. IFCs' role is to mitigate this imperfection. Equilibrium public debt is excessive because policymakers are "partisan" and … IFC as the debt bias would fall. However, when other considerations eclipse competence and give the incumbent a strong … electoral advantage or disadvantage, setting up an IFC may be counterproductive as the debt bias would increase. If the …

its successor. This leads to a bias for excessive debt, especially if the probability of being removed from office is … optimal second-best restriction on public debt exceeds the level of public debt that would prevail under the socially optimal …) investment in ideological projects, the current government perceives a large benefit of a debt reduction. However, debt and …

pensions, population ageing, government budget deficit and debt, European Union Stability and Growth Pact. …