Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56501
Authors: 
Hayo, Bernd
Neumeier, Florian
Year of Publication: 
2012
Series/Report no.: 
Joint discussion paper series in economics 09-2012
Abstract: 
We examine determinants of the composition of public expenditure in the German Laender (states) over the period 1993-2008, as the Laender exhibit a high degree of institutional and political homogeneity and are endowed with extensive fiscal competences. Our prime contribution is an investigation into how political leaders' socioeconomic background influences public spending priorities. Applying sociological theory, we link preferences for the composition of public spending to social status. In contrast to approaches relying on political budget cycles or partisan theory, we find strong and theory-consistent evidence that prime ministers tend to favour fiscal policies supporting the social class in which they are socialised. Governments led by prime ministers from a poor socioeconomic background spend significantly more on social security, education, health, infrastructure, and public safety.
Subjects: 
leadership
socioeconomic status
social rivalry
public expenditure composition
JEL: 
E62
H75
H76
Document Type: 
Working Paper

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