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Revenue autonomy preference in German state parliaments

Author

Listed:
  • Heinemann, Friedrich
  • Janeba, Eckhard
  • Moessinger, Marc-Daniel
  • Schröder, Christoph

Abstract

Fiscal federalism in Germany is characterized by lacking sub-national tax autonomy and intensive fiscal equalization. Due to a sunset clause, the current equalization system has to be renegotiated by the year 2019. Against this backdrop, this contribution studies the reform preferences of members of state parliaments. The study makes use of a self-conducted survey among the members of all 16 German state parliaments. It tests to which extent the preferences of these veto players for tax autonomy and fiscal equalization are driven by states' self-interest, party ideology and individual characteristics. The results are helpful to understand the political-economic constraints of federal reforms. They indicate that besides the individual ideological position higher state wealth and lower debt levels are linked to larger reform support. Therefore, a promising new reform would have to address budgetary legacies like high pre-existing debt.

Suggested Citation

  • Heinemann, Friedrich & Janeba, Eckhard & Moessinger, Marc-Daniel & Schröder, Christoph, 2013. "Revenue autonomy preference in German state parliaments," ZEW Discussion Papers 13-090, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:13090
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    Cited by:

    1. Foremny, Dirk & Freier, Ronny & Moessinger, Marc-Daniel & Yeter, Mustafa, 2014. "Overlapping political budget cycles in the legislative and the executive," ZEW Discussion Papers 14-099, ZEW - Leibniz Centre for European Economic Research.
    2. Heinemann, Friedrich & Janeba, Eckhard & Schröder, Christoph & Streif, Frank, 2016. "Fiscal rules and compliance expectations – Evidence for the German debt brake," Journal of Public Economics, Elsevier, vol. 142(C), pages 11-23.

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    More about this item

    Keywords

    fiscal equalization; tax competition; fiscal federalism;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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