Abstract

The Influence of Fiscal Support on the Conditions of Competition in the Ruhr Coal Mining Industry

The author examines how the different instruments of state and federal support (subsidies for producers and buyers, fiscal assistance and relief payments and other administrative actions which lead to encreased rents and the satisfaction of public needs) influenced the conditions of competition of the coal mining firms in West Germany’s Ruhr River Area. As conditions of competition, the author examines the degree of substitution, structure of preferences, bidding prices, the structure of supply, and the adjustment of markets on the demand side. In addition, the influence of fiscal support on public welfare is outlined. The author comes to the conclusion, that state and federal support for the Ruhr Coal Mining Industry had considerable influence on all the mentioned conditions of competition. Subsidies had the strongest influence. First intended to be a short term relief of the coal mining industry, fiscal support later aimed for a long term improvement of the situation by means of subsidies for buyers, relief payments and by attempts to alter preference structures and the possibilities of substitution.