...Strong Institutional Framework: A highly stable regulatory regime is in place for German local and regional governments (LRGs), which covers Laender (states) and municipalities (including counties, districts, cities and villages). LRGs' responsibilities are clearly defined and usually adequately funded. Finances are regulated and monitored by the Court of Accounts in the case of Laender and supervised by the local authorities of each respective state. Transparency of Accounts: German LRGs are required to publish a budget and an execution report with a medium-term financial plan. Although most Laender publish this information on their web pages, this is not yet common practice for all municipalities. The aggregate data for the sector is available on the Ministry of Finance's website. Laender's budgets are usually based on cash accounting; municipalities are required to adopt accrual accounting. Limited Fiscal Flexibility: There is a tax-sharing system in place for the main taxes between...
