Zur Nachhaltigkeit der Länderhaushalte : eine empirische Analyse

In Germany the sustainability of fiscal policy is determined to a substantial part by the federal states (Bundeslaender). Their portion of the public debt amounts to nearly forty percent. In this study we test the sustainability of debt policies of the federal states on the basis of their intertemporal budget constraint. The fiscal policy of the federal states taken collectively is not sustainable. The same holds for the new eastern Laender and the city states (Stadtstaaten) whereas the fiscal policy of the western Laender seems to be consistent with the present-value budget constraint. However, econometric tests for the individual Laender show that the requirement for fiscal sustainability is fulfilled only by two western Laender, Hesse and North-Rhine Westphalia, and one eastern Land (Saxony).