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...

Does increasing transparency improve fiscal policy behavior of local governments? One way this could take place is via Yardstick Competition between incumbents of neighboring municipalities. This paper contributes to the literature by introducing a simple model which employs probabilistic voting...