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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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.


The Institute's management and team welcome Werner Gatzer as a new FiFo Policy Fellow. The Chairman of the Supervisory Board of Deutsche Bahn AG was responsible for the federal budget as State Secretary for over 18 years until the end of 2023. "There is hardly any other person in Germany who has as much authority and practical experience in budgetary and fiscal policy as Werner Gatzer. We are very grateful to have him among our Fellows," remarks Michael Thöne on this very welcome addition.


As keynote speaker at the Political Ash Wednesday of the Gütersloh district employers, Michael Thöne discusses the growing challenges North Rhine-Westphalian municipal authorities face in the field of investment, climate protection and digitalisation. All of this must be managed with fewer staff. In view of the mounting wave of retirements, it is becoming increasingly important to modernise and focus public tasks: "We don't need a weak government, but a government that does the right thing".


Japan is establishing a modern evaluation system for tax expenditures. Tomohiro Kimura, Deputy Director from the ministry in charge, SOUMU, as well as Otoe Yoda, Arisa Kudo and Toko Kawagoe from Deloitte Tokyo talk to Eva Gerhards and Michael Thöne about two decades of FiFo experience with strengthening subsidy control in Germany and about the institute's trademark evaluation system for tax subsidies.


The FiFo evaluations of numerous German tax expenditures have put agro diesel and the motor vehicle tax exemption in agriculture on the BMF's definitive cut list according to "Wirtschaftswoche". Yet in the hearing of the Finance Committee of the Bundestag, Michael Thöne talks more about the reduction of subsidies in the air transport tax and outlines a competitively fair reduction of the general diesel privilege based on the Belgian model.


Municipal road construction contributions, a Prussian invention dating back to 1893, are extremely unpopular and have been abolished in almost all German Länder for a good five years. Also in North Rhine-Westphalia, they are now to be abolished once and for all. In his expert hearing statement, Michael Thöne outlines the evaluation criteria against which the non-contributory, low-bureaucracy and incentive-based financing of road construction must be measured. In this light, he characterises the mechanism now proposed as a good interim model.


Social Europe is at its strongest when it does not become a European welfare state ahead of time, argues Michael Thöne in the newly published final volume of the Friedrich-Ebert-Stiftung's "Germany Trilogy". After "Deutschland – Ländersache?!“ (2020) and "Deutschland und sein Geld“ (2022), the third book "Deutschland und sein Sozialstaat. Erfolgsgeschichte mit Zukunft?" (2024), which was initiated by the late FiFo Policy Fellow Jens Bullerjahn, offers a broad kaleidoscope of numerous contributions and discussions on social issues and social policy on 540 pages. All three books can be downloaded and ordered here

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.

20 December 2023

Klaus Mackscheidt

FiFo / Dezember 2023 / Discussion Paper, FiFo-Köln

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