Many countries, especially developing ones, follow procyclical fiscal policies, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for...

Many countries, especially developing ones, follow procyclical fiscal policies, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for...

Policies are typically chosen by politicians and bureaucrats. This paper investigates the criteria that should lead a society to allocate policy tasks to elected policymakers (politicians) or non elected bureaucrats. Politicians are preferable for tasks that do not involve too much specific...