Human Development and Fiscal Policy: Comparing the Crises of 1982-85 and 2008-11
The paper juxtaposes the fiscal policies – and in particular the changes in social expenditures – adopted during the debt crisis of 1982-1985 and the financial crisis of 2008-2011. The paper shows that – contrary to the early 1980s - the governments’ responses in 2008-2009 were characterized by the adoption of Keynesian fiscal stimulus packages in which an increase in social spending represented one of the main components. Nonetheless, in 2010-11 fear of debt default and continuous pressures coming from the financial markets pushed many policy makers to introduce austerity packages and cut public social expenditure, offsetting in this way part the prior policy decisions, as already observed in the early 1980s. Econometric evidence included in the paper shows that the factors explaining the difference in policy approaches between the early 1980s and 2008-2009 include greater country autonomy compared with the past, the spread of democracy and the greater attention paid to human development by policy-makers designing fiscal adjustments.
|Date of creation:||2012|
|Date of revision:|
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- Cornia, Giovanni Andrea & Martorano, Bruno, 2011.
"A New Fiscal Pact, Tax Policy Changes and Income Inequality,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Giovanni Andrea Cornia & Juan Carlos Gómez-Sabaini & Bruno Martorano, 2012. "A New Fiscal Pact, Tax Policy Changes and Income Inequality," Working Papers - Economics wp2012_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2010.
"From Financial Crash to Debt Crisis,"
NBER Working Papers
15795, National Bureau of Economic Research, Inc.
- Frances Stewart, 2012. "The Impact of Global Economic Crises on the Poor: Comparing the 1980s and 2000s," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(1), pages 83-105, February.
- Giovanni Andrea Cornia & Bruno Martorano, 2012.
"Development Policies and Income Inequality in Selected Developing Regions, 1980–2010,"
UNCTAD Discussion Papers
210, United Nations Conference on Trade and Development.
- Giovanni Andrea Cornia & Bruno Martorano, 2013. "Development policies and income inequality in selected developing regions, 1980-2010," Working Papers - Economics wp2013_13.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
- Easterly, William, 1999.
"When is fiscal adjustment an illusion?,"
Policy Research Working Paper Series
2109, The World Bank.
- Eduardo Lora & Mauricio Olivera, 2006.
"Public Debt and Social Expenditure: Friends or Foes?,"
Research Department Publications
4465, Inter-American Development Bank, Research Department.
- Lora, Eduardo & Olivera, Mauricio, 2007. "Public debt and social expenditure: Friends or foes?," Emerging Markets Review, Elsevier, vol. 8(4), pages 299-310, December.
- