Fiscal Supervision and the Soft Budget Constraint: Evidence from Germany

Konferenzbeitrag

We study the effectiveness of local borrowing regulations in maintaining fiscal sustainability and the effect of supervision over municipal budgeting on local debt using a panel on municipalities in Germany's most populous state of North Rhine-Westphalia from 2003 to 2011. The identification strategy relies on a differences-in-differences approach and exploits the fact that a reform making it temporarily more likely to prevent financial supervision was implemented gradually across municipalities. We find that relaxing supervision temporarily leads to higher dept per capita.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Taxation I ; No. A15-V1

Classification and Topics

• Classification: Wirtschaft ; State and Local Budget and Expenditures ; State and Local Borrowing ; General Regional Economics (includes Regional Data)

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Christofzik, Désirée I. ; Kessing, Sebastian G.
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/100315
• Last update: 10.03.2025, 11:43 AM CET