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http://hdl.handle.net/10419/66119
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| Title: | | Debt rule federalism: The case of Germany  |
| Authors: | | Ciaglia, Sarah Heinemann, Friedrich |
| Issue Date: | | 2012 |
| Series/Report no.: | | ZEW Discussion Papers 12-067 |
| Abstract: | | 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. |
| Subjects: | | fiscal rules debt brake Germany fiscal federalism |
| JEL: | | H63 H74 H77 |
| Persistent Identifier of the first edition: | | urn:nbn:de:bsz:180-madoc-326197 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des ZEW ZEW Discussion Papers
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