The dissertation comprises six self-contained chapters focused on incentives in fiscal federalism, specifically within Germany's federal system. It explores both political and fiscal incentives. Chapters 2 and 3 delve into election cycles through the lens of political business cycle theories. Chapter 2 investigates whether German municipalities experience election cycles in their fee structures, revealing that municipalities leverage their fee-setting authority to enhance electoral prospects. Chapter 3 examines salary increases for German state MPs, finding no evidence that electoral motives affect these increases. Chapters 4 and 5 analyze the impact of government ideology on economic policymaking. Chapter 4 assesses whether left-wing governments are more effective at reducing income inequality among civil servants, concluding that they are not significantly more active than their center or right-wing counterparts. Chapter 5 evaluates tax policies following the 2006 fiscal constitution reform, which allowed states to set real-estate transfer tax rates. The findings indicate that left-wing governments are more proactive in raising these tax rates compared to right-wing governments. Chapters 6 and 7 investigate fiscal incentives related to the German fiscal equalization scheme, which redistributes revenues among federal and state levels. The analysis shows that this equalization significantly influences state tax policies, encou
