The politics within institutions for regulating public spending: conditional compliance within multi-year budgets

Bernard Steunenberg

Constitutional Political Economy, 2021, vol. 32, issue 1, No 2, 51 pages

Abstract: Abstract Multi-year budget frameworks are often considered as instruments for controlling spending, including in the context of the European Union. This paper shows that the effects of multi-year budgeting depends on several conditions, some of which, may lead to more rather than less spending. The analysis is based on a model of a finance minister’s decision to enforce a previously accepted budget ceiling in subsequent negotiations with a spending minister. The analysis takes account of uncertainty about preferences in these negotiations, positive transaction costs to the finance minister, and the possibility of political mediation through the prime minister. The findings of this paper show that compliance with budget frameworks improves under temporarily stable preferences (e.g. the absence of external shocks), more homogenous preferences within the government (e.g. majoritarian governments in contrast to coalition government), preference similarity between the finance minister and the prime minister (in case of mediation), and increasing transaction costs. In other circumstances, multi-annual frameworks will not be able to block any upward pressure on expenditures.

Keywords: Public spending; Multi-year budgets; Budgetary politics; Budget control; Political decision-making; Rules; Compliance (search for similar items in EconPapers)
JEL-codes: C72 D73 H61 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10602-020-09323-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:copoec:v:32:y:2021:i:1:d:10.1007_s10602-020-09323-5

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10602/PS2

DOI: 10.1007/s10602-020-09323-5

Access Statistics for this article

Constitutional Political Economy is currently edited by Roger Congleton and Stefan Voigt

More articles in Constitutional Political Economy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().