Gebrauch gemacht. Zudem stehen verfassungsrechtliche Schranken einer umfangreichen Zentralisation innerhalb von Verwaltungsgemeinschaften entgegen. Vor diesem Hintergrund ist zu empfehlen, sich nicht ausschließlich auf die Einführung von Einheitsgemeinden zu konzentrieren, sondern auch nach Alternativen zu suchen, welche die Vorteile der zentralistischen Gemeindeorganisation mit jenen der föderativen Modelle verknüpfen könnten.
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Effects of “Democratic Control” on the Efficiency of Local Public Enterprises: Empirical Evidence for Water Suppliers in Eastern Germany
Peter Haug
Public Finance and Management,
No. 1,
2008
Abstract
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Local Government Control and Efficiency of the Water Industry: An Empirical Analysis of Water Suppliers in East Germany
Peter Haug
IWH Discussion Papers,
No. 3,
2007
Abstract
The paper deals with the effects of local governments’ interference with business affairs of publicly owned utilities. A partial model is presented to illustrate the consequences of “democratic control” for the public managers’ effort and the efficiency of local public production. To check the theoretical results empirically, a two-stage data envelopment analysis (DEA) is carried out for a sample of East German water suppliers. The organisational form is used as a measure for the degree of municipal control. The results of the OLS- and Tobit regression indicate an efficiency-enhancing effect of organisational forms with less distinctive control options for local politicians.
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Local Public Utilities' Profits and Municipal Expenses in Germany: An Empirical Analysis
Peter Haug, Birger Nerré
Proceedings of the 99th Annual Conference on Taxation (November 16-18), Washington DC,
2006
Abstract
The article offers information on profits and municipal expenses of local public utilities in Germany. It reveals that cities and municipalities faced rising expenses over the last years and the only way for local governments to avoid budgetary bottlenecks is to postpone infrastructure investment and increase short-term borrowing. The countries municipalities tried to overcome such difficulties by increasing local public utilities' profits.
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Non-market Allocation in Transport: A Reassessment of its Justification and the Challenge of Institutional Transition
Ulrich Blum
50 Years of Transport Research: Experiences Gained and Major Challenges Ahead,
2005
Abstract
Economic theory knows two systems of coordination: through public choice or through the market principle. If the market is chosen, then it may either be regulated, or it may be fully competitive (or be in between these two extremes). This paper first inquires into the reasons for regulation, it analyses the reasons for the important role of government in the transportation sector, especially in the procurement of infrastructure. Historical reasons are seen as important reasons for bureaucratic objections to deregulation. Fundamental economic concepts are forwarded that suggest market failure and justify a regulatory environment. The reasons for regulation cited above, however, may be challenged; we forward theoretical concepts from industrial organization theory and from institutional economics which suggest that competition is even possible on the level of infrastructure. The transition from a strongly regulated to a competitive environment poses problems that have given lieu to numerous failures in privatization and deregulation. Structural inertia plays an important role, and the incentive-compatible management of infrastructure is seen as the key element of any liberal transportation policy. It requires that the setting of rules on the meta level satisfies both local and global efficiency ends. We conclude that, in market economies, competition and regulation should not be substitutes but complements. General rules, an "ethic of competition" have to be set that guarantee a level playing field to agents; it is complimented by institutions that provide arbitration in case of misconduct.
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The influence of Vertical Integration and Property Rights on Network Access Charges in the German Electricity Markets
Christian Growitsch, Thomas Wein
Externe Publikationen,
No. 6,
2004
Abstract
German Electricity markets were deregulated in the late nineties of the last century. In contrast to other European countries, the German government enacted negotiated third party access instead of installing a regulation authority. Network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers, which specify the calculation schemes for access charges. Local and regional suppliers are nevertheless able to set (monopolistic) charges at their own discretion, restricted only by the possibility of interference competition authorities. While some of those suppliers have been acquired by one of the four Transmission System Operators and become vertically integrated, the majority is still independent public utility companies. In this paper we analyse if there is evidence for different charging behaviour depending on the supplier’s economic independence or its level of vertical integration. Controlling for other coefficients as the so called structural features and related cost differences as well as the influence of competition law suits, multivariate estimations show significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges compared to independent suppliers for at least one typical case.
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The Reform of Local Public Services of General Interest in Europe
Peter Haug, Martin T. W. Rosenfeld
Applied Economics Quarterly (Supplement),
2004
Abstract
The benefits of a reduced supply of local public services may more than outweigh the supposed welfare losses. This was suggested by various theoretical and empirical investigations in many fields of economics during the last decades. Nevertheless, local and national politicians, trade unionists, charities, and other lobbyists have succeeded in preventing further liberalisation of “services of general interest” in Europe. This article examines why these preserve agents have been and are still successful. The analysis is based on an institutional economic approach. Several policy measures and institutional changes are suggested to either reduce influence of preserve agents or to compensate them for their losses.
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