Geographia Polonica (2000) vol. 73, iss. 1

Major disputes on the methods of calculating local expenditure needs. A case study for large German cities

Chang Woon Nam

Geographia Polonica (2000) vol. 73, iss. 1, pp. 77-94 | Full text

Abstract

Due mainly to rapidly diversifying and expanding urban activities in an en-larged Europe and also partly to the continued decrease in local tax revenue in recent years, large German cities are currently suffering from the lack of financial means to cover increas-ing expenditure needs. In this context, they argue that the German-style method of intergov-ernmental fiscal transfer and resource allocation applied in practice do not adequately con-sider the particular socio-economic conditions in large cities. This study compares the Ger-man way of measuring local expenditure needs with other empirical methods implemented in countries like Norway and Japan and introduces its reform alternatives. Additionally the study examines some significant socio-economic determinants from the point of view of the large German cities.

Keywords: local expenditure needs, Germany, large cities, socio-economic determinants for urban development

Chang Woon Nam, Ifo Institute for Economic Research, Poschinger Str. 5. 81679 Munich, Germany