Can Budget Institutions Counteract Political Indiscipline?

By Stefania Fabrizio, A. Mody. Social Science Research Network, 2006

202 citations recorded by the source corpus.

type="main" xml:lang="en"> The budget is an expression of political rather than economic priorities. We confirm this proposition for a group of new and potential members of the European Union, finding that politics dominates. The contemporary practice of democracy can increase budget deficits through not only ideological preferences, but also more fragmented government coalitions and higher voter participation. Long-term structural forces, triggered by societal divisions and representative electoral rules, have more ambiguous implications but also appear to increase budget pressures, as others have also found. However, our most robust, and hopeful, finding is that budget institutions – mechanisms and rules of the budget process – that create checks and balances have significant value in curbing fiscal pressures even when the politics is representative but undisciplined, and when long-term structural forces are unfavourable. — Stefania Fabrizio and Ashoka Mody

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/bbf515ddba257945538e04291ab857ad723c9b47

Citations in the corpus

• Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation (2008, unknown): “Mueller and Stratmann (2003) find no systematic evidence of democratic participation on growth in a large sample of democratic countries, while Fabrizio and Mody (2006) estimate a negative effect on budget balance in a sample of central and eastern European countries.”