actually favors stabilization. In an empirical analysis for Germany, the paper adds support for the finding of significant … regional stabilization by fiscal flows. The results indicate that about 17 % of GDP variation across West Germany's states has … been removed by fiscal flows during the last two decades. Thus, in Germany where the fiscal federalism is criticised for …

government will enhance efficiency. A system of redistributive grants among governments is introduced into a standard model of … in Germany. The results suggest that attempts of state level governments to extract fiscal resources from the local …