Economic globalization and the shifting boundaries of German federalism

Publius: The Journal of Federalism

Volumn 26, Issue 1, 1996, Pages 27-52

  Deeg, Richard ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0030496025     PISSN: 00485950     EISSN: None     Source Type: Journal    
DOI: 10.1093/oxfordjournals.pubjof.a029839     Document Type: Article

References (81)

1. 1 Geoffrey Garrett and Peter Lange, "Political Responses to Interdependence: What's 'Left' for the Left?" International Organization 45 (Autumn 1991): 539-564
2. 2 Germany is not an exception. There is ample evidence of decentralization in a variety of advanced industrial economies, including increased economic policymaking by subnational governments. See, for example, L. J. Sharpe, ed. The Rise of Meso Government in Europe (London: Sage, 1993).
3. 3 For example, see Roland Sturm, Die Industriepolitik der Bundesländer und die europäische Integration (Baden-Baden: Nomos, 1991); Ulrich Jürgen and Wolfgang Krumbein, eds. Industriepolitische Strategien: Bundesländer im Vergleich (Berlin: Edition Sigma, 1991).
4. 3 For example, see Roland Sturm, Die Industriepolitik der Bundesländer und die europäische Integration (Baden-Baden: Nomos, 1991); Ulrich Jürgen and Wolfgang Krumbein, eds. Industriepolitische Strategien: Bundesländer im Vergleich (Berlin: Edition Sigma, 1991).
5. 4 See Peter J. Katzenstein, Industry and Politics in West Germany: Toward the Third Republic (Ithaca, NY: Cornell University Press, 1989).
6. 5 Garrett and Lange, "Political Responses to Interdependence," See also Jeffry A. Frieden, "Invested Interests: the Politics of National Economic Policies in a World of Global Finance," International Organization 45 (Autumn 1991): 425-451.
7. 5 Garrett and Lange, "Political Responses to Interdependence," See also Jeffry A. Frieden, "Invested Interests: the Politics of National Economic Policies in a World of Global Finance," International Organization 45 (Autumn 1991): 425-451.
8. 6 For half of the sixteen Länder (including the five largest), exports accounted for 25 percent or more of regional GDP in 1991. "Die Dicksten Aufträge Kassiert NRW," IWD: Informationsdienst des Institutes der deutschen Wirtschaft 18 (9 January 1992): 3.
9. 7 A good deal has been written about the actual and predicted consequences of reunification and European integration on German federalism. See, for example, Rainer Olaf Schultze, "Statt Subsidaritat und Entscheidungsautonomie-Politikverflechtung und kein Ende: Der Deutsche Föderalismus nach der Vereinigung," Staatswissenschaften und Staatspraxis 4 (1993): 225-255.
10. 8 For a theoretical discussion of this process, see Fritz W. Scharpf, "Die Handlungsfähigkeit des Staates am Ende des zwanzigsten Jahrhunderts," Politische Vierteljahresschrift 32 (Winter 1991): 621-634.
11. 9 For a theoretical discussion of state economic intervention and decentralization, see Dietrich Rueschemeyer and Peter B. Evans, "The State and Economic Transformation: Toward an Analysis of the Conditions Underlying Effective Intervention," Bringing the State Back In, eds. Peter B. Evans, Dietrich Rueschemeyer, and Theda Skocpol (Cambridge, MA: Cambridge University Press, 1985), pp. 44-77.
12. 10 By 1980, approximately 80 percent of the total tax revenues was shared between all three levels of government. Peter J. Katzenstein, Policy and Politics in West Germany: The Growth of a Semisovereign State (Philadelphia, PA: Temple University Press, 1987), pp. 49-50.
13. 11 See Fritz Scharpf, Bernd Reissert, and Fritz Schnabel, Politikverflechtung: Theorie und Empirie des kooperativen Föderalismus in der Bundesrepublik (Kronberg, Germany: Scriptor Verlag, 1976). See also Fritz W. Scharpf, "Der Bundesrat und die Kooperation auf der 'dritten Ebene," Max-Planck-Institut für Gesellschaftsforschung: MPIFG Discussion Paper 89/4 (May 1989).
14. 11 See Fritz Scharpf, Bernd Reissert, and Fritz Schnabel, Politikverflechtung: Theorie und Empirie des kooperativen Föderalismus in der Bundesrepublik (Kronberg, Germany: Scriptor Verlag, 1976). See also Fritz W. Scharpf, "Der Bundesrat und die Kooperation auf der 'dritten Ebene," Max-Planck-Institut für Gesellschaftsforschung: MPIFG Discussion Paper 89/4 (May 1989).
