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J. Bröthaler, M. Getzner:
"Dimensions of "smart" fiscal policies of cities";
Talk: Joint AESOP/ACSP Congress Dublin 2013 - Planning for Resilient Cities and Regions, Dublin; 2013-07-15 - 2013-07-19; in: "Joint AESOP/ACSP Congress Dublin 2013 - Planning for Resilient Cities and Regions - Papers", (2013), Paper ID 13-5, 23 pages.

In the context of "smart cities" as a concept involving new technologies and social processes with the aim to reduce the environmental burden and resource consumption of cities (cf. Giffinger et al., 2005; Lazaroiu and Roscia, 2012), it has recently been stressed that the financial resources and fiscal policies of cities have to be "smart" as well to achieve the long-term goals of a sustainable development. Sustainable public finances even have been put forward as the very basis of the development of "smart cities". While the debate on sustainable public finances has mainly centered on municipal debt, the concept of "smart" fiscal policies may include a broader range of dimensions of sustainability.

The paper first presents an overview of the concept of "smart fiscal policy" in particular along the following lines.
- Sustainability of public debt (which can be tested for by several statistical and economic models);
- Fiscal policies in terms of the effectiveness of expenditure (past, present, future-oriented; WNA-concept), and in the sense of environmentally counter-productive expenditure (e.g. Schratzenstaller, 2005);
- Processes for planning fiscal policies and institutions to account for citizens´ participation in budgetary policies (Feld and Kirchgässner, 1999);
- Smart fiscal federalism in terms of responsibility of decision makers, financing electorate, and beneficiaries.

We then explore the "smartness" of municipal fiscal policies by discussing Austrian cities. The paper presents empirical and econometric evidence on the fiscal sustainability of Austrian cities (Bröthaler et al., 2011), applies the WNA-concept to municipal expenditure, and discusses the institutional arrangements to be provided for a smart fiscal policy.

Our results show that Austrian cities are well off in terms of sustainability of their municipal debt; however, the effectiveness of municipal expenditure in terms of sustainability and future-oriented expenses has decreased over the last ten years. Lack of institutions of direct democracy (participation) and a fiscal federalism system that is not incentive-compatible are major future challenges for smart fiscal policies of cities.

Das Konzept von "Smart Cities" bezieht sich im Allgemeinen auf neue Technologien sowie politische und soziale Prozesse mit dem Ziel, Umweltlasten und Ressourcenverbrauch von Städten zu vermindern. Um diese Ziele einer nachhaltigen Entwicklung zu erreichen, bedarf es auch einer nachhaltigen, geordneten Finanzpolitik.

Der Beitrag widmet sich den verschiedenen Dimensionen einer smarten Finanzpolitik (empirisch am Beispiel der österreichischen Gemeinden):
- Nachhaltigkeit der Verschuldung
- Berücksichtigung der Wirkungen der Ausgaben (zukunftsorientierte gegenüber gegenwarts- und vergangenheitsbezogene Ausgaben)
- Budgetplanuungsprozesse, insbesondere im Hinblick auf Bürgerbeteiligung,
- Nachhaltige, anreizkompatible Gestaltung der finanziellen Beziehungen zwischen den Gebietskörperschaften im Sinne von Konnexität, fiskalischer Äquivalenz und institutioneller Kongruenz.

Municipal public debt, local governments, sustainability of fiscal policies, political economy of fiscal policies, off-budget debt

http://publik.tuwien.ac.at/files/PubDat_219114.pdf