This paper studies whether budget rigidities affect the probability of countries getting into fiscal distress and reduce the likelihood of governments performing fiscal adjustments. Budget rigidities are constraints that limit the ability of the government to change the size and structure of the...

Current measures of fiscal impoverishment and gains are not consistent with the law of diminishing returns. This paper proposes new measures of fiscal impoverishment and gains that are consistent with the law of diminishing returns, based on a methodology that gives more significance to greater...