Fiscal Policy and Local Self-Government

We support policy makers in our partner countries in the selection of fiscal policy instruments and the development of efficient financial management.

The reform of fiscal policy and tax administration constitutes an important aspect of state modernisation and is indispensable for the performance of the state and its institutions. Essential policy decisions require a reliable financing basis, which in turn presupposes a functioning and efficiently operating tax administration.

Fiscal policy measures represent a central economic policy steering instrument. Hence, they are of outstanding importance in economic policy. Berlin Economics advises on the establishment of a modern tax administration and targeted fiscal policy measures.

References

Local Administration Reform – Experience from Germany and Ukraine

This study, conducted by the former Prime Minister of Saxony and BE expert Dr Georg Milbradt, compares the administrative reforms implemented in the former GDR and Ukraine after the end of communism.

After 1989/90, the former states of the Eastern bloc often had to struggle with similar problems in the administrative field, as they were all characterised by a strongly Soviet-centralist administrative model that left little room for local self-administration and autonomy. In the course of the 1990s and early 2000s, however, the Länder developed differently. While the new federal states in East Germany adopted essential elements of West German fiscal federalism and implemented decentralisation reforms early on, the centralised state structure in Ukraine proved more persistent, even though Ukraine was one of the signatories of the European Charter of Local Self-Government. Serious reforms and the provision of municipalities and local authorities with reliable financial resources only came about in the course of the so-called “Orange Revolution” in 2004.

This Technical Note analyses in concise form the background to these different developments.

Full Technical Note