Volume 57, Issue 2

In Germany there is a discussion on the design of regional policy, whether cohesion is still appropriate or should be replaced by a regional growth policy for efficiency reasons. This discussion is most notably founded with theoretical arguments from the new growth theory as well as the (empirical) insight that despite an extensive redistribution of wealth regional differences still exist. Crucial for the effectiveness of cohesion measures is the development of regions in the long run, whether regions converge or diverge. From German convergence studies it follows that there is a tendency for convergence. Our empirical analysis gives empirical evidence that the Commontask “Improvement of Regional Economic Structure” has an influence on the convergence process.

The question how much money society should pay to persons without own income (i. e. the social minimum; in Germany called “Regelsatz”) has been debated extensively in Germany. A complicated procedure has been developed to derive the social minimum from the typical consumption of average lower income persons. Although the procedure as a whole is not unreasonable, it includes several standardised components which have been the cause of severe criticism and the reason for demands to raise the Regelsatz. The goal of this article is to determine the degree of consistency of the Regelsatz with the aims of the German social security system. We do not use the criticized “official” calculation procedure. Instead we start with the goals society has set to specify the social minimum. As these goals are formulated in an imprecise way we defined a “maximum case” and a “minimum case”. Then we deduce two baskets of goods consistent with those goals, respectively the two cases. Finally we determine the prices of all goods in the baskets using the actual cost of products in Germany. We find that the German Regelsatz is about 16 % above the amount consistent with the maximum case and is twice as high as the amount consistent with the minimum case.

Ernst Ulrich von Weizsäcker holds the view that the trouble with the energy- environment debate is that it typically circles around different modes of supplies with their respective environmental drawbacks. Rising demand for energy tends to be seen as an indisputable given. The fact hidden behind this assumption is the low price of energy (fig. 2). He is proposing a strategy of slowly but steadily rising energy prices (if necessary rising by state intervention). The slope of the rise should be equivalent to the slope of rising energy productivity, thus avoiding social hardship. In view of that trajectory of steadily rising energy prices, investors, infrastructure planners, and consumers will strategically move into energy efficiency and productivity gains, thus accelerating the process. The historical twenty-fold rise of labour productivity, in parallel with labour cost (fig. 3), may serve as a model for the proposed trajectory. Hubertus Bardt considers that in recent years rising energy prices and discussion of the contribution of energy generation to climate change have increasingly focused public interest on energy savings. This applies both to private households and to companies, especially those in manufacturing industry. Overall Germany has made considerable progress in the efficient use of energy in recent decades and today can be considered one of the most energy-efficient of the industrialised countries. As well as government policies, such as promoting research, creating a regulatory framework and using market-based instruments, private initiatives also have a role to play if energy efficiency is to be systematically improved. The cost of energy is incentive enough for the private sector to cut consumption without centralised regulation. Market forces will have the desired effect. There are ongoing debates, however, about the state using additional instruments to achieve even higher savings targets. Even if energy savings can help to cut variable costs, it cannot be taken for granted that such additional government instruments will have a positive effect on the economy as a whole. Claudia Kemfert also emphasizes that energy policy is becoming more and more important. Energy supply should be secure, climate friendly and cost efficient. These three goals - competitiveness, climate protection and energy security - need to be equally fulfilled. However, these three targets are not always complementary but conflictary, as it can be seen in Germany right now. In Germany, old coal fired power plants need to be replaced and in addition nuclear power is phased out. The main energy policy dilemma reveals the question whether Germany´s climate protection goals can be reached if no nuclear power is applied and no new coal power plants will be build. Germany needs to establish an energy ministry which brings all different goals and interests together and develops a long term energy policy strategy. She points out that in order to guarantee energy security, such an energy ministry should be able, if necessary, to regulate and pose new power plants and infrastructure.

The main topic of the paper is an explanation of the level of agricultural protection in industrialized countries and middle income countries. Concerning this, empirical regression models are presented in order to identify political and economic determinants of the level of agricultural protection in a country. These models are based on a cross-section of several OECD-countries. In this context, the theory of the political economy of agricultural policy is also considered. Apparently, several exogenous variables have an impact on the amount of support transfers to the agricultural sector, such as structure of exports, level of urbanisation and proportion of agricultural employees in total number of employees Zusammenfassung Das wesentliche Ziel der hier vorgestellten Untersuchung ist eine Erklärung des Umfangs der Agrarförderung in Industrie- und Schwellenländern. Im Hinblick hierauf werden anhand empirischer Regressionsmodelle maßgebliche Einflussfaktoren für das Ausmaß der Agrarstützung in unterschiedlichen Ländern aufgezeigt. Dies geschieht anhand von Länder-Querschnittsmodellen, die auf Daten aus ausgewählten OECD-Staaten basieren. Die hierbei zugrundegelegten Kausalhypothesen basieren auf Überlegungen aus der ökonomischen Theorie der Politik. Aus den Regressionsergebnissen wird deutlich, dass zahlreiche agrarökonomische bzw. gesamtwirtschaftliche Variablen einen erheblichen Einfluss auf die Agrarpolitik ausüben. Anzuführen sind hier beispielsweise der Anteil der Landwirtschaft an den Erwerbstätigen, der Verstädterungsgrad oder die Außenhandelsstruktur eines Landes.

Due to a decision of the German supreme court the current system of evaluating assets within the inheritance tax is unconstitutional. It is shown that it is not only the way of evaluating but the whole current system that lacks a solid fiscal systematic and economic fundament and might be therefore itself unconstitutional. In order to avoid these problems, the article suggests to abolish the inheritance tax and to raise the income tax in order to achieve tax revenue neutrality.