Category Archives: Economics

Bundeshaushalt kann noch transparenter werden (OBS 2015 veröffentlicht)

Vor wenigen Wochen wurde von der International Budget Partnership (IBP) der zweijährliche Open Budget Survey 2015 für Deutschland veröffentlicht. U.a., Moderne Verwaltung und die Open Knowledge Foundation haben berichtet. Auch wenn Deutschland für seinen Bundeshaushalt wie in den Vorjahren befriedigende Werte erhält, gibt es doch seit Jahren kaum Veränderungen und weiterhin Potenzial nach oben, um zur Spitzengruppe um Länder wie Neuseeland, Schweden und Südafrika aufzuschließen.

Während grundlegende Haushaltsinformationen verfügbar sind, sehen die Experten von der IBP Möglichkeiten zur Verbesserung v.a. in drei Bereichen: Transparenz, Kontrolle und Partizipation. Ein Bericht auf Englisch über die Situation ist Deutschland ist hier verfügbar. Continue reading

A bright(er) outlook for Europe after the Euro-crisis

The European Union surely has had better moments. What first entered centre stage with some troubling fiscal gaps in Greece’s budget in late 2009 has now turned into a much more sustained challenge for the continent itself – and equally for the rest of the world. However, things are still undecided. At this time people can probably argue with equal justification that we are nearing the end of the downward spiral or that things continue to get much worse if and when a Euro-zone break-up eventually occurs.
I tend to be an optimist and I am convinced that within a few years things will become better than they were before the crisis. This essay sets out the justification for my optimistic perspective and, if realised, what repercussions the optimistic evolution would have for Europe and the rest of the world. It will look at a ‘return of Europe’ and will suggest the implications it has on three dimensions, namely the economy, Europe’s role in the world and the evolution of its identity. These three dimensions shall be analyzed along a chronological perspective, starting with the origins of the crisis and the structural context, recent and current developments with a lasting impact on Europe and eventually an outlook of Europe’s perspectives beyond 2014.

It wasn’t us…
Since the global financial crisis hit Europe, the prevailing narrative Continue reading

Japan’s future may be bleak – but not so bleak after all

In mid/late February I had the chance to join a 9-day study trip organized by my university to go to Japan. It was my first visit to the country and here are some thoughts on the economic prospects of Japan:

When I was a child (that was at the turn of the 80s and 90s), people in Germany (and I guess elsewhere) used to smile over the weird Japanese tourists who traveled 8 European cities in 6 days. Today the Japanese tourists are hardly realized among increasing shopping tourism from China. But China is not only flooding European shopping streets with its newly-rich, it has also become a point of attraction for ambitious young students as a destination for internships, studies and a possible career. In the meantime Japan appears to have disappeared somewhere in the Asian nirvana. I guess its image (if there is any) is to be some sort of a rich and friendly country. But it is not really known as the place to be (like China) nor for anything else really. The slightly more informed person will know that Japan’s prime minister changes every few months (making it even harder to remember anything about the country) and it somehow manages to get credit even though it has had higher debt levels than Greece or Italy. While China is rising, Japan simply does not seem to take place in Europe anymore. For those few public policy Continue reading

How Eurobonds are the way forward

Market pressures on ailing Euro-zone countries persist and the Merkels and Sarkozys struggle to find an answer. The latest hype gaining ground is the idea of Eurobonds. These would be jointly issued bonds by all Euro-zone (or even EU) governments to finance government debt by national (or sub-national) governments.

Ironically, I remember several interesting discussions with my Italian federalist friends who have always lobbied within JEF and UEF to support the introduction of Eurobonds – to allow the EU (budget) to run deficits primarily for EU-wide infrastructure projects. I have always (and continue to) oppose this idea because I think we do not need another layer of debt  in the EU while there is sufficient room for mobilising funds to invest in EU-wide infrastructure projects from the ineffective CAP and structural policy – and where necessary also from national coffers. While the financing mechanism for these Eurobonds would be the same, the current discussion is promoting Eurobonds on a very different level.

Eurobonds to solve the debt crisis

Eurobonds as advocated these days are seen as a tool to lower borrowing costs for peripheral Eurozone countries (Greece, Ireland etc.) who struggle with run-away interest rates on newly issued debt. They are practically cut off from the market, hence EU intervention mechanisms like the EFSF are now used to finance their debt. In some ways the EFSF is not so much different from the Eurobonds discussed today except the fact that the EFSF is primarily seen as a crisis intervention – and not a permanent – vehicle. Because (just like with the EFSF) Eurobond debt is guaranteed by countries like Germany or the Nordics borrowing is cheaper for such jointly guaranteed Eurobonds. So, why should we not issue Eurobonds Continue reading

Holding governments accountable

The Open Budget Index (OBI) for the year 2010 assessed 94 countries from around the world in terms of their budget openness and accountability. The drive was coordinated by the International Budget Partnership, a Washington DC based independent think-tank.

Of the 94 countries reviewed, only 24 yielded satisfactory results when it came to maintaining a transparency in their budgets. Despite some notable improvements, many of the countries surveyed have numerous milestones to achieve. The situation in Southeast Asia is even more worrying as none of the seven countries surveyed achieved a satisfactory score (i.e. at least 60 out of a possible 100 points). Singapore was, however, not included in the recent survey.

The importance of budget transparency for democratic, economic and social development

Transparency is a central theme of the good governance discourse. For economic and social development, in particular in a transitional/developing region like Southeast Asia, access to and information about budgets can make a real difference to citizens’ lives Continue reading

Europäische Wirtschaftsregierung – Kampfbegriff oder föderale Vision?

„European Monetary Union“ oder „Economic and Monetary Union“?

