Financial Equalization Research Articles

Steuerwettbewerb und direkte Demokratie in den Schweizer Kantonen

The issue of the impact of tax competition between the cantons has been quite present in the public discussion, especially in relation with the reform of the Swiss system of financial equalization. The connection between the degree of direct democratic rights and the intensity of tax competition ana‐lysed by Feld (1997) seems to be particularly interesting for political science. Differently to the approach of Feld (1997) this research note examines it with regard to the tax policies in the cantons. In addition, a less criticized way to measure the institutions of direct democracy is used and the research period is extended. The analysis shows that there is a trade‐off between the exit‐ and the voice‐option. In other words: those cantons that have well developed direct democratic institutions, are less affected by the pressure of tax competition. As a consequence of the perceived influence, their citizens do less probably move to an other canton as a reaction to a heavy tax burden.

Private Compulsory Long-term Care Insurance in Germany

In Germany compulsory long-term care insurance was established in 1995. Private health insurers undertook to implement compulsory long-term care insurance for that part of the population that had a supplementary private health insurance. This paper deals with the history of private compulsory long-term care insurance and how it is calculated, based on the principle of equivalence for lifelong premiums (provided that there is no inflation in benefits) and on an ageing provision. Furthermore, it explains its transfer elements and financial equalization, which are necessary to compensate both the insurance of very old people and those needing long-term care as well as legal restrictions on premiums.

What explains the Differences in the Tax Burden Between Swiss Cantons?

ZusammenfassungIn the present article, we empirically analyse a series of competing hypothesis that try to account for the considerable disparity in the tax burden between Swiss cantons. Three hypotheses focus on differences in spending levels: The first explains differences in the tax burden with differences in citizens' demand for government services. The second emphasizes the differences in efficiency between cantonal administrations, whereas the third insists on the more or less easy access to cantonal instruments of direct democracy. However, when confronted to the data, none of these three expenditure‐based hypotheses are confirmed by our cross‐sectional estimations. On the contrary, our regressions lend support to the hypotheses which highlights the differences in tax revenues between cantons. These results suggest that it is not differences in government spending which account for the disparity in cantonal tax levels, but differences in the cantonal endowment with resources. This indicates that some financial equalization on the cantonal level might strengthen the equity of Switzerland's tax system.

Die Übertragung westdeutscher Institutionen auf die ostdeutsche Wirklichkeit – Ein erfolgversprechendes Zusammenspiel? Kommunale Finanzausgleichssysteme im sozioökonomischen Kontext

Abstract In spite of its long history, reform of financial equalization at local government level has not brought the necessary improvements in efficiency. Therefore, it is surprising that the criticized West German system was transferred almost unchanged to the East German Laender in the course of reunification. Obviously the politicians were in conflict between testing new promising alternatives and preserving the calculable institutional structure. Therefore, this paper compares the financial equalization law of two Laender (Baden-Wuerttemberg and Saxony) in order to research its suitability under different socio-economic conditions. In the analysis we can clearly show the impact of socio-economic characteristics on the carrying ability of institutions, so any transferability of local financial equalization systems has to be rejected.

Entwicklung der Finanzierung einer multifunktionalen Waldbewirtschaftung in den Forstbetrieben öffentlicher Waldeigentümer im schweizerischen Alpenraum | Development of Financing of a Multi-Functional Forest Management for Forest Enterprises of Publicly Owned Forest in the Alpine Region of Switzerland

