Reducing “Dezemberfieber”: Wasteful Year-End Spending and a Solution
Abstract This article reviews the economic literature on wasteful year-end spending. In the German public sector, budgets expire at the end of the year, hence procurement officers have strong incentives to spend the remaining funds inefficiently just before they expire. The article discusses the kin...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | deu |
| Published: |
Sciendo
2022-06-01
|
| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-022-3213-5 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | Abstract This article reviews the economic literature on wasteful year-end spending. In the German public sector, budgets expire at the end of the year, hence procurement officers have strong incentives to spend the remaining funds inefficiently just before they expire. The article discusses the kinds of inefficiencies of this behavior, its causes, what is known about its extent, and proposes a solution: It should be possible to partially roll-over unused funds to the next year, which provides incentives not to wastefully spend everything at year-end. The part that is not rolled over can be used to support underfunded divisions. For comparison, the existing German public budget rules are briefly discussed. |
|---|---|
| ISSN: | 1613-978X |