Starving the Beast? Intra-Generational Conflict and Balanced Budget Rules

Dirk Niepelt

No 05.04, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: A balanced budget requirement does not only prevent fiscal policy makers from smoothing tax distortions but also affects their preferred choice of government spending. The paper analyzes the conditions under which groups opposed to government spending might want to implement a balanced budget requirement in order to induce the government to spend less. It shows that relaxing a balanced budget requirement need not be associated with higher government spending.

Pages: 17 pages
Date: 2005-10
New Economics Papers: this item is included in nep-acc, nep-dge and nep-pbe
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Journal Article: Starving the beast? Intra-generational conflict and balanced budget rules (2007)
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