Band 58, Heft 2

In the German system of fiscal equalization Länder (States) with tax revenue below the average get payments from the Lander above the average. The difference between the average and the own tax revenue per capita will be compensated up to 75 %. To prevent Länder from getting payments form other Länder by lowering their own tax rates and to get the right information about their ability to pay, the revenue of taxes with taxing autonomy is standardized. But Länder could also influence their tax revenues by the number of holidays, each Land decides on its own. A Land with many own holidays will get lower tax revenues and higher payments in the fiscal equalization system than the same Land with no extra holidays. To collect the real ability to pay of the Lander in the fiscal equalization system, it is necessary to eliminate the effect of the different number of holidays. This paper shows an approach to neutralize this effect and calculates its impact to the payments of each Land in the fiscal equalization system.

The Joint Task “For the Improvement of the Regional Economic Structure” is one of the most important instruments of the German regional policy. This instrument is applied in regions with strong structural problems and aims to reduce unemployment. The instruments institutional framework demands the creation of additional permanent posts. This paper explores that these requirements can provoke inefficient combinations of production factors. The reasons for that problem can be seen in market failures as well as political disappointments. The government of each federal state has an incentive to demand permanent posts as much as possible because public revenue can equal the government expenditures after a relative short time period due to employment and production effects. The institutional framework of the German financial equalization scheme between the federal states contributes to that problem too - the expenditures for subsidization can be balanced by perequations paid by the other federal states.

From Joachim Starbatty’s point of view the answer of many politicians to today’s economic crisis is deficit spending and protectionism. He declares that these are typical keynesian tools - which are - even in Keynes’ theory - only suitable in special circumstances and argues that the actual economic crisis is no Keynesian crisis. The actual lack of demand was predominantly caused by a problematic US monetary policy, not by a lack of marginal efficiency of capital. Keynesian tools cannot solve the crisis and risk to even worsen the situation in different ways. Karen Horn represents the opinion that the global financial and economic crisis has brought about a shift in the relative importance of government and market as well in terms of scope as in popularity. She says: The dichotomy may however seem overstated: both politics and the market are no more than evolved arenas for the social interaction of fallible humans. The crisis just demonstrates the natural failures and limitations of both more clearly than ever. But this is precisely the reason why social processes should become freer discovery procedures allowing for a dynamic generation of new knowledge. The precautionary principle recommends more active government focus on the rule level and clear limits of state action elsewhere in order to prevent a ratchet effect of intervention. In politics, a slippery slope leads directly from pragmatism to constructivism. Gustav Horn addresses the question if and under what conditions economic policy should intervene with markets during an economic crisis. He explains that two different forms of interventions are distinguished: A macroeconomic and microeconomic intervention. Their mutual impact is discussed and a theoretical macroeconomic approach of de Grauwe is used to derive a theoretical foundation. The conclusion is that at a time of crisis both macroeconomic interventions as well as microeconomic interventions that serve to stabilize production of a public good are appropriate. Not appropriate is a state intervention for purely microeconomic reasons.

Due to labor market reforms in Germany some years ago, the incentives to work changed. The paper analyzes the effects of the reforms on the reservation wages for specific groups. The replacement rates implied by the system of unemployment benefits and by the rules of means-tested social assistance are investigated in detail. In addition, the paper describes the development of the replacement rates in the recent decades. It turns out that the replacement rates increased in the period 1950 to 1975. Thereafter, the rates for the specific groups developed differently. However, in 2008 the rates are higher than they had been in the fifties and the sixties.

Individual well-being is mostly measured by income so that non-monetary dimensions are not accounted for. To complement the analysis of wellbeing, survey-based data concerning satisfaction with life and happiness are used. These surveys include variables like health, social capital, regulation density and job security. An international comparison shows that the perceived job security is significantly lower in Germany than in many other European countries - even though the government aims to foster job security via regulatory measures like strict employment protection legislation. Contrary to political intention, the survey suggests that tight regulation does not correspond with a high degree of perceived job security. The latter seems to be stronger influenced by indicators like labor market performance and individual qualification. Zusammenfassung Zur Beurteilung der individuellen Wohlfahrt wird oftmals auf Einkommensgrößen zurückgegriffen. Nichtmonetäre Bestimmungsgründe des subjektiven Wohlbefindens bleiben dabei außen vor. Diese Lücke sollen Befragungen zur Lebenszufriedenheit schließen, die von Faktoren wie Gesundheit, soziale Beziehungen und Vertrauen, aber auch von staatlichen Regulierungen und der empfundenen Arbeitsplatzsicherheit beeinflusst wird, wie ein internationaler Vergleich zeigt. Diskretionäre staatliche Eingriffe in Form von Regulierungen sind negativ, gute ordnungspolitische Rahmenbedingungen sind hingegen positiv mit der Lebenszufriedenheit korreliert. In Deutschland ist zudem die empfundene Arbeitsplatzsicherheit geringer als in fast allen untersuchten europäischen Ländern - obwohl der Gesetzgeber zum Beispiel über Kündigungsschutzregelungen versucht, diese Sicherheit zu erhöhen. Höhere Regulierung trägt entgegen der Intention jedoch nicht zu mehr Arbeitsplatzsicherheit bei, sondern wirkt diesem subjektiven Sicherheitsempfinden vielfach entgegen. Wichtig für die subjektive Arbeitsplatzsicherheit erweisen sich in einem Ländervergleich eher die generelle Arbeitsmarktsituation und das individuelle Qualifikationsniveau.