Centralizing Tendencies in the Public Sector in Germany

39 Pages Posted: 10 Aug 2005 Last revised: 20 Aug 2008

See all articles by Dan Stegarescu

Dan Stegarescu

Center for European Economic Research (ZEW)

Date Written: 2005


This paper investigates the long-term trend and the underlying determinants of public sector centralization in Germany from 1871 until today. The institutional and the quantitative review of the German history provides no conclusive evidence for a continuous process of government centralization as suggested by Popitz law, but rather for some distinct developments caused by the effects of wars and regime changes. Accordingly, whereas the role of the central government increased continuously at the expense of the state governments until World War II, after 1950 the state level regained importance. An empirical analysis for the period 1950 to 2001 reveals a significant decentralizing effect of per capita income growth, but provides no clear evidence for a causal relationship between economic and European integration and fiscal decentralization in the case of Germany.

Keywords: Public Sector Centralization, Popitz Law, Determinants of Centralization, Germany

JEL Classification: F15, H72, H77

Suggested Citation

Stegarescu, Dan, Centralizing Tendencies in the Public Sector in Germany (2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-046, Available at SSRN: https://ssrn.com/abstract=774725 or http://dx.doi.org/10.2139/ssrn.774725

Dan Stegarescu (Contact Author)

Center for European Economic Research (ZEW) ( email )

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