Political Economy of Fiscal Institutions

Arbeitspapier

We discuss two essential problems of the political economy of public finances: The principal agent problem between voters and elected politicians and the common pool problem arising from the fact that money drawn from a general tax fund is used to pay for policies targeting more or less narrow groups in society. Three institutional mechanisms exist to deal with these problems, ex-ante rules controlling the behavior of elected policy makers, electoral rules creating accountability of and competition among policy makers, and budgeting processes internalizing the common pool externality. We review recent theoretical and empirical research and discuss its implications for research and institutional design.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 149

Classification and Topics

• Classification: Wirtschaft ; Structure, Scope, and Performance of Government ; National Budget; Budget Systems ; National Deficit; Surplus
• Subject: electoral systems ; fiscal rules ; budgeting processes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): von Hagen, Jürgen
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2005

Further information

• DOI: doi:10.5282/ubm/epub.13402
• Handle: http://hdl.handle.net/10419/93875
• URN: urn:nbn:de:bvb:19-epub-13402-2
• Last update: 10.03.2025, 11:42 AM CET