Fiscal Federalism and Risk Sharing in Germany: The Role of Size Differences

WZB Markets and Politics Working Paper No. FS IV 01 – 20

22 Pages Posted: 22 Aug 2011

See all articles by Kai A. Konrad

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Helmut Seitz

Dresden University of Technology - Institute for Applied Public Finances and Fiscal Policy; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 1, 2001

Abstract

We study the effect of size differences for an optimal risk sharing system of intergovernmental transfers in Germany. The German fiscal transfer system should account for the fact that an optimal insurance mechanism has the property that smaller states contribute a smaller share of their tax revenue to the redistribution mechanism.

Keywords: Fiscal federalism, risk sharing, size asymmetry

JEL Classification: D70, H41, H77

Suggested Citation

Konrad, Kai A. and Seitz, Helmut, Fiscal Federalism and Risk Sharing in Germany: The Role of Size Differences (November 1, 2001). WZB Markets and Politics Working Paper No. FS IV 01 – 20 , Available at SSRN: https://ssrn.com/abstract=1914361 or http://dx.doi.org/10.2139/ssrn.1914361

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

Helmut Seitz

Dresden University of Technology - Institute for Applied Public Finances and Fiscal Policy ( email )

Helmholtzstrasse 10
D-01062 Dresden
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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