Political Leaders' Socioeconomic Background and Fiscal Performance in Germany

Joint Discussion Paper Series in Economics No. 41-2011

47 Pages Posted: 17 Oct 2011 Last revised: 11 Dec 2014

See all articles by Bernd Hayo

Bernd Hayo

University of Marburg - School of Business & Economics

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: October 7, 2011

Abstract

This paper investigates whether the socioeconomic status of the head of government helps explain fiscal performance. Applying sociological research that attributes differences in people’s ways of thinking and acting to their relative standing within society, we test whether the social status of German prime ministers can help explain differences in fiscal performance among the German Laender. Our empirical findings show that the tenures of prime ministers from a poorer socioeconomic background are associated with higher levels of public spending and debt financing. Social mobility has an asymmetric influence: social climbers adapt to their new class, whereas downwardly mobile prime ministers remain primarily influenced by their parents’ upper-class status.

Keywords: leadership, socioeconomic status, fiscal policy, public spending, public deficit

JEL Classification: E61, E62, H11, H72

Suggested Citation

Hayo, Bernd and Neumeier, Florian, Political Leaders' Socioeconomic Background and Fiscal Performance in Germany (October 7, 2011). Joint Discussion Paper Series in Economics No. 41-2011. Available at SSRN: https://ssrn.com/abstract=1945128 or http://dx.doi.org/10.2139/ssrn.1945128

Bernd Hayo (Contact Author)

University of Marburg - School of Business & Economics ( email )

Universitaetsstr. 24
Marburg, D-35032
Germany
++49(0)6421-28-23091 (Phone)
++49(0)6421-28-23193 (Fax)

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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