CEU Electronic Theses and Dissertations, 2015
| Author | Stiffler, Myles Obadiah |
|---|---|
| Title | Fiscal Federalism and Insolvency: Contrasting Cases of the U.S.A. and Germany |
| Summary | This MA thesis identifies decisive characteristics of subnational debt frameworks and fiscal regulation and their features under fiscal federalism in two contrasting federal states, the United States of America (U.S.) and the Federal Republic of Germany. These two cases are used to assess how differing fiscal federal structures, bailout expectations and insolvency frameworks can either mitigate or facilitate fiscal irresponsibility and moral hazard between borrowers and lenders. This research concludes that while the U.S. and Germany have similar controls on borrowing, their unique fiscal federal structures make them divergent in insolvency outcomes for SNGs. The U.S.’s fiscal framework leads to extensive autonomy at the subnational level with regard to fiscal decision-making, allowing for flexibility with fluctuations in both revenues and expenditures. Germany’s strong observance of harmonization policies, evident in their fiscal equalization system, have burdened the federal government and made Länder exceptionally sensitive to fluctuations in intergovernmental transfers. This research further concludes that because of these differing fiscal federal systems and the lack of an insolvency framework in Germany, that the U.S. system is more conducive to preventing both lender and borrower moral hazard. |
| Supervisor | Bokros, Lajos; Jordana, Jacint |
| Department | Public Policy MA |
| Full text | https://www.etd.ceu.edu/2015/stiffler_myles.pdf |
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