Fiscal restraint and the political economy of EMU
While the principle of delegation has become well established on the national level for monetary policy, fiscal policies remain in the hands of policy makers depending on rent-seeking interest groups. We argue that the Maastricht Treaty provides a unique international commitment that enables governments to follow restrictive fiscal policies by attributing their negative side-effects to Europe, and to implement austerity measures despite rising unemployment or a decline in growth. Hence, the popularity of the European idea is instrumented to enforce fiscal discipline. The paper outlines the political economy framework and presents new econometric evidence. Copyright Kluwer Academic Publishers 1998
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Frey, Bruno S. & Eichenberger, Reiner, 1994.
"The political economy of stabilization programmes in developing countries,"
European Journal of Political Economy,
Elsevier, vol. 10(1), pages 169-190, May.
- Bruno S Frey & Reiner Eichenberger, 1992. "The Political Economy of Stabilization Programmes in Developing Countries," OECD Development Centre Working Papers 59, OECD Publishing.
- Eichengreen, Barry & Bayoumi, Tamim, 1994.
"The political economy of fiscal restrictions: Implications for Europe from the United States,"
European Economic Review,
Elsevier, vol. 38(3-4), pages 783-791, April.
- Barry Eichengreen and Tamim Bayoumi., 1993. "The Political Economy of Fiscal Restrictions: Implications for Europe from the United States," Center for International and Development Economics Research (CIDER) Working Papers C93-020, University of California at Berkeley.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Alesina, A. & Drazen, A., 1991.
"Why Are Stabilizations Delayed?,"
6-91, Tel Aviv - the Sackler Institute of Economic Studies.
- Alesina, Alberto & Tabellini, Guido, 1990.
"A Positive Theory of Fiscal Deficits and Government Debt,"
Review of Economic Studies,
Wiley Blackwell, vol. 57(3), pages 403-14, July.
- Tabellini, Guido & Alesina, Alberto, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Scholarly Articles 3612769, Harvard University Department of Economics.
- Veall, Michael R & Zimmermann, Klaus F, 1996. " Pseudo-R-[superscript 2] Measures for Some Common Limited Dependent Variable Models," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 241-59, September.
- Alan J. Auerbach, 1994.
"The U.S. Fiscal Problem: Where We Are, How We Got Here and Where We're Going,"
NBER Working Papers
4709, National Bureau of Economic Research, Inc.
- Alan J. Auerbach, 1994. "The U.S. Fiscal Problem: Where We are, How We Got Here, and Where We're Going," NBER Chapters, in: NBER Macroeconomics Annual 1994, Volume 9, pages 141-186 National Bureau of Economic Research, Inc.
- Tollison, Robert D, 1982. "Rent Seeking: A Survey," Kyklos, Wiley Blackwell, vol. 35(4), pages 575-602.
- Crafts, Nicholas & Toniolo, Gianni, 1995. "Post-war Growth: An Overview," CEPR Discussion Papers 1095, C.E.P.R. Discussion Papers.
- Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
- Eichenberg, Richard C. & Dalton, Russell J., 1993. "Europeans and the European Community: the dynamics of public support for European integration," International Organization, Cambridge University Press, vol. 47(04), pages 507-534, September.
- Vaubel, Roland, 1994. "The public choice analysis of European integration: A survey," European Journal of Political Economy, Elsevier, vol. 10(1), pages 227-249, May.
- Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
- Olson, Mancur, Jr, 1995. "The Devolution of the Nordic and Teutonic Economies," American Economic Review, American Economic Association, vol. 85(2), pages 22-27, May.
- Mancur Olson, 1984. "Microeconomic incentives and macroeconomic decline," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 120(4), pages 631-645, December.
- Vaubel Roland, 1992.
"The Political Economy Of Centralization And The European Community,"
Journal des Economistes et des Etudes Humaines,
De Gruyter, vol. 3(1), pages 38, March.
- Vaubel, Roland, 1994. " The Political Economy of Centralization and the European Community," Public Choice, Springer, vol. 81(1-2), pages 151-90, October.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:94:y:1998:i:3:p:385-406. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.