Budgeting as informed guess work: Has the German budgetary process lost direction?

Budgeting in Germany is characterized by procedural continuities which have developed more and more into dignified parts of the German financial constitution. This is true for the way budgets are prepared at the executive level, controlled in parliament and audited. Procedural accuracies do, however, mean little for budgetary outcomes. Typical for these is that hard choices tend to be avoided by the frequent use of off-budget funds, and that, so far, mere lip-service has been paid to the problem of reducing the deficit. Budgetary compromises necessary to reconcile cut-back rhetoric and ever-growing expenditure demands have become more complicated because in most cases the support of a majority of the state governments is needed when the federal government either plans changes in tax laws or attempts to enact legislation aimed at the reform of entitlements. By adding huge new expenditures and five more states with their own agenda, German unification has sharpened the contradictions of the budgetary process to the point where even the political decision-makers themselves begin to believe that they have lost control of both the scope and the rationale of expenditures.