Volume 4, Issue 2

This is a comment on a ranking of German economics departments published by a semi-official institution, the Center for Higher Education Development (CHE). It is shown that the CHE ranking is highly misleading because the publication output is not weighted according to quality. The CHE ranking is compared to the results of four recent ranking studies commissioned by the European Economic Association (EEA) and an earlier ranking of German, Austrian and Swiss economics departments. For the readers from Austria and Switzerland we include in the appendix a 'sneak preview' of the 'EEA rankings' which includes the top-ranked Austrian and Swiss departments.

In the wake of the USA's refusal to ratify the Kyoto agreement on curbing greenhouse gas emissions, this article pledges for a national energy policy beyond Kyoto, based on local external effects stemming from the combustion of fossil fuels. Due to varying external effects a national policy will differentiate energy taxes between fuels. Using Swiss estimates of external effects, it is shown that a national policy would fulfill the Kyoto goal as a secondary benefit. Moreover, a nationally based fossil fuel policy would affect the scope for an international trade of CO2 emission rights, as a net-buyer of emission rights will lose from participating in such a trade.

We assess the design of the recent environmental tax reform in Germany. Based on fundamental welfare economics we argue that extensive tax reductions and rebates in favour of energy-intensive industries, as provided by the tax reform, substantially water down its cost-effectiveness. The environmental tax reform essentially boils down to a fiscally motivated fuel tax. From a political economy perspective the exemptions can be explained by voters' low willingness to pay for the environment and the sectoral concentration of adjustment costs. With respect to green voters, however, the government does not admit that the environmental objective has effectively been abandoned. We conclude that an honest policy should either give up the environmental tax reform frankly or implement it without exemptions .

A first systematic, model-based analysis of the environmental fiscal reform in Germany is undertaken with an econometric model and an empirical general equilibrium model. It indicates moderate but slightly positive effects on employment, energy consumption and CO2 emissions. The influence on economic growth is very low; employment is growing slightly, while energy consumption and CO2 emissions are decreasing. The sectoral development shows no universal pattern for a structural change to the dis advantage of energy intensive industries and to the benefit of labour intensive branches. The effects on personal income distribution, estimated with a micro simulation model, are moderate. The environmental fiscal reform could play a larger role in climate protection. Weaknesses of the previous concept should be removed gradually.

The fiscal constitution governs the federal system and thus the competition among member states. In Switzerland tax competence and spending decisions are highly decentralised. In order to make such as system operational an intergovernmental transfer system is needed. Today it does not work in a satisfactory manner, however. In particular, the autonomy of the cantons is in danger. Therefore, the federal government and the cantons have commonly decided to launch an ambitious reform programme. The so-called "new fiscal equalisation system" includes the decentralisation of public tasks, the reorganisation of the vertical and horizontal co-operation among jurisdictions and the equalisation of fiscal resources and burdens. Zusammenfassung Finanzausgleich und Föderalismus sind eng miteinander verbunden. Die Finanzordnung regelt das föderale Zusammenleben und damit den Wettbewerb unter den Gliedstaaten. Die Schweiz hat sich für eine weitgehend dezentrale Kompetenzverteilung von Staatsaufgaben und Steuern entschieden. Neben Vorteilen bringt dies auch Probleme mit sich. Aufgabe des Finanzausgleichs ist, diese Probleme zu verringern, ohne dass die Vorteile verloren gehen. Der heutige Finanzausgleich der Schweiz weist diesbezüglich Schwächen auf: Allokations- und Umverteilungsziele werden vermischt. Die Autonomie der Kantone wird unnötig eingeschränkt. Als Folge zahlreicher Teilreformen der letzten Jahrzehnte ist das Transfersystem nicht mehr steuerbar. Unter der Bezeichnung "Neuer Finanzausgleich" ist zur Zeit eine grundlegende Reform zur Neuordnung der föderalen Finanzbeziehungen im Gange. Diese besteht aus einer Aufgabenentflechtung, der Neuregelung der vertikalen und horizontalen Zusammenarbeit im Bundesstaat sowie einem gezielten Ressourcen- und Belastungsausgleich. Noch offen ist, wie die Reform im Interesse eines lebensfähigen Föderalismus langfristig institutionell gesichert werden kann.

The article examines the fiscal crisis in Berlin that is associated with high public debt, which amounts to about twice the annual budget volume. Currently there is an intensive discussion whether there should be a bailout in favour of Berlin, that is, whether the federal government should provide special funds to Berlin in order to support Berlin in coping with the high public debt. It is argued that Berlin can cope with the high public debt if the city runs a restrictive fiscal policy in the next ten years. In addition we ask which institutional and constitutional changes are required in order to prevent state governments in Germany from accumulating high public debt.

This articles reviews the arguments for consumer protection policies by the government by referring to the Nobel prices on asymmetric information problems. It discusses criteria for assessing the empirical importance of lemons goods and comments on the relative merits of quality constraints and the provision of information. Particular emphasis is placed on the question of whether consumer protection policies could survive unbridled systems competition among the EU countries, and a negative answer is provided. To counteract such an outcome, a national policy of monitoring, assessing and publishing product qualities is recommended.