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Economic Freedom and Government Ideology Across the German States

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  • Niklas Potrafke

    (Department of Economics, University of Konstanz, Germany)

Abstract

This paper examines whether government ideology influenced economic freedom across the German states. The results show that in former West Germany rightwing governments promoted economic freedom, whereas leftwing governments confined it. In former East Germany, however, rightwing governments have not been associated with propagating economic freedom. This finding appears to conflict with the common notion of policy convergence at the federal level. In fact, the observed variation in political preferences across states may indicate that politicians gratify the local electorate and, in return, offer moderate policies at the federal level.

Suggested Citation

  • Niklas Potrafke, 2011. "Economic Freedom and Government Ideology Across the German States," Working Paper Series of the Department of Economics, University of Konstanz 2011-41, Department of Economics, University of Konstanz.
    • Handle: RePEc:knz:dpteco:1141
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    More about this item

    Keywords

    economic freedom; government and political ideology; institutions; panel data;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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