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dc.contributor.authorFink, Alexanderen_US
dc.contributor.authorStratmann, Thomasen_US
dc.date.accessioned2009-11-16en_US
dc.date.accessioned2010-05-14T08:23:18Z-
dc.date.available2010-05-14T08:23:18Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/30619-
dc.description.abstractStates have soft budget constraints when they can expect a bailout by the federal government in the event of a financial crisis. This gives rise to incentives for unsound state fiscal policy. We test whether states with softer budget constraints have higher debt and deficits, receive more bailouts funds, spend funds less efficiently, and are more likely to allocate funds to programs benefiting special interests. Exogenous variation in soft budget constraints across states and over time allows the identification of budget constraint softness on state fiscal policy. We take advantage of the fact that in Germany, states' political influence is exogenous because voting weights differ in the upper chamber of the German parliament. The stronger the political influence of states, the softer their budget constraints. We show that states with softer budget constraint have higher deficits and debts, and receive more bailouts funds. Further, overrepresented states are less efficient in spending public funds and are more prone to respond to rent seeking by interest groups.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2827en_US
dc.subject.jelH70en_US
dc.subject.jelH11en_US
dc.subject.jelE62en_US
dc.subject.jelE63en_US
dc.subject.ddc330en_US
dc.subject.stwFinanzpolitiken_US
dc.subject.stwBudgetrestriktionen_US
dc.subject.stwRent Seekingen_US
dc.subject.stwHaushaltsdefiziten_US
dc.subject.stwÖffentliche Schuldenen_US
dc.subject.stwTeilstaaten_US
dc.subject.stwLänderfinanzenen_US
dc.subject.stwDeutschlanden_US
dc.titleInstitutionalized bailouts and fiscal policy : the consequences of soft budget constraintsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn612879917en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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