Starting from the economic theory of federalism, this chapter surveys the development of EU revenue, spending and off-budget activities, discusses the redistributive impact of EU finances on member states, and budgetary decision-making procedures. The analysis is guided by a political economics...

Recent empirical literature has shown that the determination of intergovernmental grants is highly influenced by the political bargaining power of the recipient states. In these models federal politicians are assumed to buy the support of state voters, state politicians and state interest groups...

The advantages and disadvantages of fiscal federalism are widely discussed in economics and political science. While some authors argue that federalism favors individual initiatives and serves as a market preserving device, others emphasize the dangers arising from an increasing corruption and...

In this paper, German federalism is analysed with respect to its implications for public spending and revenue. Since the Second World War, taxing and spending competencies in Germany have become more and more centralised. This is demonstrated with respect to (1) changes of the power to tax, (2)...

The distinct characteristic in James Buchanan’s thinking about federalism in contrast to the traditional theory of fiscal federalism is his view about fiscal competition. In this paper, it is demonstrated that this thinking went through three stages. From the 1950s to the beginning of the...

Most countries pay substantial intergovernmental transfers to poor regions. Since these transfers are often paid with the aim of achieving regional convergence, they should have a positive effect on economic growth. However, it is equally possible that transfers perpetuate under-development by...

Spätestens bis Ende 2019 müssen die Finanzbeziehungen zwischen Bund und Ländern neu geordnet sein. Der Solidarpakt II und die Regelungen des Länderfinanzausgleichs laufen zu diesem Zeitpunkt aus. Hinzu kommt das Neuverschuldungsverbot für die Länder ab dem Jahr 2020. Die Politik ist daher...