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The Political Economy of Public Debt

Author

Listed:
  • Marco Battaglini

    (Department of Economics, Princeton University, Princeton, New Jersey 08544)

Abstract

We survey recent theories of public debt that incorporate political decision making in rich dynamic environments. These theories provide a new framework with which to interpret empirical evidence and to assess institutional reforms that may help control political inefficiencies. We discuss the inefficiencies that lead to overaccumulation of debt and their implications for the long-run distribution of debt.

Suggested Citation

  • Marco Battaglini, 2011. "The Political Economy of Public Debt," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 161-189, September.
    • Handle: RePEc:anr:reveco:v:3:y:2011:p:161-189
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-061109-080320
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    Citations

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    Cited by:

    1. Lizzeri, Alessandro & Bouton, Laurent & Persico, Nicola, 2016. "The Political Economy of Debt and Entitlements," CEPR Discussion Papers 11459, C.E.P.R. Discussion Papers.
    2. Esslinger, Christoph & Boyer, Pierre, 2015. "Public debt and the political economy of reforms," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113107, Verein für Socialpolitik / German Economic Association.
    3. Barseghyan, Levon & Battaglini, Marco, 2016. "Political economy of debt and growth," Journal of Monetary Economics, Elsevier, vol. 82(C), pages 36-51.
    4. Marco Cozzi, 2019. "Has the Canadian Public Debt Been Too High? A Quantitative Assessment," Department Discussion Papers 1901, Department of Economics, University of Victoria.
    5. Ernesto Crivelli & Mr. Sanjeev Gupta & Mr. Carlos Mulas-Granados & Carolina Correa-Caro, 2016. "Fragmented Politics and Public Debt," IMF Working Papers 2016/190, International Monetary Fund.
    6. Henrique S. Basso & James Costain, 2016. "Fiscal Delegation in a Monetary Union with Decentralized Public Spending," CESifo Economic Studies, CESifo Group, vol. 62(2), pages 256-288.
    7. Henrique S. Basso & James Costain, 2017. "Fiscal delegation in a monetary union: instrument assignment and stabilization properties," Working Papers 1710, Banco de España.
    8. Dietrichson, Jens & Ellegård, Lina Maria, 2015. "Assist or desist? Conditional bailouts and fiscal discipline in local governments," European Journal of Political Economy, Elsevier, vol. 38(C), pages 153-168.
    9. Stasavage, David, 2016. "What we can learn from the early history of sovereign debt," Explorations in Economic History, Elsevier, vol. 59(C), pages 1-16.
    10. Andersen, Torben M., 2019. "Intergenerational conflict and public sector size and structure: A rationale for debt limits?," European Journal of Political Economy, Elsevier, vol. 57(C), pages 70-88.
    11. Mutascu, Mihai & Danuletiu, Dan, 2013. "The literacy impact on tax revenues," Economics Discussion Papers 2013-63, Kiel Institute for the World Economy (IfW Kiel).
    12. Esslinger, Christoph & Mueller, Cornelius, 2014. "State Capacity and Public Debt: A political economy analysis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100311, Verein für Socialpolitik / German Economic Association.
    13. Miller, David S., 2016. "Commitment versus discretion in a political economy model of fiscal and monetary policy interaction," Journal of Monetary Economics, Elsevier, vol. 84(C), pages 17-29.

    More about this item

    Keywords

    fiscal policy; constitutional design; legislative bargaining; electoral rules; balanced budget rule;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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