Volume 2, Issue 1

The project „Europe“ has two aspects: a political and an economic one. While the political aspect - a peaceful Europe - can count on universal consent, the economic „constitution“ necessarily invites controversies. In national politics such controversies are „solved“ in a democratic process. The delay in political unification has prevented the emergence of such a process on a European scale. The paper discusses some difficulties which arise from this fact. Attention is drawn to the dogmatic nature of some EU economic policies. It is suggested that in the transition to a more unified European framework a flexible economic policy leaving more room for subsidiarity should be adopted.

Quite a few economists hold the opinion that exorbitant prices paid for original works of art reflect an irrational cult made of unique pieces created by renowned artists; (close to) perfect copies would yield comparable benefits at a substantially lower price. The article gives reasons for the rationality of this seemingly irrational behavior and, among other things, explains the price difference between originals and their copies on a microeconomic basis.

This paper compares the prices charged and the quality of service provided by state monopolies and private insurance companies on the property insurance market. Both the cross-section data from Switzerland and the time-series evidence from Germany strongly suggest that in this specific market the presence of state monopolies is very advantageous for the customers. This raises the question why German academic economists made practically no effort to defend their state insurance monopolies in the debate about the 3rd EU directive on property insurance. Is it possible that peer pressure prevents academic economists from standing up to defend state monopolies, even if these are clearly to the benefit of consumers?

This paper attacks the widespread view that the latest (corporate) income tax reform in Germany was urgently needed to reduce the tax burden on the German economy. In the run-up to this tax reform, the public debate focused on nominal income tax rates and hence neglected the determination of the tax base. Empirical results on effective tax burdens in OECD countries show that a reform of German (corporate) capital taxation cannot be justified on the grounds of the tax burden. The international comparison of effective average tax rates shows that the corporate tax burden in Germany steadily declined from 1980 and was in 1996 lower than in most other industrialised countries. However, we argue that not only the actual tax burden but also the complexity of a tax system determines its international competitiveness. A German tax reform was - and still is - necessary due to the lasting complexity of the tax system and the relatively high tax burden on labour.

Due to the incentives of both suppliers and users of policy advice the influence of economists on government decisions is almost negligible. This paper aims to explore the prospects of policy advice addressed to the general public as a countervailing power. It is argued that in order to have some impact on public opinion economists must rely primarily on propaganda and have to overcome a serious collective action problem. Yet, the organization of the academic system provides no incentives for economists to fulfil the role of general-public-oriented advisers.

Weck-Hannemann (2000) has argued that the sciences differ in the opportunity costs of temporary leave for child raising, determining the fields which women choose for their academic careers. This article argues that this point should be supplemented by other explanations which are at least as plausible as Weck- Hannemann's reasoning. Specifically, it is shown that women are discouraged to a lesser extent than men by the uncertainty of the prospects of finally becoming a tenured professor.

This contribution purports to come up with reform proposals that promise to improve the benefit-cost ratio in health from the point of view of taxpayers and (potential) patients. It starts by noting that a high and increasing share of health care expenditure in the GDP does not per se indicate a need for reform. Rather, the guiding idea is that decisions in the health care sector should be tied more closely to the preferences of consumers, who must obtain more ways to express their willingness-to-pay. The 10 proposals are directed to health insurers, physicians and medical associations, hospital management, and policy makers proper. Moreover, initial steps for implementing them are sketched, such as abolishing the division of lines in the regulation of (private) insurance, freeing health insurers from any-willing-provider clauses, refraining from imposing uniform nationwide fee schedules, and directly subsidizing poor consumers for buying health insurance rather than institutions such as hospitals and homes for long-term care.