30 research outputs found
Do personal characteristics of finance ministers affect the development of public debt?
Using a unique dataset of personal characteristics of national finance ministers in Europe
(1980 – 2010), I show that especially a finance minister’s experience affects the development
of public debt. Both a finance minister’s experience gained in office and his political
experience have an impact: The change of the debt to GDP ratio is negative the more
experience a finance minister has gained as a minister of finance or in former positions as a
national cabinet member. While the former result suffers from potential endogeneity, several
arguments support that the latter result can be interpreted in a causal way. In contrast, a
finance minister’s educational background or ideology have no significant impact on public
debt changes
Intrinsic work motivation and pension reform acceptance
Although demographic change leaves pay-as-you-go pension systems unsustainable, reforms, such as a higher pension age, are highly unpopular. This contribution looks into the role of intrinsic motivation as a driver for pension reform acceptance. Theoretical reasoning suggests that this driver should be relevant: The choice among different pension reform options (increasing pension age, increasing contributions, cutting pensions) can be analyzed within the framework of an optimal job separation decision. In this optimization, intrinsic job satisfaction matters as it decreases the subjective costs of a higher pension age. We test this key hypothesis on the basis of the German General Social Survey (ALLBUS). The results are unambiguous: In addition to factors such as age or education, the inclusion of intrinsic work motivation helps to improve our prediction of an individual's reform orientation. Our results are of importance for reform acceptance beyond the specific topic of pension reform. They point to the fact that the support for welfare state reform is also decided at the workplace. --Pension system,reforms,pension age,ALLBUS
Mayoral candidate characteristics in the state of Baden-Wuerttemberg
This database was created in the context of the project "Ämterwettbewerb, Qualitiät von Politikern und fiskalische Performance – Eine empirische Analyse deutscher Kommunen", running from September 2012 until February 2015. The project members gratefully acknowledge the financial support from the Fritz Thyssen foundation (project number 10.12.1.094). The database comprises detailed information on the personal characteristics of candidates at mayoral elections in the German state of Baden-Wuerttemberg for the period 1973–2010. In total, 2,442 mayoral candidates from 1,184 mayoral elections are included
Do fiscal rules constrain fiscal policy? : A meta-regression-analysis
We implement a meta-regression-analysis for the budgetary impact of numerical fiscal rules. Based on 30 studies published in the last decade, we offer a consensus estimate with respect to the level of statistical significance, provide suggestive evidence
for the effect size, and identify study features of relevance for the measured impact of fiscal rules. Overall, the results document a constraining impact of rules. However, this impact is weakened if refined identification strategies are employed. Moreover, the results provide evidence for a publication bias in which journals are more likely to report constraining and statistically significant effects compared to
working papers. We further provide recommendations for future research on the budgetary impact of fiscal rules
On tax evasion, entrepreneurial generosity and fungible assets
We estimate the effects of income from various sources on charitable giving using administrative German income tax data. We demonstrate that charitable con-
tributions are not uniformly affected by different income types. While business and capital income exhibit a positive effect, the remaining income sources do not in uence charity on statistically significant levels. This exercise is not new and
has been conducted for (at least) three different purposes: 1) Relying on the described results, a public finance researcher would state that business and capital income are more prone to tax evasion than the remaining income sources. 2) An entrepreneurship researcher would conclude that business owners are more generous than employees, and 3) a researcher testing the validity of the life cycle theory (or
its behavioral counterpart) would refute the fungibility of income. In contrast, we argue that none of these approaches can answer the intended question if solicitation effects of fundraising or measurement error of the income sources are not taken into
account. Applying a fixed effect poisson model, we demonstrate that under certain assumptions the results can have a meaningful interpretation
Intrinsic work motivation and pension reform acceptance
Although demographic change leaves pay-as-you-go pension systems unsustainable, reforms, such as a higher pension age, are highly unpopular. This contribution looks into the role of intrinsic motivation as a driver for pension reform acceptance. Theoretical reasoning suggests that this driver should be relevant: The choice among different pension reform options (increasing pension age, increasing contributions, cutting pensions) can be analyzed within the framework of an optimal job separation decision. In this optimization, intrinsic job satisfaction matters as it decreases the subjective costs of a higher pension age. We test this key hypothesis on the basis of the German General Social Survey (ALLBUS). The results are unambiguous: In addition to factors such as age or education, the inclusion of intrinsic work motivation helps to improve our prediction of an individual’s reform orientation. Our results are of importance for reform acceptance beyond the specific topic of pension reform. They point to the fact that the support for welfare state reform is also decided at the workplace
How Europe can deliver: Optimising the division of competences among the EU and its member states
This study aims to give guidance for a better-performing EU through an improved allocation of competences between the European Union and its member states. The study analyses eight specific policies from a wide range of fields with respect to their preferable assignment. The analysis applies a unified quantified approach and is precise in its definition of ‘counterfactuals’. These counterfactuals are understood as conceptual alternatives to the allocation of competences under the status quo. As such, they either relate to a new European competence (if the policy is currently a national responsibility) or a new national competence (if the policy is currently assigned to the EU). The comprehensive, quantification-based assessments indicate that it would be preferable to have responsibility for higher education and providing farmers with income support at the national level. Conversely, a shift of competences to the EU level would be advantageous when it comes to asylum policies, defence, corporate taxation, development aid and a (complementary) unemployment insurance scheme in the euro area. For one policy – railway freight transport – the findings are indeterminate. Overall, the study recommends a differentiated integration strategy comprising both new European policies and a roll-back of EU competences in other fields
Revenue autonomy preference in German state parliaments
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
The long-run effect of fiscal consolidation on economic growth : evidence from quantitative case studies
We contribute to the literature on the long-run effect of fiscal consolidation on economic growth by applying a novel method for quantitative case studies. Relying on a qualitative (narrative) definition of fiscal consolidations based on an examination of
historical policy documents and using the synthetic control method (SCM), we investigate the evolution of post-consolidation trajectories of economic growth in six case studies of OECD countries. In contrast to recent studies that reject the hypothesis of
non-Keynesian effects, our results do not offer clear-cut evidence on the long-run effect
of fiscal consolidation on economic growth. Half of the case studies point to a positive effect with the other half indicating a negative effect. We further do not find a specific effect of the strength of the fiscal adjustment and the type of consolidation, i.e., whether the consolidation is rather based on expenditure cuts or revenue increases
Sovereign bond market reactions to fiscal rules and no-bailout clauses: the Swiss experience
We investigate the political determinants of risk premiums which sub-national governments
in Switzerland have to pay for their sovereign bond emissions. For this purpose we
analyse financial market data from 288 tradable cantonal bonds in the period from 1981 to 2007.
Our main focus is on two different institutional factors. First, many of the Swiss cantons have
adopted strong fiscal rules. We find evidence that both the presence and the strength of these
fiscal rules contribute significantly to lower cantonal bond spreads. Second, we study the impact
of a credible no-bailout regime on the risk premia of potential guarantors. We make use of the
Leukerbad court decision in July 2003 which relieved the cantons from backing municipalities in
financial distress, thus leading to a fully credible no-bailout regime. Our results show that this
break lead to a reduction of cantonal risk premia by about 25 basis points. Moreover, it cut the
link between cantonal risk premia and the financial situation of the municipalities in its canton
which existed before. This demonstrates that a not fully credible no-bailout commitment can
entail high costs for the potential guarantor