15. 12 Among the primary barriers to change was the desire of the financially weaker Länder not to lose federal funds because the formal devolution of policy responsibilities to lower levels would have entailed a corresponding devolution of fiscal authority and placed them at a disadvantage. See Arthur Benz, "Intergovernmental Relations in the 1980s," Publius: The Journal of Federalism 19 (Fall 1989): 203-220. See also Fritz W. Scharpf, "The Joint-Decision Trap: Lessons From German Federalism and European Integration," Publius: Administration 66 (Autumn 1988): 239-278.
16. 12 Among the primary barriers to change was the desire of the financially weaker Länder not to lose federal funds because the formal devolution of policy responsibilities to lower levels would have entailed a corresponding devolution of fiscal authority and placed them at a disadvantage. See Arthur Benz, "Intergovernmental Relations in the 1980s," Publius: The Journal of Federalism 19 (Fall 1989): 203-220. See also Fritz W. Scharpf, "The Joint-Decision Trap: Lessons From German Federalism and European Integration," Publius: Administration 66 (Autumn 1988): 239-278.
17. 13 Benz, "Intergovernmental Relations," 219.
18. 14 Garrett and Lange, "Political Responses to Interdependence," 541. See also Frieden, "Invested Interests."
19. 14 Garrett and Lange, "Political Responses to Interdependence," 541. See also Frieden, "Invested Interests."
20. 15 For a discussion of DQP, see Wolfgang Streeck, Social Institutions and Economic Performance: Studies in the industrial Relations in Advanced Capitalist Economies (London: Sage Publications, 1992), pp. 1-40.
21. 16 For discussions of the connections between globalization and regionalization, see Charles Sabel, "Flexible Specialization and the Re-emergence of Regional Economies," Reversing Industrial Decline: Industrial Structure and Policy in Britain and Her Competitors, eds. Paul Hirst and Jonathon Zeitlin (Oxford, England: Berg, 1989), pp. 17-70; Ökonomische und Politische Netzwerke in der Region: Beiträge aus der Internationalen Debatte, ed. Wolfgang Krumbein (Münster, Germany: Lit Verlag, 1994); and Annalee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 1994), pp. 4-10.
22. 16 For discussions of the connections between globalization and regionalization, see Charles Sabel, "Flexible Specialization and the Re-emergence of Regional Economies," Reversing Industrial Decline: Industrial Structure and Policy in Britain and Her Competitors, eds. Paul Hirst and Jonathon Zeitlin (Oxford, England: Berg, 1989), pp. 17-70; Ökonomische und Politische Netzwerke in der Region: Beiträge aus der Internationalen Debatte, ed. Wolfgang Krumbein (Münster, Germany: Lit Verlag, 1994); and Annalee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 1994), pp. 4-10.
23. 16 For discussions of the connections between globalization and regionalization, see Charles Sabel, "Flexible Specialization and the Re-emergence of Regional Economies," Reversing Industrial Decline: Industrial Structure and Policy in Britain and Her Competitors, eds. Paul Hirst and Jonathon Zeitlin (Oxford, England: Berg, 1989), pp. 17-70; Ökonomische und Politische Netzwerke in der Region: Beiträge aus der Internationalen Debatte, ed. Wolfgang Krumbein (Münster, Germany: Lit Verlag, 1994); and Annalee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 1994), pp. 4-10.
24. 17 For a discussion of the differential mobility of different types of capital, see Frieden, "Invested Interests."
25. 18 Local governments were also increasingly active in economic promotion. See Kommunale Wirtschaftsförderung, ed. Dirk Ehlers (Cologne, Germany: W. Kohlhammer, 1990) .
26. 19 The subsidy rate (defined as the percentage of government aid to total sectoral value added) of all mining and manufacturing firms in 1984 was 4.4 percent. Reflecting the outcome of sectoral crisis plans, the subsidy rate for coal mining in 1984 was 64 percent; for shipbuilding 33.7 percent; for iron and steel 21.4 percent (up from 3.6 percent in 1981). Jürgen B. Donges, Mehr Strukturwandel für Wachstum und Beschäftigung: die Deutsche Wirtschaft im Anpassungsstau (Tübingen: J.C.B. Mohr, 1988), p. 216.
