Switzerland is a highly decentralised country with large spending and revenue-raising powers devolved to cantons and municipalities. The federal system, in combination with an extensive use of direct democracy, has contributed to keep public spending at a relatively low level in international...

This paper explores the relationship between fiscal deficit, trade deficit and private consumption in European countries in the years 1970-2010. The aim of the study is to test empirically the validity and rationale of the Keynesian proposition (conventional view or Twin Deficits hypothesis) and...

This paper examines various aspects of fiscal policy in Slovenia, in particular fiscal consolidation, pension reform, efficiency of government spending and the tax system. It finds that Slovenia belongs to the group of new EU member countries, which have given in the past a high priority to...

Wagner’s Law is the first model of public spending in the history of public finance. The study tests the validity of Wagner’s Law that there is a long-run tendency for public expenditure to grow relative to national income. This implies that public expenditure can be treated as an endogenous...

This paper looks at interactions between foreign aid and the public sector in developing countries, especially those considered to be fragile or failing states. A model is proposed which employs actual budgetary appropriations and revenue estimates (rather than estimated target variables) and...

This paper analyses how proportionality of the electoral system, political competition and corruption affect the total amount of Italian regional public consumption expenditure and alter the public budget structure. The Italian case is particular: from 1993 the country underwent a change in the...

The paper characterizes the optimal tax scheme in an open economy with structural inefficiencies on the labor market and on government size. On analytical grounds first, we show that the economy can use fiscal revaluation to exploit the terms of trade externality and to dampen the impact of an...

This paper employs the data envelopment analysis (DEA) method to evaluate the performance of public spending and to show how productivity has changed over time for 18 selected OECD countries during 1995 to 2002. Our analysis shows that 14 countries exhibit variable returns to scale, meaning that...

Despite a deep recession in 2009 and weak growth in subsequent years, Hungary’s fiscal position compares favourably with many other OECD countries. Nonetheless, the underlying fiscal balance started deteriorating in 2010 and 2011. Recognising this, Hungary’s government launched an ambitious...

Current proposals to address the European sovereign debt crisis envision some sort of fiscal union to complement the Economic and Monetary Union, backed by stronger sanctions against countries that deviate from budget balance. We argue that sanctions are an indirect approach to balancing...