Die föderale Ordnung in Deutschland – Motor oder Bremse des wirtschaftlichen Wachstums?

Abstract

Abstract This paper deals with the system of fiscal federalism (Finanzausgleich) in Germany and its effects on macroeconomic growth. The maze of both transfers from federal government to the states (vertikaler Finanzausgleich) and interregional transfers between the states (horizontaler Finanzausgleich) is revealed and how the growth rates of the GDP developed. Econometric analysis show the negative impact on growth. This is due to both vertical and horizontal redistribution because of the massive negative incentives of the system. States contributing to and even those obtaining from the current system could benefit from changes.