Study of Surveys Conducted in All 16 German State Parliaments
Members of state parliaments have faith in adhering to the debt brake in their federal state if they belong to a governing party. Politicians who sit on the opposition benches are much more sceptical about this. Opposition members of parliament who then take office after winning a state election suddenly become a lot more optimistic regarding the feasibility of balancing the domestic budget. On the contrary, pessimism grows amongst members of parliament whose party loses control of government. These are the insights provided in a new study by ZEW Mannheim in cooperation with the University of Mannheim, which was conducted within the framework of the Collaborative Research Center on The Political Economy of Reform funded by the German Research Foundation.
“Our study is good news with regard to the pursuit of long-term policy objectives. Rules such as the debt brake would not work if they were called into question every time there is a change in government. This study shows that politicians in the majority of parties identify with the debt brake when they sit on the government bench,” co-author of the study Professor Friedrich Heinemann, head of ZEW’s “Corporate Taxation and Public Finance” Research Department, explains.
Consequences of crises are also assessed differently
The study by ZEW Mannheim is based on two surveys taken by all 16 federal state parliaments in Germany, which were conducted in two different legislative terms, once 2011-12 and once 2014-15. With over 600 parliamentarians, around a third of all MPs took part in the survey.
More than 100 MPs that were involved in both surveys have either switched from opposition to government or vice versa between both survey waves. This change made it possible to measure the causal impact of this change in perspective. Even when other factors are taken into account, such as party affiliation, age and gender, a very large government impact is noticeable. Members of parliament who belong to a governing party are much more confident that their home state can guarantee a balanced domestic budget in accordance with Germany’s constitution, compared to colleagues who sit on the opposition benches.
Even though those surveyed at the time could not anticipate the grave impacts of the COVID-19 pandemic on government debt, they were confronted with different burdens on the government budget when the second survey took place in 2015. At the time, the influx of people seeking refuge in Germany led to unexpected increases in government expenditure. It shows how unanticipated burdens on the government budget lead to strikingly different expectations on adherence to the debt brake depending on whether a member of parliament belongs to a governing party or not. Members of parliament belonging to a governing party are, contrary to those in opposition, typically more convinced that the government in their federal state is able to manage new fiscal burdens and can still balance the budget in accordance with the German Basic Law.
AfD is far more pessimistic than other opposition parties
In contrast to the typically strong impact of the government-opposition status, party affiliation hardly matters – with one clear exception on the right of the political spectrum: AfD members of parliament who have so far always sat in the opposition, are, in comparison to other opposition parties, considerably more pessimistic with regard to the adherence to the debt brake. The AfD result is consistent with insights from research on populism. “Voters of populist parties signalise deep mistrust that the mainstream parties can deal with problems that arise in the future. This becomes apparent amongst members of parliament themselves belonging to such parties, who do not believe in adhering to the debt brake even in times of economic prosperity,” Friedrich Heinemann explains.