Kostenkontrolle im Föderalismus

Credit is the backbone of capitalism because credit allows allocating resources efficiently to economic activities. For the case of distress, a bankruptcy regime is established which allows reviving viable but financially distressed businesses and to liquidate structurally distressed businesses in an orderly asset distribution procedure. Bankruptcy is ex ante of utmost importance because it incentivizes debtors and creditors to adjust credit costs and lending practice to expect ex post outcomes. Bankruptcy has, however, been abolished under socialism leading to systems of soft budget constraints which are lenient towards inefficient managements. Since the fall of socialism, mixed capitalist-socialist economies prevail in most countries of the world with bankruptcy procedures for private enterprises, but not for public entities, more importantly, even restructuring procedures are not available for these public establishments. Instead, debt brakes should do the job. However, debt brakes invite governments to externalize public debts and to shift them to lower entities - from the state to the local level - leading to “institutional incongruence”, i. e. the drifting apart of the circles of beneficiaries, decision makers, and taxpayers. Three models of institutional congruence are analyzed, ranging between vertical fiscal control and fiscal autonomy. The logical consequence of fiscal autonomy is then the establishment of restructuring procedures, which are presented along the procedures of Chapter 9 of the US Bankruptcy Act and private ordering procedures such like those of the Paris and the London Club.