Arbeitspapier
Why is fiscal policy often procyclical?
Many countries, especially developing ones, follow procyclical fiscal policies, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for less-than-benevolent government to appropriate rents. Voters have incentives similar to the "starving the Leviathan" classic argument, and demand more public goods or fewer taxes to prevent governments from appropriating rents when the economy is doing well. We test this argument against more traditional explanations based purely on borrowing constraints, with a reasonable amount of success.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 1556
- Classification
-
Wirtschaft
- Subject
-
Finanzpolitik
Konjunktur
Public Choice
Wahlverhalten
Korruption
Theorie
OECD-Staaten
Entwicklungsländer
- Event
-
Geistige Schöpfung
- (who)
-
Alesina, Alberto
Tabellini, Guido
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2005
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Alesina, Alberto
- Tabellini, Guido
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2005
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