11453 2024 - On the Fiscal Sustainability of Swiss Cantons Since 1905

Table of Contents

• CESifo 3
• Working Paper No. 11453 3
• JEL-Codes H620 H770 H720 C230. 3
• Keywords fiscal sustainability fiscal institutions Swiss Cantons. 3
• Yannick Bury 3
• Walter Eucken Institute 3
• Goethestrasse 10 3
• Germany 79100 Freiburg 3
• Lars P. Feld 3
• Walter Eucken Institute 3
• Albert Ludwigs University Freiburg 3
• Goethestrasse 10 3
• Germany 79100 Freiburg 3
• Ekkehard A. Köhler 3
• University of Siegen ZöBiS 3
• Kohlbettstrasse 17 3
• Germany 57068 Siegen 3
• Ekkehard.Koehleruni-siegen.de 3
• This version 31 October 2024 3
• -2- 4
• 1. Introduction 4
• -3- 5
• 2. Theoretical Approaches to Fiscal Sustainability 5
• -4- 6
• 3. Institutional Background and Previous Evidence on Fiscal Sustainability of Swiss Cantons 6
• -5- 7
• 4. Empirical Framework and Data 7
• -6- 8
• -7- 9
• Figure 1 Cantonal Debt Revenues and Expenditures relative to GDP 1905-2017 9
• 5. Canton Specific Results 9
• -8- 10
• -9- 11
• Table 1 Canton-Specific Results 1905-2017 11
• -10- 12
• 6. Results for the Subnational Level as a Whole 12
• 6.1 Choosing the Panel Estimator 12
• -11- 13
• Table 2 Panel Time Series Evidence 13
• -12- 14
• 6.2 Results for the Panel of Cantons 14
• -13- 15
• Table 3 Common-Correlated-Effects Mean Group CCEMG Estimation of Fiscal Reaction Functions 15
• -14- 16
• 6.3 Do Fiscal Rules Explain Fiscal Reactions 16
• -15- 17
• Table 4 CCEMG Estimation of Fiscal Reaction Functions Including Fiscal Rules 17
• 7. Conclusion 17
• -16- 18
• Literature 18
• -17- 19
• -18- 20
• -19- 21
• The Dilemma of Fiscal Federalism Grants and Fiscal Performance 21
• Hamilton s Paradox The Promise and Peril of Federalism 21
• -20- 22
• Appendix Canton Specific Graphs 22
• -21- 23
• -22- 24