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Persistent link: https://www.econbiz.de/10003754165
Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to "starve the Leviathan" to reduce political rents. Voters observe the state of the economy but not the rents appropriated by...
Persistent link: https://www.econbiz.de/10005690486