Research Catalog

Title

Discretionary Fiscal Policy and Elections [electronic resource]: The Experience of the Early Years of EMU / Marco Buti and Paul van den Noord

Author

Buti, Marco.

Publication

Paris : OECD Publishing, 2003.

Details

Additional Authors

van den Noord, Paul.

Description

19 p.; 21 x 29.7cm.

Summary

An early criticism of the Stability and Growth Pact has pointed to its asymmetric nature and the weak mechanisms to prevent politically-motivated fiscal policies: its constraints would bite in downswings but not in upswings, especially if in the latter the electoral cycle increases the temptation to run expansionary policies. We find that the experience of the initial years of EMU lends support to this criticism. Overall, unlike the experience in the run-up to EMU, fiscal policies had an expansionary bias, and a "genuine" discretionary boost took place in correspondence to political elections. Both sign and composition of such discretionary changes are in line with the predictions of the recent literature on electoral budget cycles. Closer fiscal surveillance may help detect early such behaviour, but it is unlikely to curb the incentives to run politically-motivated fiscal policies when elections approach ...

Series Statement

OECD Economics Department Working Papers, 1815-1973 ; no.351

Uniform Title

OECD Economics Department Working Papers, no.351.

Subject

• Economics
• Euro Area

LCCN

10.1787/378575422756

OCLC

oecd-lib-001596

Author

Buti, Marco.

Title

Discretionary Fiscal Policy and Elections [electronic resource]: The Experience of the Early Years of EMU / Marco Buti and Paul van den Noord

Imprint

Paris : OECD Publishing, 2003.

Series

OECD Economics Department Working Papers, 1815-1973 ; no.351

OECD Economics Department Working Papers, 1815-1973 ; no.351.

Connect to:

http://dx.doi.org/10.1787/378575422756

Indexed Term

Economics

Euro Area

Added Author

van den Noord, Paul.

Other Standard Identifier

10.1787/378575422756 doi