In 2009, Germany introduced a new debt rule in its federal constitution (Grundgesetz). The socalled
‘debt brake’ prescribes a balanced budget for both the federal level and the states. However,
the states have leeway regarding transposition and specification of the national requirements
into their own state constitutions and budgetary laws. This analysis presents a comprehensive
comparison of the 16 state provisions. We develop an indicator which quantifies the
stringency of state rules (Strength of Fiscal Rule Indicator). Two results emerge: First, despite
the common constitutional rule at the federal level, the analysis reveals a considerable heterogeneity
across German states. Second, several highly indebted states miss the chance to make
their fiscal regime more credible. This finding corresponds to the disincentives of the German
federation. Due to bailout-guarantees enshrined in German federalism, German states do not
have incentives to impress bond markets through particularly strict budgetary rules.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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