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.
The Indian market for green bonds is evolving rapidly. However, green bonds have so far only been used occasionally to finance sustainable infrastructure in India's fast-growing cities. In a webinar by the National Institute of Urban Affairs (New Delhi) and GIZ, Michael Thöne explains the basics of urban investments and their financing. Above all, he emphasizes that green bonds require debt sustainability and resilient leverage ratios. The innovative bond instrument works best when municipal finances and assets grow as dynamically as India's urban population. Here are the slides.
Municipal investments do not fail because of lack of money alone. Schools have by far the largest investment backlogs. Municipalities are already very active in climate protection; at the same time they see a great need for additional measures. But calculating climate protection costs proves difficult. In some areas, the municipalities are already very satisfied with their achievements in digitisation. These and many other findings of the representative FiFo survey of North Rhine-Westphalian municipalities are presented in the new report NRW.BANK.Fokus Kommunen 2023.
With the Russian attack on Ukraine, the past year has brought a rupture for Europe. At the end of 2022, the renowned Loccumer Finanztage (Loccum Finance Days) dealt with the manifold challenges for "Public Finances in the Turn of the Times". In the conference proceedings now available, Michael Thöne discusses the new situation of renewable energies in the energy crisis, which in view of extremely dynamic energy prices are caught between subsidisation and caps on overly high profits. His paper is available for free download.
The cities and municipalities of North Rhine-Westphalia, as school authorities, are financed primarily through the pupil rate. FiFo Köln has now reviewed this long-criticized supplementary component of the municipal fiscal equalization system. It became clear that schoolchildren in open all-day care cost the municipalities at least as much as children in regular all-day schools, but have so far only been financed in the same way as half-day schoolchildren. The reform options outlined in FiFo Report 32 aim to end this significantly lower funding. In the key points for the Municipal Financing Act 2024, the North Rhine-Westphalian government announces that it intends to implement the most straightforward of these models directly, using long-day and short-day schooling as as core indicators .
Money does not rule the world - but politics that deals prudently with common resources is definitely desirable. In July, the cinema and culture magazine Choices takes a thorough look at the question as to where finances and a good life go together - and where they don't - with its topic of the month, "Money or Life". In a large portrait, FiFo is honored here as a Cologne institution and also - what is often overlooked - as a local initiative. Active since 1927, the institute team has also been researching and advising on effective and fair-funded environmental and climate policy since the 1970s. In doing so, FiFo works not only on paper for the public good, but more importantly in substance: "We try to give a stronger voice in public finance policy to all that is intergenerationally just, economically viable, rational and equitable," says Michael Thöne - even if you certainly don't always succeed with that.
The Wiso Dean Ulrich Thonemann has appointed Prof. Dr. Sebastian Siegloch as a new director of the FiFo Instituite for Public Economics. The former ZEW economist and Cologne-trained journalist has been Professor of Economics in the Cluster of Excellence ECONtribute at the Wiso Faculty of the University of Cologne since mid-2022. His current research focuses on the interface of public economics with labor and urban economics. "We couldn't have found a better fit," expresses co-director Michael Thöne his delight at the new appointment. The FiFo team and the board of the Gesellschaft zur Förderung der finanzwissenschaftlichen Forschung welcome the top-class reinforcement and look forward to the collaboration.
The fiscal equalization system between the federal, state and local governments in Austria is facing a major reform. But energy transition and climate protection might not play a role in this. At the panel discussion of the expert dialogue of EEÖ and Wifo "Austria's energy transition in the field of tension of federalism", Michael Thöne recommends not to rely exclusively on the desired great reform. Effective climate measures of the energy transformation must eventually be implemented apart from the fiscal equalization system and not within it. What speaks in favor of such "quick and dirty solutions" is their speed, because also Austria can no longer afford to be slow when it comes to climate protection.
Refugee financing is re-igniting the old dispute between the federal government, the Länder and the municipalities about the tasks to be financed by each level. In the run-up to the refugee summit in the Federal Chancellery, Michael Thöne explains in an interview with NDR the chances and dangers of direct financial relations between the federal government and the municipalities. He assesses the current dispute as the first of many to come, because for now the times are over when pressing political problems could be mitigated with a great deal of additional money.
In 1922, agricultural vehicles were exempted from vehicle tax in order to promote the mechanisation of farming. The goal has been achieved for decades; the tax benefit lives on. In the spring of 2023, the Federal Court of Auditors had once again "ultimatively" called on the Minister of Finance to actually implement the recommendations from the 2019 FiFo evaluation of this 475-million-euro per year subsidy - Spiegel reported, among others. Now Michael Thöne explains on Bavarian television that the abolition of this futile subsidy paves the way for a more modern, sustainable approach to supporting our agriculture.