Tax projections in German states – manipulated by opportunistic incumbent parties?
AbstractThis paper analyses the accuracy of the tax projections of West German states from a public choice perspective. It argues that state governments have the possibility and face incentives to manipulate tax projections. Evidence for the years 1992 – 2002 reveals a general upward bias in tax projections in election as well as non-election years. The degree of overestimation is higher, the less popular the incumbent party is. Partisanship and elections have no significant influence. To improve external control of state governments in the budget process, the process of tax projections must be made transparent. --
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Bibliographic InfoPaper provided by Justus Liebig University Giessen, Fachbereich Wirtschaftswissenschaften in its series Finanzwissenschaftliche Arbeitspapiere with number 74.
Date of creation: 2006
Date of revision:
tax projections; political parties; budget process; public expenditures;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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