The FiFo Institute for Public Economics at the University of Cologne works at the interface between top economic research and practical public finances. It’s mission is to to enable better policy-making. Research and policy consulting go hand in hand; a high degree of independence is essential for both. With this double credo of policy-oriented research and research-based policy consulting, FiFo works on public finances, on climate and environmental policy, good governance in multi-level constitutions and on the fiscal dimensions of demographic change.

FiFo Köln was founded in 1927 by Fritz Karl Mann. The oldest economic research institute in western Germany - and the third-oldest in the whole of Germany after IfW Kiel and DIW Berlin - has been very active as an affiliated institute in all years of its activity, always anchoring all of its research not only in science, but also in society and political practice.

Fields of Activity

Public economics is the economic science of the tasks of the state and the public expenditure and revenues it generates. A modern approach to public economics that combines evidence-based research, clear actor analysis and the demand for immediate practical applicability of its findings in these fields must always build bridges. The most important bridge is the combination of sophisticated quantitative methods - primarily micro-based econometrics and fiscal simulation models - with a transparent, low-threshold and accessible design of policy instruments. The second bridge, regular and intensive inter- and transdisciplinary cooperation with researchers from neighbouring fields and with practitioners from public administration and politics, also serves this purpose.

In this way, FiFo Köln's work in applied public economics focuses on: the quality of oublich finances and fiscal sustainability; on fiscal equalisation and multi-level governance from the municipal to the European perspective; on municipal finances and local taxation; on budget reform and budget transparency; on the evaluation of government spending programmes, subsidies and tax credits; on national and international environmental, climate and energy policy as well as on sustainable regional development and urban-rural economics.

Networking

Networking within and beyond the scientific community takes place in several ways.
A broad network of practice partners has grown beyond the clients and research funding agencies - even beyond individual projects. Since the turn of the millennium, FiFo has with and for ten federal ministries, many state governments, the Bundestag and several state parliaments, local authorities, international governments, EU institutions, the OECD, foundations, NGOs and associations. The Institute cooperates particularly closely with the City of Cologne.

The FiFo directors are members of various advisory boards and committees: Felix Bierbrauer is, inter alia, a member of the scientific advisory board of the BMWi; Michael Thöne is, among others, a member of the competence centre "Sustainable Local Financial Policy" of the WWU Münster and the high-level group "Sovereign Europe" of the Bertelsmann Foundation.

The group "FiFo Policy Fellows" consists of 15-20 personalities who combine research and practice, whether as practice-oriented financial scientists or as practitioners with an affinity for research.

Finally, the Institute cooperates in joint projects and beyond with many other researchers and institutes. In the regional context, these include the UoC, the German Economic Institute (IW), the Institute of Energy Economics (EWI) and Frontier Economics Cologne. Supra-regional economic partners include ifo Munich, ZEW Mannheim, DIW Berlin and Copenhagen Economics. Interdisciplinary cooperation is maintained above all with a number of law chairs as well as with regional and transport science institutes.

Development / Legal entities

Barely a year after Fritz Karl Mann accepted the call to the new, first German chair for public economics at the University of Cologne, the institute newly established by him started its work in May 1927.

In 1936, Mann had to flee the anti-Semitic persecutions into American exile. The war and the post-war period brought research almost to a complete standstill.

In 1949, the research institute resumed regular operations under the direction of Günter Schmölders. Under his successor, Karl-Heinrich Hansmeyer, who headed FiFo as director from 1972 to 1993, and its managing director Dieter Ewringmann, the institute's fields of research expanded. In addition to its traditional topics, FiFo was one of the first German research institutes to turn to environmental economics.

From 1993 to 1998 Klaus Mackscheidt was director of FiFo, followed by Wolfgang Kitterer. Clemens Fuest was scientific director of the Institute from 2005 to 2011. Since 2011, Felix Bierbrauer has held the chair of public economics at the University of Cologne and has been scientific director of FiFo.

Since 1949, FiFo Köln’s legal and financial entity has been the non-profit "Gesellschaft zur Förderung der finanzwissenschaftlichen Forschung e.V." Since 1999, this association has been headed by Michael Thöne as managing director and executive board member. Confirmed by the new cooperation treaty between the University of Cologne and FiFo from spring 2020, he also is FiFo’s managing director/CEO.

Today's ideas. Tomorrow's impact.

The financing of the municipal services provided by the 11,000 German municipalities is repeatedly the subject of hot political and constitutional controversy in most of the federal states. In such constellations, economic expertise often plays a decisive role in achieving municipal financing laws accepted by all sides.

In 2018, FiFo researchers developed a new econometric method for the differentiated measurement of municipal financial needs and applied it to the German Land  Schleswig-Holstein. On this basis, a new Fiscal Equalisation Act is to be passed by the end of 2020, which will create an alternative to the current unconstitutional municipal financing for the 1,200 municipalities in Schleswig-Holstein.

Based on a sofia FiFo report using the new FiFo method, the Saarland also has a good chance of overcoming the 40-year blockade on municipal financing reforms in 2021.