Resource title

Public Sector Centralization and Productivity Growth: Reviewing the German Experience

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Resource description

The paper examines the role of the vertical structure of the public sector for economic growth in Germany in a long?term perspective. A theoretical model shows that, due to spillover effects of public service provision across lower level governments, federal government activities could have substantially contributed to productivity growth. A review of the German experience starting in the last quarter of the 19th century shows that the overall development is consistent with a stimulating role of the federal government in general and in specific areas like, for instance, transport and communication. However, a further empirical analysis of the period after World War II raises doubts about the efficiency of the vertical structure of the public sector with regard to productivity growth, since the results indicate that a smaller budget share of the state level would have benefited growth.

Resource author

Dan Stegarescu, Thiess B├╝ttner, Alexej Behnisch

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24803

Resource license

Adapt according to the presented license agreement and reference the original author.