Ideology and fiscal policy: quasi-experimental evidence from the German States

Thushyanthan Baskaran

No 144, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: Is government ideology important for fiscal policy? I study this question with data from all German States over the period 1975-2005. To identify the effect of ideology, I rely on a fuzzy regression discontinuity design. I find that left-wing state governments spend more than state governments with right-wing and mixed ideology. Deficits of left-wing governments are larger than those of right-wing governments but smaller than those of governments with mixed ideology. These results are robust to sensitivity tests.

Keywords: government ideology; fiscal policy; fiscal federalism (search for similar items in EconPapers)
JEL-codes: D72 D78 E62 H72 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-pbe and nep-pol
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:144

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