Budgetary policy in the Federal Republic of Germany is viewed by many as being relatively inefficient as measured against the economic principle of Pareto-efficiency. It is shown that the "inefficiencies" in budgetary planning, execution and oversight can be related to the credible commitments...

The paper deals with the "year-end surge"-phenomenon ("Dezemberfieber"), i.e. the resources that are spent at the end of the fiscal year by the public bureaucracy to avoid cuts in their budgets in the following fiscal years. The peculiarities of the political process, especially the maximizing...