27. 20 Landtag of North Rhine-Westphalia, Plenary Protocol of the Landtag of North Rhine-Westphalia 10/54 (10 July 1987), pp 4598-4599. For a discussion of state policy regarding the Ruhr region and industries, see Karl-Ernst Brosch, "Die Staatliche Kohlepolitik," Die Ruhrkohle AG: Sozialökonomische Unternehmensbiographie eines Konzerns, ed. Lothar Neumann (Bochum, Germany: Germinal Verlag, 1987).
28. 20 Landtag of North Rhine-Westphalia, Plenary Protocol of the Landtag of North Rhine-Westphalia 10/54 (10 July 1987), pp 4598-4599. For a discussion of state policy regarding the Ruhr region and industries, see Karl-Ernst Brosch, "Die Staatliche Kohlepolitik," Die Ruhrkohle AG: Sozialökonomische Unternehmensbiographie eines Konzerns, ed. Lothar Neumann (Bochum, Germany: Germinal Verlag, 1987).
29. 21 Thomas R. Howell, William A, Noellert, Jesse G. Kreier, and Alan William Wolff, Steel and the State: Government Intervention and Steel's Structural Crisis (Boulder, CO: Westview, 1988), pp. 180-183.
30. 22 See, for example, Reimut Jochimsen, "The Regionalisation of Structural Policy: North Rhine-Westphalia in the Europe of the Regions," German Politics 1 (December 1992): 82-101.
31. 23 In 1985, R&D expenditures hovered just under 3 percent of GDP in all three countries. Donges, Mehr Strukturwandel für Wachstum und Beschäftigung, p. 160.
32. 24 In 1984, for example, the federal government contributed DM 11.1 billion to R&D in the Federal Republic. The Länder contributed DM 6.5 billion (DM 4.9 billion of which went to university-based research). Heribert Schatz and Michael Maas, "Die Bedeutung von Forschung und Entwicklung für die Wirtschaft Nordrhein-Westfalens," Die Wirtschaft des Landes Nordrhein-Westfalen, ed. Ludwig Bussmann (Cologne, Germany: W. Kohlhammer, 1988), p. 255.
33. 25 For a discussion of educational upgrading in Baden-Württemberg, see Charles F. Sabel, Gary B. Herrigel, Richard E. Deeg, and Richard Kazis, "Regional prosperities compared: Massachusetts and Baden-Württemberg in the 1980s," Economy and Society 18 (November 1989): 374-404.
34. 26 Federal and Länder technology policies are independent, though they attempt to voluntarily coordinate their policies through an intergovernmental committee. Sturm, Die Industriepotitik der Bundesländer, p. 68.
35. 27 For further discussion of intergovernmental relations between Germany and the EU, see Richard E. Deeg, "Germany's Länder and the Federalization of the European Union;" The State of the European Community, vol. 3: Building a European Polity? Carolyn Rhodes and Sonia Mazey, eds. (Boulder, CO: Lynne Rienner, 1995), pp. 197-220.
36. 28 In 1983, for example, the Länder dispensed DM 468.4 million in subsidies under their regional programs. In that same year, the value of subsidies (not including tax allowances) under the GA -financed equally between the Länder and the federal government - totalled DM 334.2 million. Martin Hennicke and Diana de Pay, Zum Fördersystem für kleine und Mittlere Unternehmen (Stuttgart, Germany: Poeschel, 1986).
37. 29 For a discussion of the current reform debate over the GRW, see Astrid Ziegler, "Die Deutsche Regionalpolitik vor Neuen Herausforderungen," WSI Mitteilungen 48 (March 1995): 206-214.
38. 30 Beginning at the turn of the century, the Mittelstand created various "self-help" organizations. For example, Craft Chambers, Chambers of Industry and Commerce, cooperative banks, and cooperative research organizations, that are supported by state regulation and aid. For the example of the craft sector, see Wolfgang Streeck, Social Institutions and Economic Performance, pp. 105-136.
39. 31 But this was temporary; the proportion of federal research aid to the Mittelstand declined in the late 1980s as the federal government sought to reduce subsidies in favor of reduced business taxes. Thus, in 1985, 31 percent of federal research aid to firms went to the Mittelstand: In 1990, this figure stood at 18 percent. For 1985 data, see Forschungsförderung für Kleine und Mittlere Unternehmen - Bilanz 1986 (Bonn, Germany: Federal Ministry for Research and Technology, 1986), for 1990 data, see "Riesengeld vom Riesenhuber," Capital (March 1992): 62-64.
