EconPapers    
Economics at your fingertips  
 

Will the German Debt Brake Succeed? Survey Evidence from State Politicians

Frank Streif, Friedrich Heinemann (), Eckhard Janeba () and Christoph Schröder ()

Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: The present paper analyzes expectations of German politicians about the German debt brake (Schuldenbremse), which became part of the German constitution in 2009. This fiscal rule requires the federal government and the German states to run a (cyclically adjusted) budget deficit of no more than 0.35% of GDP starting in 2016 and zero % starting in 2020, respectively. We use unique survey data from more than 630 politicians at the state level to systematically study the subjective beliefs in the compli-ance and desirability of the debt brake. We find that i) state politicians who belong to the coalition parties of the current federal government coalition believe more strongly in federal government compliance, ii) state politicians who belong to the party of the current state government believe more strongly in the own state s compliance, iii) worse state fiscal conditions and stronger beliefs in lack of credible enforcement of the debt brake lower the perceived likelihood of compliance, iv) there often is a large discrepancy in the assessed probability of compliance between politicians from the own state vs. politicians from other states, v) beliefs into the consequences of non-compliance with the debt brake are quite heterogeneous, and vi) politicians often find the debt brake more desirable than probable.

JEL-codes: H60 H70 H77 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/80044/1/VfS_2013_pid_714.pdf (application/pdf)

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:zbw:vfsc13:80044

Access Statistics for this paper

More papers in Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2020-06-30
Handle: RePEc:zbw:vfsc13:80044