Arbeitspapier
The political economy of fiscal supervision and budget deficits: Evidence from Germany
In many federal countries, local governments run large deficits, even when fiscal supervision by state authorities is tight. I investigate to which extent party alignment of governments and fiscal supervisors influences budget deficits. The dataset includes 427 German local governments for the period 2000-2004. I exploit a period after a far-reaching institutional reform that entirely re-distributed political powers on both the government level and the fiscal supervisor level. Results do not show that party alignments of governments and supervisors (co-partisanship) drive short-term deficits. Instead, I find that the ideology of partisan governments and supervisors matters: left-wing local governments run higher deficits than their right-wing counterparts; left-wing supervisors tolerate higher deficits than right-wing supervisors. These findings imply that political independence for fiscal supervisors is recommended.
- Sprache
-
Englisch
- Erschienen in
-
Series: CEPIE Working Paper ; No. 02/17
- Klassifikation
-
Wirtschaft
National Deficit; Surplus
State and Local Borrowing
Intergovernmental Relations; Federalism; Secession
- Thema
-
Local government
Budget deficits
Fiscal supervision
Partisan cycle
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Roesel, Felix
- Ereignis
-
Veröffentlichung
- (wer)
-
Technische Universität Dresden, Center of Public and International Economics (CEPIE)
- (wo)
-
Dresden
- (wann)
-
2017
- Handle
- URN
-
urn:nbn:de:bsz:14-qucosa-217869
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Roesel, Felix
- Technische Universität Dresden, Center of Public and International Economics (CEPIE)
Entstanden
- 2017
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