Long-term Effects of a Reform of the Fiscal Equalization Scheme in Germany

Content

The study assesses the long-term effects of a proposed reform to redesign the fiscal equalization scheme in Germany. It uses growth and tax revenue forecasts and shows that the proposed equalization scheme at least partially helps to mitigate fiscal inequalities between federal states. The authors also show that highly indebted federal states would benefit even more from an alternative proposal by Eichel et al. (2013). Allocating transfers from the federal government with respect to GDP per capita may help to further reduce inequalities.

Publications on the project

Bauer, David, Joachim Ragnitz and Felix Rösel, "Langfristige Auswirkungen der Neuregelung der Bund-Länder-Finanzbeziehungen bis 2030 – Eine Simulationsstudie", ifo Dresden berichtet 24 (03), 2017, 14–16 | PDF Download