Germany’s Reunification - The Political Geography of Inequality - page 143

to the Constitutional Court. The 1987 amendment was, in this case, favorable
to the two northern city-states (Biehl and Ungar 1991 : 39-65). The point to
note here is that the differential, in terms of the population structure, between
l ander was underpinning this conflict about the design of interterritorial redis-
tribution in Germany during the 1980s.
The Albrecht Initiative (derived from the Conference of Northern Lander,
Norddeutschland Konferenz) provides the final example. The then prime min-
ister of Lower Saxony, with the support of the other northern l ander, asked
the federal government to share social welfare costs with the l ander across
the federation. Obviously, l ander with larger dependent populations were also
net recipients of FA. The conflict here did not emerge from the need to cope
with the extra costs derived from deindustrialization, but from the funding
mechanism proposed, in that “it would have led to a significant redistribution
of resources from South to North with the federation acting as intermediary”
(Exler 1991 : 86-88). In reaction to this proposal, the Conference of Southern
Lander (S uddeutschland Konferenz) presented an ultimately successful alter-
native, the Strukturhilfegesetz. This law limited the role to be taken by the
Federation to 2.5 billion annually, as opposed to the 10 billion proposed by
the Conference of Northern Lander. Underpinning this process is the classic
conflict between rich regions supporting decentralization and poorer ones in
favor of centralization. This becomes evident when taking a closer look at the
proposal by the Conference of Northern Lander regarding the funding of the
Structural Aid. The resources necessary would have been raised in two steps:
first, by increasing taxes on oil consumption and, more importantly, by shifting
the distribution of the turnover tax revenue so that the Federation would have
increased its share from 65%to70%. If implemented, such a proposal would
have implied a clear step in the direction of fiscal centralization (Renzsch 1989 :
333-345; 1991: 269-279).
Overall, the 1980s have shown how the different regions' preferences have
responded to changes in their dependent populations and in their relative posi-
tion within the overall economic structure, thus triggering tensions within the
system. The fundamental features of the system, however, remained stable.
This is largely so thanks to a set of federal institutions designed to foster coop-
eration and consensus across levels of government. Within this institutional
framework, the l ander have the capacity to influence, via the Bundesrat, the
shape and scope of interterritorial redistribution transfers (FA). But in exer-
cising such an influence, regional incumbents in Germany must compromise
across territorial and party lines, which in turn limits severely their ability
to devote themselves exclusively to the protection of local interests. In line
with the models' predictions, Germany's centripetal system of representation
muted the potentially destabilizing effects of the changes in economic geog-
raphy associated with the process of deindustrialization in the late 1970s
and 1980s. At the turn of the decade, though, Germany's fiscal structure
was to confront a more sudden and radical transformation to its economic