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Deficits and Divided Governments: The Case of the German ‘Bundesrat’

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  • Peter Schwarz

Abstract

The hypothesis of divided government is applied to the development of deficits in Germany. Since the party system is relatively stable, divided governments emerge not from coalitional governments, but rather from the bicameral structure of the country. Different majorities in the two chambers promote deficits, especially in the case of central government deficits. The results suggest that under different majorities in the two chambers deficits are more than 0.5%-Point higher. Further, it is indicated, that only ideological polarization, but not unstable majorities per se induces higher deficits. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • Peter Schwarz, 2006. "Deficits and Divided Governments: The Case of the German ‘Bundesrat’," Constitutional Political Economy, Springer, vol. 17(2), pages 87-101, June.
    • Handle: RePEc:kap:copoec:v:17:y:2006:i:2:p:87-101
    DOI: 10.1007/s10602-006-0003-9
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    Cited by:

    1. Corinna Ahlfeld, 2010. "Reputation Sells -Compensation Payments in the Political Sphere," Departmental Discussion Papers 145, University of Goettingen, Department of Economics.
    2. Jungbu Kim, 2010. "Political Institutions and Public R&D Expenditures in Democratic Countries," Working Papers EMS_2010_16, Research Institute, International University of Japan.

    More about this item

    Keywords

    Deficit; Bicameralism; Divided governments; H62; P16;
    All these keywords.

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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