Democratic fiscal policy in transformational times

The Universities of Jena and Mannheim, Dezernat Zukunft and the Kiel Institute for the World Economy are launching the project “Democratic fiscal policy in transformational times”. The joint research is being funded by the VolkswagenSiftung for five years with up to 1.3 million euros as part of the program “Transformation Knowledge about Democracies in Transition - Transdisciplinary Perspectives”.

Public finances play a decisive role in times of profound social change. In the coming years alone, 500 billion euros are to be invested in German infrastructure. However, these plans have also met with criticism: the high expenditure does not guarantee the hoped-for economic upturn. How a targeted fiscal policy can ensure economic stability is one of the core questions of the new research project.
We want to better understand the conditions and challenges of public finances. In times of profound social change, public finances play a decisive role. To this end, historical, legal and economic perspectives will be combined in order to develop proposals for a future-proof and democratically accepted fiscal policy.

The key questions are:

• What does a democratic framework for successful fiscal policy look like in times of upheaval?
• What can we learn from the history of German fiscal rules?
• How do government borrowing, taxes and spending cuts affect the economy and society?
• How can trust, predictability and sustainability of public finances be ensured in the democratic process?
• How can fiscal rules be designed in such a way that they enable transformation while ensuring social, ecological and financial sustainability?

Team

• Prof. Dr. Moritz Schularick, Kiel Institute for World Economy
• Prof. Dr. Michael Wolfgang Müller, Universität Mannheim
• Prof. Dr. Stefanie Middendorf, Universität Jena
• Dr. Max Krahé, Dezernat Zukunft e. V., Berlin