Leaders’ Impact on Public Spending Priorities: The Case of the German Laender*

We examine determinants of the composition of public expenditure in the German Laender (states) over the period 1992–2008, as the Laender exhibit a high degree of institutional and political homogeneity and are endowed with extensive fiscal competences. Our prime contribution is an investigation int...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 09-2012)
Main Authors: Hayo, Bernd, Neumeier, Florian
Format: Work
Language:English
Published: Philipps-Universität Marburg 2012
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Online Access:PDF Full Text
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Summary:We examine determinants of the composition of public expenditure in the German Laender (states) over the period 1992–2008, as the Laender exhibit a high degree of institutional and political homogeneity and are endowed with extensive fiscal competences. Our prime contribution is an investigation into how political leaders’ socioeconomic background influences public spending priorities. Applying sociological theory, we link preferences for the composition of public spending to social status. In contrast to approaches relying on political budget cycles or partisan theory, we find strong and theory-consistent evidence that prime ministers tend to favour fiscal policies supporting the social class in which they are socialised. Governments led by prime ministers from a poor socioeconomic background spend significantly more on social security, education, health, infrastructure, and public safety.
Physical Description:36 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0123