Promised Fiscal Expansions and Politics: A European Union Assessment

Joao Jalles

Comparative Economic Studies, 2021, vol. 63, issue 1, No 3, 84-116

Abstract: Abstract This paper analyzes the political economy causes of fiscal promise gaps, defined as the distance between planned fiscal objectives and actual realizations during planned fiscal expansions periods. Using a sample of 27 European Union countries between 1992 and 2015, we identify, by means of an “hybrid” narrative approach, 68 episodes of promised fiscal expansions. We show that expansionary promise gaps were sizeable (about 1.5–2.5% of GDP during an average fiscal expansion episode) and that initial and economic conditions matter in explaining their size. We also find that the more leftist a government is, the larger the expansionary promise gap. Governments facing weak opposition in the parliament and those more effective are characterized by smaller expansionary promise gaps. Regarding the importance of decentralization and the role played by subnational governments, the larger their capacity to influence national legislation and policy, the larger the promise gaps.

Keywords: Budgetary plan; Budgetary implementation; Elections; Political economy; Regression analysis (search for similar items in EconPapers)
JEL-codes: C30 E02 E62 H11 H62 H63 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1057/s41294-020-00135-y Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:compes:v:63:y:2021:i:1:d:10.1057_s41294-020-00135-y

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-020-00135-y

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().