The conventional wisdom is that politicians' rent seeking motives increase public debt and deficit. This is because myopic politicians face political risk and prefer to extract political rents as early as possible. An implication of this argument is that governments will under-save during a...

"Starve the Beast" is a theory held by many Republicans, which holds that tax cuts automatically bring about spending cuts and thus prevent an increase in the budget deficit. This paper explains how this theory came to be developed and its political and economic consequences

The indicator that is commonly used to assess the long-term fiscal sustainability of public finances in EU member states ("S2") is also defined if government borrowing rates are assumed to be permanently lower than the growth rate of GDP. Under these circumstances, however, it no longer provides...

Sustainability gaps ( S2 indicators) are frequently used in national and international reports to assess the sustainability of public finances. For instance, in the European Commission's Debt Sustainability Monitor (DSM) the indicators are analyzed in comparisons across (policy) scenarios,...

Public discussion of federal fiscal policy typically focuses on several familiar metrics of performance, including the total deficit, the level of public debt and percentage of federal spending committed to mandatory spending and net interest payments. While useful, these measures are based on...

This paper examines the characteristics and determinants of the deviations between the initial and final figures of the Spanish public budget from 1985 to 2006. Our goal is to evaluate the extent to which initial budgeted figures adhered ex-post to actual fiscal figures, by trying to unveil...

This paper examines the question of whether the U.S. State Department’s budget should be cut, and if so, by how much. If its budget increased by the same percentage as the increase in GDP since 2000, it would be 43.3 percent smaller than it was in 2016

For decades, a central element of the Republican Party brand has been to call for fiscal responsibility through balanced budgets. We ask if the Republican Party has ever lived up to these ideological principles. Medicare Part D and paying for the recent Afghanistan and Iraq wars are striking...

We investigate the use of financial information in the determination of budget cuts under unprecedented fiscal pressure caused by COVID-19. Especially, we concentrate on financial information such as budget execution rates, the ratio of a project’s cumulative annual executed budget (i.e.,...