Enabling better policy making

The FiFo Institute for Public Economics at the University of Cologne unites top quality economic research with a straightforward "hands on"-approach to policy consulting. Our mission is to enable better policy making.

Primarily, we engage in all fields related to public finance, to urban economics and local finance, to environmental economics, and to questions of demographic change. We pursue these aims: By listening first. By providing the best information attainable. By answering the relevant research questions. By offering top-quality policy advice.

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The size of the government has a causal and positive effect on economic growth. In the new FiFo Discussion Paper 24-1, FiFo Policy Fellow Carsten Colombier uses a panel data set from 1880 to 2016 for 17 industrialised countries to show that the real world and growth theory do not always align. However, the positive growth effect is small and does not apply to any given kind of government spending. Obviously, it remains important to strengthen the efficiency and quality of public finances.


⁠Meeting the global Sustainble Development Goals seems increasingly out of reach. Their funding is too scarce and unreliable. How could additional financing sources - especially taxes - ensure those needs are fulfilled? What criteria should be taken into account? In a ‘Deep Dive’ at the Global Solutions Summit 2024 at ESMT Berlin, Michael Thöne discusses the prospects of the emerging concept with Quentin Parrinello, José Siaba Serrate and Christian Kastrop.


No matter what the future debt brake may look like, public budgets must be consolidated qualitatively in order to maintain fiscal sustainability and the power to govern. This also means cutting out old habits. ‘That means action. We don't have a knowledge problem,’ states Michael Thöne in the Handelsblatt cover story on the reduction of subsidies and tax breaks. If everyone has to swallow bitter pills, it becomes politically easier and 20 billion euros or more can be generated each year. Tagesspiegel, Focus, The Pioneer and Welt (paywalls in some cases) also report on this.


Demographic change, digitalisation and the climate neutrality goal are putting Germany's economy through a great transformation. Maintaining and strengthening our model of value creation is crucial - but not easy in times of increasing labour shortages. In the Böll Foundation's Economic Atlas, Michael Thöne writes that immigration, AI and smart, not reality-shy policy-making can be part of the solution. Listen to the podcast here.


The KDZ Centre for Public Administration Research has appointed Michael Thöne to its Advisory Board. The KDZ in Vienna is an institute that is as rich in tradition as it is forward-thinking, bringing together research and practice for excellent scientific policy advice. "I am very much looking forward to the deepened exchange with the KDZ and the other trustees from Austria, Switzerland, Germany and South Tyrol," says the FiFo Director, expressing his gratitude for the honour.


The survey "NRW.BANK.Fokus Kommunen" enters its second year. In addition to investments and climate change, this edition focuses on the retention of skilled labor. We warmly invite all financial decision-makers of the municipalities to contribute their perspectives through the survey. The results will be published in August 2024 in an anonymized research report.

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In spite of its strong starting position, the sustainability of public finances in an ageing Germany is at risk. FiFo Policy Fellow and one of the "Five Sages" Martin Werding, with Benjamin Läpple and Sebastian Schirner, conducted the calculations for the Federal MoF's 6th Sustainability Report. If policies remain unchanged, German public debt will more than double to 140% of GDP by 2070 in the best-case scenario and rise to a dizzying 345% in the worst-case scenario. FiFo Report 33 provides the calculations and possible solutions in the full version. 


The people in small towns identify strongly with "their" companies, the firms with "their" municipalities. Both often face the same challenges: Skilled labour, housing, local transport. Nevertheless, there is less co-operation than is possible and helpful. In an interview with LandInForm 1/24, FiFo project manager Eva Gerhards and GGR partner Martin Albrecht explain how this potential can be mobilised with "KOWIS - Cooperative urban development with a focus on business in small towns", a strategic concept developed as part of a BBSR project.


Modernisation of the government is as unpopular as it is unavoidable in the German public sector. However, in view of upcoming staff shortages, innovation and red tape reduction can become an opportunity for bureaucracy instead of a threat. In the interwoven multi-level state, modernisation is likely to encounter even more obstacles, as Michael Thöne explains in his presentation at the renowned Loccum Finance Days. But federalism, he points out, also offers more opportunities and fields of experimentation for innovative modernisation.

03 June 2024

Carsten Colombier

FiFo / Juni 2024 / Discussion Paper, FiFo-Köln

20 March 2024

FiFo Bericht Nr. 33

Martin Werding, Benjamin Läpple, Sebastian Schirner

FiFo/ März 2024/ Bericht, FiFo-Köln

FiFo-Bericht 33.pdf
(pdf, 2,06 MB)
09 January 2024

Michael Thöne

in: Jens Bullerjahn, Thomas Kralinski, Matthias Platzeck ; Ringo Wagner (Hrsg.): Deutschland und sein Sozialstaat - Erfolgsgeschichte mit Zukunft? Magdeburg: Friedrich-Ebert-Stiftung, Landesbüro Sachsen-Anhalt, 2024. ISBN 978-3-98628-330-8, S. 496-509.

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