Suchergebnisse

We examine whether US and German state governments pursue sustainable fiscal policies taking into account fiscal transfers. Using panel data techniques we investigate whether the debt-to-GDP ratio had a positive influence on the primary surplus (Bohn-model). We show that including/excluding fiscal transfers changes the results. If fiscal transfers are not included in the primary surplus, the test results do not indicate that the US and German state governments pursued sustainable fiscal policies. Our results also suggest that fiscal transfers were positively related with debt. These findings indicate that intergovernmental transfers have implicitly subsidized debts.

Using the new unit root test by Phillips et al. (2011) we show that the Target balances of the German Bundesbank have been exploding from the beginning of 2009 to the beginning of 2013. By implementing a full-allotment policy and reducing the required minimum quality of collaterals in October 2008, the European Central Bank (ECB) refinanced credits in the GIIPS countries to a large extent. Private capital flowed out of the GIIPS countries (Greece, Italy, Ireland, Portugal and Spain), and the Target claims of the German Bundesbank increased significantly. If the Eurozone collapses, the German Bundesbank would lose its Target claims. Because the German Bundesbank would certainly request a recapitalization from the German federal government, German government debt might increase.

Principal-agent problems can arise when preferences of voters are not aligned with preferences of political representatives. Often the consequence of the political principalagent problem is political catering to special interests. In this paper I provide examples of principal-agent problems regarding public spending. The examples concern construction or extension of concert halls in two German cities. Resistance to public funding for the concert halls was particularly strong in electoral districts with large constituencies on the left. The evidence indicates that political representatives were more bourgeois than their constituencies. In the cases studied asymmetric information did not prevail and voters were able to discipline their representatives through referenda that countered the results of voting by political representatives.

I investigate minority votes in the German Council of Economic Experts. The dataset contains information on the voting behavior of the council members over the period 1971-2011. The results show that the best predictor of minority voting is being nominated by the trade unions: a council member nominated by the trade unions is about 70 percentage points more likely to vote against the majority opinion of the German Council of Economic Experts. This voting pattern indicates that the channel of political appointment influences voting behavior.

Fiscal sustainability tests have largely ignored the institutional setting of fiscal policy making. Fiscal equalization schemes in federal states are one such institution. We examine whether German state governments pursue sustainable fiscal policies taking into account fiscal equalization transfers. Using panel data techniques we assess fiscal sustainability by investigating whether the debt-to-GDP-ratio has had a positive influence on the primary surplus (Bohn-model). Distinguishing between different measures of the primary surplus we show that including/excluding fiscal transfers changes the results of the Bohn-model. While fiscal equalization transfers do render the fiscal policy of the states sustainable they also provide the states with incentives to increase government spending which, eventually, might render the entire equalization scheme politically unsustainable.

In many European countries established leftwing and rightwing parties have been threatened by policy convergence and, in turn, new populist parties that offer more polarized platforms. I investigate whether government ideology influences dragnet-controls – controls of persons conducted by the police without having any suspicion that the controlled person committed a crime. They took effect after the Schengen Agreement in 1995. I propose dragnet-controls to be a prime example of ideology-induced policies implemented by established parties. Dragnet-controls confine citizens' liberties, but may help to detect criminals. Using data from the 16 German states over the period 1995–2017, I show that rightwing governments have been active in implementing dragnet-controls and leftwing governments have denied dragnet-controls since the mid 1990s. When evaluating how government/party ideology influences individual policies, previous econometric studies ignored initiatives in parliament. My study also considers initiatives in parliament. I conjecture that, since 2015, the rightwing CDU has used initiatives to introduce/extend dragnet-controls to also deal with the upcoming threat of rightwing populism. Future research should examine policy-differences between the established parties regarding more fine-grained policy measures also in other European countries.

Previous studies used general government data to examine whether national governments' electoral motives and ideology influenced budget composition in OECD countries. General government data includes, however, the state and local level. Using new data for general and central government over the period 1995-2016, I reexamine political cycles in budget composition. The results suggest that, both at the general and central government level, leftwing governments spent more on education and less on public services than rightwing governments. Defense expenditure was somewhat lower under leftwing than rightwing governments and in election years; especially in federal states. Effects of government ideology on the individual expenditure categories are larger at the central than general government level. Scholars need to re-examine results on ideology-induced effects that have been derived from general government data where central government data should have been used.

Previous studies used general government data to examine whether national governments' electoral motives and ideology influenced budget composition in OECD countries. General government data includes, however, the state and local level. Using new data for general and central government over the period 1995-2016, I reexamine political cycles in budget composition. The results suggest that, both at the general and central government level, leftwing governments spent more on education and less on public services than rightwing governments. Defense expenditure was somewhat lower under leftwing than rightwing governments and in election years; especially in federal states. Effects of government ideology on the individual expenditure categories are larger at the central than general government level. Scholars need to re-examine results on ideology-induced effects that have been derived from general government data where central government data should have been used.