Federalism, Budget Deficits and Public Debt: On the Reform of Germany's Fiscal Constitution
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Lars P. Feld
Abstract
In 2009, new debt restrictions in the Grundgesetz (the German constitution) and in federal legislation passed both chambers of the German parliament by two-thirds majorities, imposing a more rigid debt regime on federal and Länder (states’) fiscal policies than previous constitutional provisions entailed. In this paper, the new provisions are evaluated against the background of the problems of German fiscal federalism that they are supposed to solve, as well as the possible solutions discussed in constitutional economics. We thereby mainly draw on recent evidence from Switzerland. This reform is an important step to remedy the shortcomings of German fiscal federalism, but we argue that it needs to be complemented by tax autonomy for the German Länder.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Introduction: Ex Uno Plures. Welfare Without Illusion
- Polycentric Polity: Genuine vs. Spurious Federalism
- Fiscal Equity In Federal Systems
- Federalism, Budget Deficits and Public Debt: On the Reform of Germany's Fiscal Constitution
- How Federalism Protects Future Generations from Today's Public Debts
- Raising vs. Leveling in the Social Organization of Welfare
- The Influence of Public Institutions on the Shadow Economy: An Empirical Investigation for OECD Countries
- Fiscal Federalism at the Ballot Box: The Relevance of Expressive Voting
- Federalism as an Effective Antidote to Terrorism
Articles in the same Issue
- Article
- Introduction: Ex Uno Plures. Welfare Without Illusion
- Polycentric Polity: Genuine vs. Spurious Federalism
- Fiscal Equity In Federal Systems
- Federalism, Budget Deficits and Public Debt: On the Reform of Germany's Fiscal Constitution
- How Federalism Protects Future Generations from Today's Public Debts
- Raising vs. Leveling in the Social Organization of Welfare
- The Influence of Public Institutions on the Shadow Economy: An Empirical Investigation for OECD Countries
- Fiscal Federalism at the Ballot Box: The Relevance of Expressive Voting
- Federalism as an Effective Antidote to Terrorism
