Incumbency and expectations of fiscal rule compliance: Evidence from surveys of German policy makers

We analyze politicians’ expectations about future compliance with a fiscal rule, and in particular the dependence of on their role parliament (opposition vs. incumbent government coalition). study this context German debt brake, which became constitutional provision 2009 but is binding for sub-national states from 2020 onwards only. Via unique survey, we parliamentarians all 16 state parliaments. A strong incumbency effect identified who move out government, showing that politicians governing coalition are more optimistic than those opposition. negative shock has little effects former, strongly one latter. offer theoretical model consistent an increasing over time, as result wishful thinking by concerning reelection chances dynamic reputation policymakers when rule achieved. • Analyze politicians' brake. Use customized survey Identify effect: Theoretical builds chances.