Debt rule federalism: The case of Germany

Arbeitspapier

In 2009, Germany introduced a new debt rule in its federal constitution (Grundgesetz). The socalled 'debt brake' prescribes a balanced budget for both the federal level and the states. However, the states have leeway regarding transposition and specification of the national requirements into their own state constitutions and budgetary laws. This analysis presents a comprehensive comparison of the 16 state provisions. We develop an indicator which quantifies the stringency of state rules (Strength of Fiscal Rule Indicator). Two results emerge: First, despite the common constitutional rule at the federal level, the analysis reveals a considerable heterogeneity across German states. Second, several highly indebted states miss the chance to make their fiscal regime more credible. This finding corresponds to the disincentives of the German federation. Due to bailout-guarantees enshrined in German federalism, German states do not have incentives to impress bond markets through particularly strict budgetary rules.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ZEW Discussion Papers ; No. 12-067

Klassifikation und Themen

• Klassifikation: Wirtschaft ; National Debt; Debt Management; Sovereign Debt ; State and Local Borrowing ; Intergovernmental Relations; Federalism; Secession
• Thema: fiscal rules ; debt brake ; Germany ; fiscal federalism

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Ciaglia, Sarah ; Heinemann, Friedrich
• Ereignis: Veröffentlichung
• (wer): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (wo): Mannheim
• (wann): 2012

Weitere Informationen

• Handle: http://hdl.handle.net/10419/66119
• URN: urn:nbn:de:bsz:180-madoc-326197
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