With the federal forestry legislation coming into force in 1993, a multi-functional forest management has been established as the fundamental objective of national forest policy in Switzerland. This modern concept was already developed with the beginning of the federal forest policy during the second half of the last century with the effect that forest enterprises already perform extensive activities in the service sector. For publicly owned forest enterprises in the Alpine region the payment flows clearly show at which degree multi-functional management takes effect on the corresponding financing. Services provided by forest enterprises in the sectors of protection(safe-guarding) and well-being are not only financed by the profits obtained from wood production, but also by budget positions especially established for this purpose. Since the 1980s, the sectoral financing for providing services by the forest enterprises has at least partially contributed to the off-setting of the impact caused by unfavourable economic conditions in wood production. Due to the on-going planning process for the realisation of co-ordinated regional or cantonal policies as well as inter-country developments within the realms of the Alpine convention,the basis for the financing of public forest enterprises based on multi-functional forest management will be even more strongly differentiated in coming years. Pilot projects carried out under the new financial equalisation system between the federal and cantonal governments suggest that multifunctional forest management will form a solid basis for the development and implementation of forest enterprises strategies. On the operational level it is necessary to develop and apply suitable instruments for cost and management control.

Territorial justice in unified Germany: Financial equalization, the Länder and the Federal Constitutional Court

Geographers have traditionally been interested in the issue of territorial justice conceived in terms of distributional equality. The German constitution incorporates a concept of financial equalization with the objective of creating equivalent living conditions throughout the federal territory. This primarily involves the redistribution of finance, the regulation of which has been a continual source of conflict. The paper looks at the role of the Federal Constitutional Court in mediating such conflict. The Court is the ‘supreme guardian of the constitution’ and a highly influential policy-making institution within the German political system. Commentators have described a process of the judicialization of politics, with an increasing number of important political decisions being taken by the Court, rather than in Parliament. The decisions of the Court within the sphere of financial equalization are examined in this light. Further, the particular relevance of a geographical perspective in this regard is highlighted.

Self-Interest, Symbolic Values, and the Financial Equalization of the Public Schools

Using a natural experiment in which some school districts stood to lose dollars due to court-ordered financial equalization and others stood to gain dollars, I test theories of self-interest and symbolic politics as predictors of dependent variables with racial overtones. The data show a substantial self-interest effect. However, even with the presence of a self-interest effect, symbolic values are still important, most notably those associated with race. The self-interest calculation is then investigated. Relevant variables include levels of information, beliefs, and individual predispositions. The effect of these variables on self-interest demonstrates that the assessment of self-interest is not a simple mechanistic process, but contingent upon a variety of affective variables. Finally, I note that self-interest affects the aggregate level of support for the dependent variable within district but has little effect on its relationship with symbolic values.

Financial equalisation between local and regional authorities in European countries

Financial equalisation between local and regional authorities in European countries

Financing German federalism: Problems of financial equalisation in the unification Process

The keystone of any federal system is the system of allocation of financial resources between the national and subnational levels of government. The German system provides for the equalisation of resources both vertically between federation and Lander and horizontally between the Lander themselves. Prior to unification the financial equalisation system had already come under severe strain as a series of conflicts emerged between the Lander over the allocation of resources. Unification presented new strains which promoted disagreement between federation and old Lander over how the incorporation of the new Lander in the east should be financed. The eventual outcome was a series of transitional arrangements which have largely excluded the new Lander from both the vertical and horizontal financial equalisation systems until 1995.

Federal-Provincial Financial Equalization and the Canadian Constitution

The development of federal-provincial financial equalization in Canada is reviewed in this essay. Also included is a discussion of the 1982–1987 fiscal arrangements; an explanation of two competing philosophies of equalization—fiscal need and fiscal equity; and an exploration of some implications of the 1982 Constitution Act for the future of equalization in Canada. It is concluded that the 1982 Act offers substantial support to the narrow-based fiscal equity principle and that future equalization programs in Canada should therefore be similar to current practice.

Equalization Schemes in German Unemployment Compensation

Relevance of the German experience, 482. — I. Cooperation for the relief of the unemployed, 1918–1927: early demobilization measures, 483; unemployment relief measures, 484; nation-wide equalization, 486. — II. The national unemployment insurance act of 1927: federal and state contributions, 488; effects of the depression, 490. — III. Extent of financial equalization, 1924–1936: national and state contributions to the cost of unemployment relief, 490; equalization within the Federal Institute, 493. — IV. Conclusions, 496.