Virements are useful instruments of budget flexibility. If carried out transparently and within accepted limits, virements can promote expenditure efficiency. Large, unregulated virements can undermine budget credibility and the budget's relevance as principal policy and financial planning...

The need for state, to provide services that people publicly demand, requires sharing resources between private sector and government. Since resources are assumed to be scarce in economies, states cannot generously act and share those resources. This is the constraint that governments must take...

We use a controlled laboratory experiment with and without overlapping generations to study the emergence of public debt. Public debt is chosen by popular vote, pays for public goods, and is repaid with general taxes. With a single generation, public debt is accumulated prudently, never leading...