This paper analyses the rather large yield spreads of the debt of Swiss cantons (defined as the difference between yield of canton and federal bonds) using data for bonds issued between 1990 and 1998. A regression analysis with and without correction for selection bias of 84 non-callable bond...

Recent empirical literature has shown that the determination of intergovernmental grants is highly influenced by the political bargaining power of the recipient states. In these models federal politicians are assumed to buy the support of state voters, state politicians and state interest groups...

Fiscal rules are mentioned as instruments to commit political actors on long-term fiscal sustainability. However, fiscal rules may have stronger effects on projected than on realized fiscal outcomes because of window-dressing measures or because they alter the bargaining situation in the budget...