Revenue Autonomy Preference in German State Parliaments

45 Pages Posted: 7 Nov 2013

See all articles by Friedrich Heinemann

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Eckhard Janeba

University of Mannheim - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Marc-Daniel Moessinger

Centre for European Economic Research (ZEW)

Christoph Schroeder

ZEW – Leibniz Centre for European Economic Research

Date Written: October 15, 2013

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.

Keywords: fiscal equalization, tax competition, fiscal federalism

JEL Classification: H63, H74, H77

Suggested Citation

Heinemann, Friedrich and Janeba, Eckhard and Moessinger, Marc-Daniel and Schroeder, Christoph, Revenue Autonomy Preference in German State Parliaments (October 15, 2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-090. Available at SSRN: https://ssrn.com/abstract=2350764 or http://dx.doi.org/10.2139/ssrn.2350764

Friedrich Heinemann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Eckhard Janeba

University of Mannheim - Department of Economics ( email )

L7, 3-5
D-68131 Mannheim
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Marc-Daniel Moessinger

Centre for European Economic Research (ZEW) ( email )

L7,1
Mannheim, DE 68161
Germany
+49 621 1235 161 (Phone)
+49 621 1235 223 (Fax)

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=mdm

Christoph Schroeder

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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