40. 31 But this was temporary; the proportion of federal research aid to the Mittelstand declined in the late 1980s as the federal government sought to reduce subsidies in favor of reduced business taxes. Thus, in 1985, 31 percent of federal research aid to firms went to the Mittelstand: In 1990, this figure stood at 18 percent. For 1985 data, see Forschungsförderung für Kleine und Mittlere Unternehmen - Bilanz 1986 (Bonn, Germany: Federal Ministry for Research and Technology, 1986), for 1990 data, see "Riesengeld vom Riesenhuber," Capital (March 1992): 62-64.
41. 32 In 1970, the KfW granted a total of DM 838 million in domestic loans; in 1986 the KfW granted a total of DM 9.8 billion in domestic loans, DM 6.2 billion of which went to the Mittelstand. In 1991, loans for domestic investment peaked at nearly DM 32 billion (more than half went to the eastern Länder); DM 17.7 billion went to Mittelstand firms. In 1973, the DAB granted DM 33 million in loans for business startups, by 1983, such loans amounted to just over DM 1.4 billion. See the 1987 and 1993 Annual Reports of the KfW; and the 1983 and 1987 Annual Reports of the DAB.
42. 33 Sigurt Vitols, "German Banks and the Modernization of the Small Firm Sector: Long-Term Finance in Comparative Perspective" (paper presented at the 9th International Conference of Europeanists, Chicago, IL, April 1994), 13. This percentage would be even higher if the loans of all Länder development banks (in both the East and West) were fully accounted.
43. 34 The increased pursuit of foreign economic policy by subnational governments is also evident in the United States. This suggests that foreign economic policy by subnational governments is also attributable to the lowering of national trade controls - tariffs, quotas, capital controls, and foreign exchange controls - in the context of liberal international trade rules. For example, the removal of trade and capital barriers increases the ease with which subnational governments can recruit foreign direct investment or subsidize exports.
44. 35 Karl-Heinz Jüttemeier, Deutsche Subventionspolitik in Zahlen: 1973-1981 (Kiel: Institut für Weltwirtschaft, 1984).
45. 36 Financial subsidies by the federal government only grew at 3.7 percent per year, slightly above its total spending at 3.5 percent per year. However, the volume of financial aid provided by the federal government was still nearly four times that of the Länder (DM 40.2 billion versus DM 11.3 billion, respectively). See Donges, Mehr Strukturwandel für Wachstum und Beschäftigung, 147.
46. 37 A considerable percentage of subsidies to the East were financed by diverting federal subsidies from the old to the new Länder. Thus, the level of subsidies in the old Länder declined slightly. "Diät für den Westen," IWD: Informationsdienst des Institutes der deutschen Wirtschaft 19 (October 1993): 6.
47. 38 By increasing the role of regional societal organizations in policymaking and implementation. Länder governments further removed their parliaments from policymaking. In contrast, political party influence in regional policy networks has been steadily increasing through the politicization of Land administrations, thus giving the ruling party or coalition stronger influence over its administrative apparatus and potentially greater cohesiveness within regional policy networks. See Gerhard Lehmbruch, "Institutional Linkages and Policy Networks in the Federal Republic of West Germany," Publius: The Journal of Federalism 19 (Fall 1989): 221-236.
48. Other studies support the view that Länder party systems continue to demonstrate considerable autonomy from the national system. See Geoffrey K. Roberts, "Party System Change in West Germany: Land-Federal Linkages," West European Politics 12 (October 1989): 98-113.
49. 39 This discussion of exchange-based interorganizational cooperation draws on Fritz W. Scharpf, Interorganizational Policy Studies: Issues, Concepts and Perspectives," Interorganizational Policymaking: Limits to Coordination and Central Control, eds. Kenneth Hanf and Fritz W. Scharpf (Beverly Hills: Sage, 1978); and Leonardo Parri, "Territorial Political Exchange in Federal and Unitary Countries," West European Politics 12 (July 1989): 197-219.
50. 39 This discussion of exchange-based interorganizational cooperation draws on Fritz W. Scharpf, Interorganizational Policy Studies: Issues, Concepts and Perspectives," Interorganizational Policymaking: Limits to Coordination and Central Control, eds. Kenneth Hanf and Fritz W. Scharpf (Beverly Hills: Sage, 1978); and Leonardo Parri, "Territorial Political Exchange in Federal and Unitary Countries," West European Politics 12 (July 1989): 197-219.
