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Parties Matter in Allocating Expenditures: Evidence from Germany

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  • Niklas Potrafke

Abstract

I test if parties matter with respect to the allocation of public expenditures in Germany. Considering the allocation of rights and duties due to the federal structure, two econometric models are estimated. First, a SURE model analyses spending at the federal level for the period from 1950 to 2003 and finds evidence for partisan politics and election year effects. Second, I examine the spending behaviour in the states from 1974 to 2004 in a panel data framework. In comparison to the federal level, policy has weaker impacts on the allocation of expenditures in the states.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 652.

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Length: 27 p.
Date of creation: 2006
Date of revision:
Handle: RePEc:diw:diwwpp:dp652

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Keywords: Allocation of public expenditures; partisan politics; fiscal federalism;

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Cited by:
  1. Ulrich Oberndorfer & Viktor Steiner, 2007. "Generationen- oder Parteienkonflikt? Eine empirische Analyse der deutschen Hochschulausgaben," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 8(2), pages 165-183, 03.
  2. Oberndorfer, Ulrich & Steiner, Viktor, 2006. "Intergenerational Conflict, Partisan Politics, and Public Higher Education Spending: Evidence from the German States," IZA Discussion Papers 2417, Institute for the Study of Labor (IZA).
  3. Markus Tepe & Pieter Vanhuysse, 2009. "Educational business cycles," Public Choice, Springer, Springer, vol. 139(1), pages 61-82, April.
  4. Niklas Potrafke, 2007. "Social Expenditures as a Political Cue Ball?: OECD Countries under Examination," Discussion Papers of DIW Berlin 676, DIW Berlin, German Institute for Economic Research.
  5. Berger, Helge & Holler, Anika, 2007. "What determines fiscal policy? Evidence from German states," Discussion Papers 2008/12, Free University Berlin, School of Business & Economics.

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