Schon lange wird die EU von vielen als Projekt wirtschaftlicher Integration wahrgenommen. Wohl nicht nur aus diesem Grund forderten linke Europapolitiker/-innen erst im vergangenen Europa-Wahlkampf als vermeintlichen Ausgleich das „Soziale Europa“. Nach den großen Vertragsänderungen zur Einführung der Einheitlichen Europäischen Akte (Mitte der 1980er) und dem Maastricht Vertrag (Anfang der 1990er) fragt man sich heute allerdings, warum wir auf einmal so tun, als sei eine „Europäische Wirtschaftsregierung“ etwas Neues. Haben wir nicht schon lange eine europäische Wirtschaftspolitik, die gerade auf europäischer Ebene gestaltet wird? Und hat diese Wirtschaftspolitik etwa keine „Regierung“?

Europäische Wirtschaftsregierung heute ist vielfältig – und inkonsequent

Wer glaubt, wir würden beim Thema Wirtschaftsregierung in der EU bei Null anfangen, scheint die EU nicht zu verstehen. Schon heute gestaltet die EU zentrale wirtschaftliche Fragestellungen über den Binnenmarkt, die Verbraucher- und Umweltpolitik, über den Energiemarkt, über den Handel, über sensible Politiken wie Landwirtschaft und Fischerei aber auch über die Wirtschaftsförderung („Regional- oder Kohäsionspolitik“). Hier besitzt die EU besondere Kompetenzen, während Continue reading

Poor results of budget transparency around the world

Over the last year I have been working on one of the most interesting global transparency projects – the Open Budget Index. A few weeks back the final results have finally been published after our lengthy review process. Unfortunately, these results shed a disappointing light on government approaches around the globe: 74 of our 94 countries surveyed fail to meet basic transparency standards! This means that normal citizens cannot obtain even the most basic information on their national budgets. Find more information on the findings on the project website.

With the index we look at 123 indicators in public budgets and primarily check the availability of key budget documents like the executive’s annual budget proposal as well as the quality of the data they include. Other questions are concerned with access to documents, the openness and involvement of legislatures or the quality of other budget institutions like auditors. 91 of these indicators make it into the final score. You can find the ranking of all 94 countries here.

Three findings are particularly interesting I think: Firstly, the state of budget transparency does not rely on a country’s state of economic development. South Africa as the overall top scorer illustrates this best. Secondly, the ‘resource curse’ is a phenomenon we tend to support with our findings. Countries highly dependent on hydrocarbons also have lower scores in our index. Thirdly, with data over three periods now (2006, 2008, 2010 – and 2012 beginning to be in the making) we can observe that budget transparency is not a static process and that in particularly countries with poor or mediocre performances do start to move. Countries like Liberia or Mongolia have shown a positive and strong upward trend thanks to clear political leadership. Others like Fiji, following a coup, show a downward trend. This, if nothing else, shows very clearly, how budget transparency is a political process and many governments around the world can and need to do much more to empower their citizens when it comes to the most important policy document of any country – its budget.

Rich data sets with answers to all questions are available for further research. You can obtain them either from the website or through me or the facilitators at IBP in Washington DC. We are grateful for any hints on anyone who researches or works on budget transparency. Do get in touch!

The schizophrenia of some business leaders

In my reading for a paper on voluntary environmental stewerdship I have  come across this classic article by Milton Friedman “The Social Responsibility of Business is to Increase its Proft” (New York Times Magazine, 1970). The following passage reminds me of many of Germany’s industrial barons from the old dirty industries who tend to be overrepresented in industrial associations and politics:

I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely far-sighted and clear-headed in matters that are internal to their businesses. They are incredibly short-sighted and muddle-headed in matters that are outside their businesses but affect the possible survival of business in general. This short-sightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally controlled system than effective governmental control of prices and wages.

Merkels Atompolitik jetzt attackieren

Gestern kam es zum Showdown der Bundesregierung beim Thema Atomenergie. Ausnahmsweise scheint es nach Monaten des Streits dazu einmal Einigkeit unter den drei Koalitionspartnern gegeben zu haben. Wie Spiegel Online zu entnehmen ist, sieht die “Loesung” vor, den weichen Atomkompromiss von Rot-Grün noch einmal zu verwässern. SpOn fasst die Eckpunkte wie folgt zusammen:

• Ältere Kernkraftwerke sollen eine längere Laufzeit von 8 Jahren erhalten
• Jüngere Meiler bekommen sogar ein Plus von 14 Jahren
• Stromkonzerne sollen Öko-Energie mit 15 Milliarden Euro unterstützen.

Wenn alle Parteien, die es mit ihrer Kritik an der Atomenergie ernst meinen, wirklich ein Zeichen setzen wollen, dann müssen sie nicht nur “Verfassungsklage” brüllen, sondern klar sagen, was sie nach einer eventuellen Machtübernahme, die ja spätestens 2013 stattfinden wird, tun werden.

Auf Grund der Schwere des Vertrauensbruchs durch die Energiekonzerne (man führe sich noch einmal deren Continue reading

France and German tax systems, EU cooperation

After visiting German finance minister Wolfgang Schäuble, French budget minister Francois Baroin comes up with some weird comments on Franco-German tax cooperation and the EU budget according to the EUobserver. Firstly, he recognises a broad consensus for deficit reduction in Germany. Apparently the impression most people have of France is that they like to run excessive budget deficits and do not have their budget in order. What is interesting here is that this picture of stark contrast is not really met in reality. France – just like Germany – has the highest credit ratings (i.e. paying the lowest rates on its debt because people see long-term value and not a debt swamp). Its business cycle broadly matches the German over the last 10-20 years but with obvious short-term divergences as we can witness these months. At the same time the French budget system itself is much more modern than the German, having Continue reading