The paper describes the evolution of municipal bailouts in Germany since the first bailout programmes in the 1980s and provides explanations on differences regarding design, time of implementation and impacts of these programmes. Different programme designs and timing of implementation can be explained by differing problem pressure, political guiding principles and fiscal capacities of state governments. With regard to the impacts of these programmes, rigorous budget consolidation and debt reduction can be observed. However, these improvements go hand in hand with reduced capital expenditures, higher taxation and massive interference with local self-government.

The book chapter can be downloaded here: https://doi.org/10.1007/978-3-030-67466-3_13