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

32 Pages Posted: 20 Oct 2012

See all articles by Florian Neumeier

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: November 2012

Abstract

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.

Suggested Citation

Neumeier, Florian, Leaders’ Impact on Public Spending Priorities: The Case of the German Laender (November 2012). Kyklos, Vol. 65, Issue 4, pp. 480-511, 2012, Available at SSRN: https://ssrn.com/abstract=2164567 or http://dx.doi.org/10.1111/kykl.12003

Florian Neumeier (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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