Understanding Public Debt from a Political Economy Perspective

Nouha Bougharriou ()
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Nouha Bougharriou: Faculty of Economics and Management of Sfax, Tunisia

Economic Alternatives, 2017, issue 3, 379-389

Abstract: This paper surveys the recent political economy literature on fiscal policy with a focus on public debt. We provide theoretical discussions on the political and institutional factors shaping fiscal policy. The literature suggests that the opportunistic and ideological behavior of politicians, the conflicts of interest among political parties, and the distribution of debt burden across governments and generations may all lead to excessive public debt. However, many studies emphasize the role of budgetary institutions in promoting fiscal discipline. More specifically, adopting fiscal rules, improving fiscal transparency, centralizing the budget process, and creating an independent fiscal authority are considered as institutional solutions to address excessive deficits and debts.

Keywords: political economy; fiscal policy; Public debt (search for similar items in EconPapers)
JEL-codes: D72 E62 H61 P16 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:nwe:eajour:y:2017:i:3:p:379-389

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