Political biases despite external expert participation? An empirical analysis of tax revenue forecasts in Germany

Thiess Buettner () and Björn Kauder
Authors registered in the RePEc Author Service: Thiess Büttner

Public Choice, 2015, vol. 164, issue 3, 287-307

Abstract: This paper explores whether and how political biases arise in an institutional setting where revenue forecasting is delegated to a body that includes experts from institutions neither part of nor controlled by the government. The empirical analysis focuses on the performance of German federal tax revenue forecasts, in the preparation of which the advice of external experts has a long tradition as an institutional safeguard. While, on average, revenue forecasts turn out to be unbiased, the results show that the government exerts an influence. In particular, optimism/pessimism in the government’s GDP forecast helps to explain why the revenue forecast turns out too optimistic/pessimistic. In addition, governmental estimates of the revenue effects of tax-law changes are found to contribute to forecast errors. Copyright Springer Science+Business Media New York 2015

Keywords: Tax revenues; Forecasting; Rational prediction; External experts; Consensus forecast; Fiscal councils; Budgeting; H68; E32; E62 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11127-015-0279-2 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:164:y:2015:i:3:p:287-307

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

DOI: 10.1007/s11127-015-0279-2

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().