51. 40 Further discussion of regional policy networks can be found in Christopher S. Allen, "Corporatism and Regional Economic Policies in the Federal Republic of Germany: The 'Meso' Politics of Industrial Adjustment," Publius: The Journal of Federalism 19 (Fall 1989): 147-164; and Gerhard Lehmbruch, "Institutional Linkages."
52. 41 The definition of these goals is done to a significant extent through the supervisory boards and committees of these organizations where leaders of the Land government and its ministries, representatives of regional industry, and the crafts and banking sectors regularly discuss the needs of the regional economy.
53. 42 Mittelstandsbericht 1977 (Stuttgart, Germany: Economics Ministry of Baden-Württemberg, 1977).
54. 43 Overall, subsides in the Mittelstand program rose 66 percent in three years from DM 179 to DM 299 million (1982 to 1985). One of the biggest increases came in expenditures for applied R&D. Mittelstandsbericht 1986 (Stuttgart, Germany: Economics Ministry of Baden Württemberg, 1986), p. 32.
55. 44 In 1986, almost half of the MBG's new equity participations were in technology-oriented investments, including firm start-ups. Annual Report of the Mittelstand Equity Participation Corporation (Stuttgart, Germany: Economics Ministry of Baden-Württemberg, 1986).
56. 45 The measures include, among others, funds for selected research projects, new biotechnology research parks, and expansion of university research. A good percentage of the money for these measures will come from the DM 1 billion in revenue generated by the Land government's sale of insurance companies it controlled. "Stuttgart will Einnahmen nicht 'verbraten'," Frankfurter Allgemeine Zeitung, 18 January 1994, p. 12. See also Wolfgang Hirn, "Spátzle-Connection," Manager Magazine (July 1993): 105-113.
57. 45 The measures include, among others, funds for selected research projects, new biotechnology research parks, and expansion of university research. A good percentage of the money for these measures will come from the DM 1 billion in revenue generated by the Land government's sale of insurance companies it controlled. "Stuttgart will Einnahmen nicht 'verbraten'," Frankfurter Allgemeine Zeitung, 18 January 1994, p. 12. See also Wolfgang Hirn, "Spátzle-Connection," Manager Magazine (July 1993): 105-113.
58. 46 Hirn, "Spátzle-Connection," 105-110.
59. 47 For a critical union perspective on the region's industrial policy, see Frank Iwer, Industriestandort Stuttgart 1994: Beschäftigungspolitik in der Region (München, Germany: IMUInstitut für Medienforschung und Urbanistik, 1994), pp. 83-92.
60. 48 Andreas Schlieper, 150 Jahre Ruhrgebiet: Ein Kapitel deutscher Wirtschaftsgeschichte (Düsseldorf, Germany: Schwann, 1986), pp. 187-188.
61. 49 The Land government's finance minister made this point in a speech to the Land parliament in 1974. For example, WestLB's equity holding in Preussag, a large energy conglomerate, was seen as particularly important for supporting the government's coal policy. See Plenary Protocol of the Land Parliament of North Rhme-Westphalia 7/117 (14 November 1974): 4900.
62. 50 This does not mean, however, that the Land government disengaged from sectoral policy in the Ruhr. For example, in the early 1990s, the government was still heavily involved in the steel industry through WestLB's engagements in this sector and government subsidies. See Walter Hillebrand. "Die nackte Not," Manager Magazine (January 1994): 50-57.
63. 51 The regional policy network was also extended to provide export-related services to Mittelstand firms. Aussenwirtschaftskonzept Nordrhein-Westfalen (Düsseldorf, Germany: Der Minister für Wirtschaft, Mittelstand und Technologie, 1987).
64. 52 From 1978 through 1983, the government supported roughly 400 research projects in Mittelstand firms with a total of DM 350 million. But in the early 1980s, the Land government was still primarily funding R&D in large firms via its sectoral technology programs for coal and energy (introduced in 1974) and steel (introduced in 1980) which received approximately DM 250 million annually. Plenary Prolocol of the Landtag of North Rhine-Westphalia, 9/100 (13 June 1984): 6032-6034.
65. 53 These include environmental technology, energy, microelectronics, measurement and control technology, information technology, biotechnology, materials, and humanization of technology.
66. 54 Franz Lehner, et al., Das Zukunftstechnologie-Programm des Landes NordrheinWestfalen: Eine Evaluationsstudie (Bochum, Germany: Universitäts-Verlag Brockmeyer, 1989).
