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Legislative Malapportionment and the Politicization of Germany's Intergovernmental Transfer System

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Abstract

Legislative bargaining theory suggests that fiscal transfers among member states of a federation are determined to a substantial degree by political representation effects. Malapportionment of the states'population in the legislature is claimed to lead to disproportional benefits of overrepresented states. The article analyzes empirically the determinants of funds in Germany's intergovernmental transfer system. The authors expand previous investigations to include the effects of both the bicameral system in Germany and the postreunification period. Using data for the period from 1970 to 2002, the authors find that malapportionment in the upper house leads to disproportional state shares of per capita transfers. Estimates also indicate that the impact of overrepresentation has somewhat increased over time. Disproportional representation in the lower house does not seem to matter, as the institutional framework of decision making in the lower chamber is not too supportive to constitute a bias towards overrepresented states.
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  • Hans Pitlik & Friedrich Schneider & Harald Strotmann, 2005. "Legislative Malapportionment and the Politicization of Germany's Intergovernmental Transfer System," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 254/2005, Department of Economics, University of Hohenheim, Germany.
    • Handle: RePEc:hoh:hohdip:254
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    Cited by:

    1. Ralf Hepp & Jürgen von Hagen, 2012. "Fiscal Federalism in Germany: Stabilization and Redistribution Before and After Unification," Publius: The Journal of Federalism, CSF Associates Inc., vol. 42(2), pages 234-259, April.
    2. Pablo Simon-Cosano & Santiago Lago-Peñas & Alberto Vaquero, 2014. "On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain," Publius: The Journal of Federalism, CSF Associates Inc., vol. 44(1), pages 135-156, January.
    3. Frank, Marco & Stadelmann, David, 2021. "More federal legislators lead to more resources for their constituencies: Evidence from exogenous differences in seat allocations," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 230-243.
    4. Valentino Larcinese & Leonzio Rizzo & Cecilia Testa, 2013. "Why Do Small States Receive More Federal Money? U.S. Senate Representation and the Allocation of Federal Budget," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 257-282, November.
    5. Imai, Masami, 2022. "Local economic impacts of legislative malapportionment," Journal of Urban Economics, Elsevier, vol. 131(C).
    6. Baskaran, Thushyanthan, 2013. "Coalition governments, cabinet size, and the common pool problem: Evidence from the German states," European Journal of Political Economy, Elsevier, vol. 32(C), pages 356-376.
    7. Sebastian Galiani & Iván Torre & Gustavo Torrens, 2016. "Fiscal Federalism and Legislative Malapportionment: Causal Evidence from Independent but Related Natural Experiments," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 133-159, March.
    8. Maria El Khdari, 2019. "Déterminants des transferts intergouvernementaux : le cas du Maroc," Post-Print hal-02137651, HAL.
    9. Maria EL KHDARI, 2015. "Déterminants des transferts intergouvernementaux : le cas des communes Marocaines," Working Papers 201531, CERDI.
    10. Alexander Fink & Thomas Stratmann, 2011. "Institutionalized Bailouts and Fiscal Policy: Consequences of Soft Budget Constraints," Kyklos, Wiley Blackwell, vol. 64(3), pages 366-395, August.
    11. Tiberiu Dragu & Jonathan Rodden, 2010. "Representation and regional redistribution in federations," Working Papers 2010/16, Institut d'Economia de Barcelona (IEB).
    12. Baskaran, Thushyanthan, 2012. "Soft budget constraints and strategic interactions in subnational borrowing: Evidence from the German States, 1975–2005," Journal of Urban Economics, Elsevier, vol. 71(1), pages 114-127.
    13. Jonathan Rodden, 2009. "Federalism and Inter-Regional Redistribution," Working Papers 2009/3, Institut d'Economia de Barcelona (IEB).
    14. Reingewertz, Yaniv, 2014. "Fiscal Decentralization - a Survey of the Empirical Literature," MPRA Paper 59889, University Library of Munich, Germany.
    15. Kóczy Á., László & Biró, Péter & Sziklai, Balázs, 2012. "Választókörzetek igazságosan? [Fair apportionment of voting districts in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1165-1186.
    16. Maaser, Nicola & Stratmann, Thomas, 2016. "Distributional consequences of political representation," European Economic Review, Elsevier, vol. 82(C), pages 187-211.
    17. Jonathan Rodden, 2009. "Federalism and Inter-Regional Redistribution," Working Papers 2009/3, Institut d'Economia de Barcelona (IEB).

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    More about this item

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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