Austerity is a concept that is often used in the public debate. It refers to fiscal policy measures that reduce government spending and raise taxes for the purposes of closing a government budget deficit. This paper analyzes the concept in the context of the current European economic crisis and...

Since the 1990s at least, UK HM Treasury has been leading a general transformation of public service and the relationship between public and private sectors, driven by a distinctive preference for the private sector. This preference has led to transplant the IFRS to provide a balance sheet...

This paper discusses an alternative route to a balanced budget, namely through debt control. Two models are compared: the debt brake which has been used in Switzerland since 2003 and the debt limitation model proposed by Compact for America. The paper concludes that the former, while apparently...

This article provides a theoretical view on European Public Sector Accounting Standards (EPSAS), focusing on overarching accounting principles and models, as well as their consequences on the working and the very existence of public service activity. Our analysis applies to illustrative cases...

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this creative accounting...

The paper deals with the current budget crisis in Germany, which was triggered by an attempt to increase public debt beyond the limits of the German constitution. The rejection of the Supplementary Budget 2021 of the federal government by the Constitutional Court in November 2023 requires a...

A recent amendment in Pakistan’s federal constitution allows provinces to borrow domestically and abroad. There is a concern that it may generate unsustainable debt burden, considering the country’s delinquent monetary policy and a historical deficit bias. The objective of this paper is to...

Fiscal rules, such as the Excessive Deficit Procedure and the Stability and Growth Pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this depends on the...

We provide a systematic analysis of fiscal consolidation in a medium-scale dynamic general equilibrium model. Our results show that the choice of the consolidation instrument is very important, not only with respect to the short- and long-run output effects of the different consolidation...

Using an unbalanced panel of 27 OECD countries over the period 1970-2011, I examine whether electoral motives influenced creative accounting. Governments engage in "below-the-line" operations, such as transactions in financial assets, that do not show up in the deficit figures but give rise to...