6533b86efe1ef96bd12cc373
RESEARCH PRODUCT
Government size, the role of commitments
G AlbaneseSalvatore Modicasubject
H4H5H1Settore SECS-P/02 Politica EconomicaSettore SECS-P/01 - Economia Politicadescription
We explore the hypothesis that long-term commitments affect the dynamics of government expenditure. With the aid of a simple median-voter model we interpret the pattern of increasing-then-constant tax rates observed in OECD countries in the second half of the last century: persistence of public expenditure and a lower bound on new interventions will push government size upward, and preferences of the electorate put a halt to this growth at some point. In this view, the fiscal policy variable is seen to consist of only a part of the total expenditure, the rest being predetermined by its past level.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2012-01-01 |