67. 55 According to Neuber, the Land government's share of R&D spending in North RhineWestphalia is relatively higher than government support in other Länder. Friedel Neuber, "Die Kapitalversorgung und die Finanzierung des technischen Wandels in der privaten Wirtschaft Nordrhein-Westfalens," Die Wirtschaft des Landes Nordrhein-Weslfalen, ed. Ludwig Bussmann (Cologne, Germany: Kohlhammer, 1988), p. 239.
68. 56 See Prozessuale Begleitforschung der Regionalisierung der Strukturpolitik in Nordrhein-Westfalen, (Düsseldorf: Ministerium für Wirtschaft, Mittelstand und Technologie, 1992) See also Reimut Jochimsen, "The Regionalisation of Structural Policy: North Rhine-Westphalia in the Europe of the Regions," German Politics 1 (December 1992): 82-101. The EU is also promoting this kind of regional cooperation in its own regional policy programs. See Ziegler, "Die Deutsche Regionalpolitik."
69. 56 See Prozessuale Begleitforschung der Regionalisierung der Strukturpolitik in Nordrhein-Westfalen, (Düsseldorf: Ministerium für Wirtschaft, Mittelstand und Technologie, 1992) See also Reimut Jochimsen, "The Regionalisation of Structural Policy: North Rhine-Westphalia in the Europe of the Regions," German Politics 1 (December 1992): 82-101. The EU is also promoting this kind of regional cooperation in its own regional policy programs. See Ziegler, "Die Deutsche Regionalpolitik."
70. 56 See Prozessuale Begleitforschung der Regionalisierung der Strukturpolitik in Nordrhein-Westfalen, (Düsseldorf: Ministerium für Wirtschaft, Mittelstand und Technologie, 1992) See also Reimut Jochimsen, "The Regionalisation of Structural Policy: North Rhine-Westphalia in the Europe of the Regions," German Politics 1 (December 1992): 82-101. The EU is also promoting this kind of regional cooperation in its own regional policy programs. See Ziegler, "Die Deutsche Regionalpolitik."
71. 57 This is a point made earlier by Benz, Arthur Benz, "Perspektiven des Föderalismus in Deutschland," Die Öffentliche Verwaltung 44 ( 1991): 586-598.
72. 58 Dirk Nolte, "Länderinitiativen zum Erhalt 'Industrieller Kerne' in Ostdeutschland," WSI Mitteilungen 46 (March 1993): 188-190.
73. 59 Die Ostdeutschen Länder Sammeln Wieder Beteiligungen," Frankfurter Allgemeine Zeitung (22 July 1994): 13; and "Freistaat plant Industrieholding," Frankfurter Allgemeine Zeitung (11 July 1994): 4.
74. 59 Die Ostdeutschen Länder Sammeln Wieder Beteiligungen," Frankfurter Allgemeine Zeitung (22 July 1994): 13; and "Freistaat plant Industrieholding," Frankfurter Allgemeine Zeitung (11 July 1994): 4.
75. 60 Heidrun Abromeit, Der verkappte Einheitsstaat (Opladen, Germany: Leske und Budrich, 1992), p. 81.
76. 61 I am indebted to Edgar Grande for focusing my attention on this point.
77. 62 For example, a new German Exchange Company (Deutsche Börse AG) was created in 1992 to link all eight regional exchanges via electronic trading. Most of the Lander had long opposed reform of the stock exchanges for fear of greater centralization, but, in the end, they lost the policy battle.
78. 63 A contrary interpretation is also plausible. This interlocking of Landesbanken could be viewed as a form of horizontal cooperation among Länder that benefits all parties. The Länder that sold their banks gain revenues that can be used for other economic promotion measures (e.g., Rhineland-Palatinate did), while the Landesbanken they sold will presumably continue to support regional structural policy goals. I am indebted to one of the anonymous reviewers for raising this argument. On Rhineland-Palatinate, see "Wirtschaftsförderung in Rheinland-Pfalz soll mehr Druck machen," Frankfurter Allgemeine Zeitung (2 December 1994): 26.
79. 64 Gisela Färber, "Reform des Länderfinanzausgleichs," Wirtschaftsdienst 73 (June 1993): 305-313.
80. 65 See Schultze, "Statt Subsidarität und Entscheidungsautonomie." 250-251.
81. 66 Scharpf explains why such disentanglement is extremely difficult to achieve. Scharpf, "The Joint-Decision Trap."