The Political Economy of Budget Deficits
Alberto Alesina and
Roberto Perotti
Additional contact information
Roberto Perotti: International Monetary Fund
IMF Staff Papers, 1995, vol. 42, issue 1, 1-31
Abstract:
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 sooner? We begin by discussing the "tax smoothing" model and conclude that this approach alone cannot provide complete answers to these questions. We then proceed to a discussion of political economy models, which we organize into six groups: (1) models based upon opportunistic policy makers and naive voters with "fiscal illusion"; (2) models of intergenerational redistributions; (3) models of debt as a strategic variable, linking the current government with the next one; (4) models of coalition governments; (5) models of geographically dispersed interests; and (6) models emphasizing the effects of budgetary institutions. We conclude by briefly discussing policy implications.
JEL-codes: H6 (search for similar items in EconPapers)
Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (350)
Downloads: (external link)
http://www.jstor.org/stable/3867338?origin=pubexport main text (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: The Political Economy of Budget Deficits (1994) 
Working Paper: The Political Economy of Budget Deficits (1994) 
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:imfstp:v:42:y:1995:i:1:p:1-31
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2
Access Statistics for this article
More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().