Soft Budget Constraints in German Fiscal Federalism

Dr. Björn Gehrmann

doi:10.5771/9783845226484

Summary

Der Finanzföderalismus zeichnet sich durch eine inhärente Ineffizienz aus, die gerade in den letzten zwei Jahrzehnten besonders sichtbar wurde: nachlässige Budgetbeschränkungen. Der Band trägt zur Erforschung des Finanzföderalismus mit der Absicht bei, die Erwartungen an subnationale Rettungsprogramme zu erklären und kosteneffiziente Lösungen zu empfehlen.

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Bibliographic data

Copyright year: 2010
ISBN-Print: 978-3-8329-5885-5
ISBN-Online: 978-3-8452-2648-4
Publisher: Nomos, Baden-Baden
Series: Neue Studien zur Politischen Ökonomie
Volume: 9
Language: English
Pages: 225
Product type: Book Titles

Titelei/Inhaltsverzeichnis No access Pages 2 - 26
1. 1. 1. 1. The Decentralization Theorem No access
      2. Optimal Jurisdictional Size No access
      3. Interjurisdictional Spillovers and Intergovernmental Grants No access
      4. Institutional Congruence No access
    2. Positive Vertical FGT: Competition among Tiers No access
    3. Normative Horizontal FGT: Locational Efficiency No access
    4. Positive Horizontal FGT: Competition among Jurisdictions No access
    5. Summary No access
  2. 1. 1. Methodological Individualism No access
      2. Transaction Costs No access
      3. Property Rights No access
      4. Agency Costs No access
      5. Incomplete contracts No access
    2. The ‘Industrial Organization’ of States No access
    3. Federal Governance No access
    4. 1. Accountability and Spillovers No access
      2. Innovation No access
    5. Positive Vertical SGT: Yardstick Competition No access
    6. Normative Horizontal SGT: Coasian Contracts No access
    7. Positive Horizontal SGT: Yardstick Competition No access
    8. Summary No access
  3. Interim Summary: Towards Evolutionary Federalism No access Pages 64 - 66
2. 1. Federalism in the Basic Law No access Pages 66 - 70
  2. 1. Three-tiered system No access
    2. 1. Legislative No access
      2. Executive No access
      3. Judiciary No access
    3. Vertical Federal Solidarity No access
  3. 1. Equality of the Länder No access
    2. Horizontal Federal Solidarity No access
  4. 1. 1. The Principle of Connexity No access
      2. The Principle of Budgetary Autonomy (Art. 109 GG) No access
      3. The Division of Fiscal Competences (Art. 105 GG) No access
      4. Borrowing Restrictions (Art. 115 GG) No access
    2. 1. The Länder level: Interstate Equalization No access
      2. The Municipal Level: Intrastate Equalization No access
  5. No Bankruptcy of Corporations under Public Law No access Pages 88 - 89
  6. 1. Centralization No access
    2. Institutional Incongruence No access
    3. The Soft Budget Constraint No access
    4. Incentive Distortion: Inter- and Intrastate Equalization No access
  7. Interim Summary: German Federalism – Stable, Static and Stagnating No access Pages 95 - 98
1. 1. The Soft Budget Constraint: Definition and Rationale No access Pages 99 - 103
  2. 1. The Bailout Game No access
    2. 1. The Model No access
      2. Systemic Relevance No access
      3. Deficit Sensitivity No access
      4. Return on Political Investment No access
      5. Two Fictitious Calculations No access
  3. The Market-Induced Soft Budget Constraint No access Pages 127 - 130
  4. 1. International Financial Crises No access
    2. 1. Federal Tier: Sovereign Bankruptcy No access
      2. Länder Tier: State Bankruptcy No access
      3. Municipal Tier: Municipal Bankruptcy No access
    3. 1. The German Länder No access
      2. Calculation for Brandenburg (with and without Berlin) No access
      3. Application to the Private Sector: Firm and Bank Bailouts No access
  5. Interim Summary: Size Matters No access Pages 145 - 148
2. 1. 1. Corporate vs. Public Sources of Finance No access
    2. Corporate vs. Public Financial Management No access
    3. Summary: Similarities and Differences No access
  2. 1. The Separation of Ownership and Control No access
    2. The Agency Costs of Equity: Overinvestment No access
    3. The Separation of Liability and Control No access
    4. The Agency Costs of Debt: Underinvestment and Overborrowing No access
    5. Summary: The Equivalence of Firms and Governments in Germany No access
  3. 1. Corporate Governance: Definition and Rationale No access
    2. 1. Bonuses No access
      2. Stock Options No access
    3. 1. Dilution No access
      2. Concentration No access
    4. Control regimes No access
    5. Liability regimes No access
    6. Regulatory regimes No access
  4. 1. From Corporate Governance to Fiscal Governance No access
    2. Fiscal Governance: Definition and Rationale No access
    3. 1. Performance-based bonuses No access
      2. Rating-based bonuses No access
    4. 1. Dilution No access
      2. Concentration No access
    5. 1. Coalition Decision No access
      2. Parliamentary Impeachment No access
    6. 1. Receivership No access
      2. Bailout No access
      3. Public Bankruptcy No access
      4. Abolition of Debt Financing No access
    7. 1. ‘National Stability Pact’ No access
      2. Constitutional Debt Brake No access
      3. Balanced Budget Rule No access
      4. Lending Ceilings No access
  5. Interim Summary: Agency Cost-Effective Governance No access Pages 188 - 190
1. 1. 1. Reward Regimes: Performance-Based Pay No access
    2. Control Regimes: Coalition Decision and Impeachment No access
  2. 1. Ownership Regimes: Reform of Political Geography No access
    2. Liability Regimes: Alignment of Liability and Control No access
  3. Six Reform Scenarios No access Pages 195 - 197
  4. Interim Summary: Good Fiscal Governance No access Pages 197 - 198
2. 1. 1. Federal Reform Commission II No access
    2. Party Positions No access
    3. Reform of Federal Political Geography No access
    4. Reform of Municipal Political Geography No access
    5. Alignment of Liability and Control No access
  2. 1. Spatial Voting Models No access
    2. The Political Economy of the Alignment of Liability and Control No access
    3. The Political Economy of a Reform of Federal Geography No access
    4. The Results of the Federal Reform Commission II No access
  3. Interim Summary: Germany’s Agency Cost-Ineffective Federalism No access Pages 209 - 210
Concluding Remarks No access Pages 211 - 214
Literature No access Pages 215 - 225