Fiscal implications of central places for municipal budgets. Empirical results from Germany.
Richter FRAUKE, University of Greifswald, Germany
Daniel SCHILLER, University of Greifswald, Germany
The German Spatial Planning Act stipulates the creation of "equivalent living conditions in all sub-regions" as a task and guiding principle of spatial planning (§1 ROG). Municipalities are key actors for the provision of public services in Germany. In order to ensure self-government and local authority of municipalities, an adequate financial basis is a prerequisite.
The concept of central places is regarded as a key spatial planning instrument for ensuring the provision of public services in all sub-regions. In its 2016 resolution, the Ministerial Conference on Spatial Planning (MKRO) emphasizes the importance of central places for infrastructural location decisions, especially in regions with a shrinking population. A particular challenge arises from the fact that central places provide services not only for their own inhabitants, but also for inhabitants of surrounding catchment areas, who are not paying taxes in the central place. As a result, fiscal symmetries (external effects) may arise between municipalities.
The main questions of this paper is to show whether and to what degree the status of a central place has a fiscal impact on the municipal budget. Bivariate and multivariate models are used to control for other influencing factors on financial needs, e.g. peripherality of the location, tax base, etc. Furthermore, our concern is to discuss possibilities to balance the provision of public services, especially in central places, with the help of fiscal policy instruments (e.g. fiscal equalization systems among municipalities).
For the provision and costs of public goods and services, market approaches fail to fully explain the underlying mechanisms. By using conceptual approaches from the fields of economic geography, planning, regional economics, public administration and related disciplines, we derive hypotheses, which are tested with data from annual accounting statistics of municipalities from the five federal states in Eastern Germany over four years.
Mots clés : local finance|public services|central places|peripheral regions|empirical results
A103608FR