I investigate how political uncertainty influences corporate investment decisions employinga unique panel dataset of German manufacturing firms. I use data on firms’ self-reportedinvestment realizations, plans and revisions. The firm-specific user cost of capital capturesthe current...

Using microdata that serve as the foundation of the ifo Business Climate Index, Germany’s leading business cycle indicator, I examine whether political uncertainty influences how firm owners perceive their present state and future development of business. I use state election months as...

Using an unbalanced panel of 27 OECD countries over the period 1970–2011, I examinewhether electoral motives influenced creative accounting. Governments engage in“below-the-line” operations, such as transactions in financial assets, that do not show upin the deficit figures but give rise...

We examine whether changes of government influence compliance with international agreements. We investigate compliance with the NATO two percent target to which all NATO countries committed themselves during the NATO summit in Wales in 2014. The dataset includes the military expenditure by NATO...

The political business cycle theories describe that election-motivated politicians manipulate economic policy-making. Election cycles occur in many fiscal variables, for example tax rates. I examine whether electoral motives influence communal fees in Germany. Fees have to be paid for the use of...

We examine the extent to which government ideology has influenced monetary policy in OECD countries since the 1970s. In line with important changes in the global econ-omy and differences across countries, regression results yield heterogeneous infer-ences depending on the time period and the...

Forty-two percent of Americans give different answers when asked, respectively, about the reasons for being rich and the reasons for being poor. We develop and test a theo-ry about support for redistribution in the presence of target-specific beliefs about the causes of low and high incomes. Our...

We estimate the causal effect of direct elections on the economic performance of politicians. Candidates running in direct elections to head local governments in the German state of Brandenburg need an absolute majority, and votes for the winner must represent at least 15% of eligible voters. If...

Spatial inequalities in publicly provided goods such as health care facilities have substantial socioeconomic effects. Little is known, however, as to why publicly provided goods diverge among urban and rural regions. We exploit narrow parliamentary majorities in German states between 1950 and...

Since 2007 the German state governments have been allowed by a constitutional reform to set real estate transfer tax rates. We exploit this reform and investigate whether government ideology predicts the levels and increases in the real estate transfer tax rates. The results show that leftwing...