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Leaders’ Impact on Public Spending Priorities: The Case of the German Laender

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  • Bernd Hayo
  • Florian Neumeier

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.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 65 (2012)
Issue (Month): 4 (November)
Pages: 480-511

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Handle: RePEc:bla:kyklos:v:65:y:2012:i:4:p:480-511

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Cited by:
  1. Diaz-Serrano, Luis & Pérez, Jessica, 2013. "Do More Educated Leaders Raise Citizens' Education?," IZA Discussion Papers 7661, Institute for the Study of Labor (IZA).
  2. Bernd Hayo & Stefan Voigt, 2012. "Explaining Constitutional Change: The Case of Judicial Independence," CESifo Working Paper Series 4032, CESifo Group Munich.
  3. Bernd Hayo & Florian Neumeier, 2013. "Political Leaders Socioeconomic Background and Public Budget Deficits: Evidence from OECD Countries," MAGKS Papers on Economics 201308, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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