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Marché de droits au déficit et contrainte budgétaire molle

Author

Listed:
  • Marie-Laure Breuillé

    (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - ENESAD - Etablissement National d'Enseignement Supérieur Agronomique de Dijon - INRA - Institut National de la Recherche Agronomique)

Abstract

This article evaluates the efficiency of a market for tradable deficit permits as a mechanism for implementing budgetary austerity at the local level, when the initial allocation of deficit rights can be manipulated. The way déficit rights are allocated in the market turns out to be decisive for the cost-effectiveness of the System. Indeed, the inability of the State to commit dynamically to an initial allocation of deficit rights generates perverse incentives which affect the efficiency of the local market for tradable deficit permits. It is shown that the decentralized behaviour of local jurisdictions does not lead to the least-cost solution attainable under joint-cost minimization, due to the soft budget constraint problem.

Suggested Citation

  • Marie-Laure Breuillé, 2007. "Marché de droits au déficit et contrainte budgétaire molle," Post-Print hal-02817648, HAL.
    • Handle: RePEc:hal:journl:hal-02817648
    as

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