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Financial Relations between the German government

Author: LuoXiangHeng
Tutor: TanRong
School: Nankai University
Course: Administration
Keywords: Germany Intergovernmental fiscal relation The tax-sharing system The fiscal balance system
CLC: F815.16
Type: Master's thesis
Year: 2009
Downloads: 295
Quote: 2
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Abstract


The Intergovernmental fiscal relation is highly concerned among considerable countries in the contemporary world, the thesis aims to explore the intergovernmental fiscal relation between federal, state and local governments in the form of cooperative federalism and functional federation.The priorities of German financial system are the tax-sharing system and the fiscal balance system, which were gradually improved by conflicts and consultations among federal and state governments for a long time. The federal government takes certain advantage to the states by means of fiscal resources, at the same time the states always influence the fiscal policies of the federal agency when proper chances come. The German intergovernmental fiscal system makes up communications between governments under the constitutional decentralization framework so effectively, and also lays the foundation for the interdependent mode. Otherwise, the local government deeps in disadvantage status in forms of resource allocation, fiscal negotiation and interest exchange which results in the local government nearly have been neglected.The fiscal planning committee regards as the intergovernmental fiscal relatio’ns coordination system guaranties communication and cooperation between all level of governments, and consolidates the intergovernmental relationship of being interdependent. German cooperative federalism has formed intergovernmental network no matter of vertical or horizontal, indeed the fiscal relation coordination mechanism plays an important role as financial cabinet.Since 90s, the priorities of German fiscal system’s reform are the transfer payment for eastern region and the fiscal balance system between states. At the same time, in order to release the fiscal tension between governments, the social security system, structure of government and administrative region have been reformed gradually.In practice, the German intergovernmental fiscal relation is influenced by these factors, such as constitutional mechanism, law-making process, party politics, regional division and economic situation. Because of them, any attempt to change the fiscal system fundamentally is impossible. Therefore no possibility is existing of the transition for the cooperative fiscal decentralization system to competent mode. Takes into account of the tradition and strength, local government still lies in the disadvantage status among the intergovernmental relationship.

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CLC: > Economic > Fiscal, monetary > Finance, the state's financial
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