The Political Economy of Budget Deficits
The Political Economy of Budget Deficits

Author: Mr.Alberto Alesina

Publisher: International Monetary Fund

Published: 1994-08-01

Total Pages: 48

ISBN-13: 1451850689

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This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last 20 years rather than before? We begin by discussing the “tax smoothing” model and conclude that this approach alone cannot provide complete answers to these questions. We will then proceed to a discussion of political economy models, which we organize in six groups: (i) models based upon opportunistic policymakers and naive voters with “fiscal illusion;” (ii) models of intergenerational redistributions; (iii) models of debt as a strategic variable, linking the current government with the next one; (iv) models of coalition governments; (v) models of geographically dispersed interests; and (vi) models emphasizing the effects of budgetary institutions. We conclude by briefly discussing policy implications.

The Political Economy of Budget Deficits
The Political Economy of Budget Deficits

Author: Alberto Alesina

Publisher:

Published: 1994

Total Pages: 0

ISBN-13:

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This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last twenty years rather than before? We begin by discussing the 'tax smoothing' model and conclude that this approach alone cannot provide complete answers to these questions. We will then proceed to a discussion of political economy models, which we organize in six groups: i) Models based upon opportunistic policy makers and naive voters with 'fiscal illusion'; ii) Models of intergenerational redistributions; iii) Models of debt as a strategic variable, linking the current government with the next one; iv) Models of coalition governments; v) Models of geographically dispersed interests; vi) Models emphasizing the effects of budgetary institutions.

The Political Economy of Budget Deficits
The Political Economy of Budget Deficits

Author: Alberto F. Alesina

Publisher:

Published: 2006

Total Pages: 48

ISBN-13:

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This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last 20 years rather than before? We begin by discussing the quot;tax smoothingquot; model and conclude that this approach alone cannot provide complete answers to these questions. We will then proceed to a discussion of political economy models, which we organize in six groups: (i) models based upon opportunistic policymakers and naive voters with quot;fiscal illusion;quot; (ii) models of intergenerational redistributions; (iii) models of debt as a strategic variable, linking the current government with the next one; (iv) models of coalition governments; (v) models of geographically dispersed interests; and (vi) models emphasizing the effects of budgetary institutions.We conclude by briefly discussing policy implications.

Deficits, Debt, and Democracy
Deficits, Debt, and Democracy

Author: Richard E. Wagner

Publisher: Edward Elgar Publishing

Published: 2012-01-01

Total Pages: 209

ISBN-13: 0857934600

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This timely book reveals that the budget deficits and accumulating debts that plague modern democracies reflect a clash between two rationalities of governance: one of private property and one of common property. The clashing of these rationalities at various places in society creates forms of societal tectonics that play out through budgeting. The book demonstrates that while this clash is an inherent feature of democratic political economy, it can nonetheless be limited through embracing once again a constitution of liberty. Not all commons settings have tragic outcomes, of course, but tragic outcomes loom large in democratic processes because they entail conflict between two very different forms of substantive rationality; the political and market rationalities. These are both orders that contain interactions among participants, but the institutional frameworks that govern those interactions differ, generating democratic budgetary tragedies. Those tragedies, moreover, are inherent in the conflict between the different rationalities and so cannot be eliminated. They can, as this book argues, be reduced by restoring a constitution of liberty in place of the constitution of control that has taken shape throughout the west over the past century. Economists interested in public finance, public policy and political economy along with scholars of political science, public administration, law and political philosophy will find this book intriguing.

The Political Economy of Public Debt
The Political Economy of Public Debt

Author: Richard M. Salsman

Publisher: Edward Elgar Publishing

Published: 2017-02-24

Total Pages: 337

ISBN-13: 1785363387

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How have the most influential political economists of the past three centuries theorized about sovereign borrowing and shaped its now widespread use? That important question receives a comprehensive answer in this original work, featuring careful textual analysis and illuminating exhibits of public debt empirics since 1700. Beyond its value as a definitive, authoritative history of thought on public debt, this book rehabilitates and reintroduces a realist perspective into a contemporary debate now heavily dominated by pessimists and optimists alike.

Budget Deficits and Debt
Budget Deficits and Debt

Author: Siamack Shojai

Publisher: Bloomsbury Publishing USA

Published: 1999-01-30

Total Pages: 209

ISBN-13: 1567509312

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This edited collection is a critical evaluation of the impact of fiscal imbalances on the economy of industrialized and developing countries as prepared by a diverse group of scholars involved in advanced research on public finance. Technical issues, economic consequences and the political economy of budget deficits and government debt are covered in one succinct volume. The work provides a balanced presentation of neo-classical views on measures of government deficits; the budget process and major budgetary legislation in the United States; and the impact of deficits on economic activity, exchange rates, inflation, financial markets, trade balance, and economic growth. It also examines the political economy of government budgets in the OECD, select developing economies, and South Africa. From the 1950s to the 1980s, economic activity and growth were affected by fiscal imbalances and excessive government activity in many countries. Although many actors have made retrenchment attempts, economic research has not resolved the conflicting arguments about the impact of fiscal imbalances on the global economy. This book provides a balanced presentation of all major issues related to the impact of fiscal activity on the economy.

The Political Economy of Fiscal Policy
The Political Economy of Fiscal Policy

Author: Jaejoon Woo

Publisher: Springer Science & Business Media

Published: 2006-02-25

Total Pages: 176

ISBN-13: 3540314172

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One of the most striking macroeconomic developments during the last three decades is the rise and persistence of large fiscal deficits in a number of countries. Despite recent major fiscal reforms around the world, many countries suffer from recurrent large fiscal imbalances that often reflect lack of fiscal discipline. Why do some countries have recurrent fiscal deficit or volatility problems, while others do not? What factors are most important in explaining cross-country variation in fiscal outcomes? How are they related to growth or inflation? This book presents new, rigorous, theoretical and empirical studies on these fiscal issues, and highlights social polarization as an essential organizing principle in a political economy approach. Also, it discusses how institutional constraints may favourably affect fiscal dynamics in the presence of social polarization.