 Engineering crises: Favoritism and strategic fiscal indisciplineGilles Saint‐Paul, Davide Ticchi () and Andrea Vindigni Economics and Politics, 2021, vol. 33, issue 3, 583-610 Abstract: We develop a political economy theory of the endogenous emergence of fiscal crises based on the idea that the adjustment mechanism to a crisis favors some social groups, that may be induced ex‐ante to vote for fiscal policies that are more likely to lead to a crisis. Greater levels of favoritism lead to a higher public debt and more frequent crises, as well as to higher public expenditure, if the favored group is large enough. We provide conditions under which the favored group strategically favors a weaker state's fiscal capacity and when constitutional limits on debt raise the utility of all poor. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:ecopol:v:33:y:2021:i:3:p:583-610 Ordering information: This journal article can be ordered from Access Statistics for this article Economics and Politics is currently edited by Peter Rosendorff More articles in Economics and Politics from Wiley Blackwell |
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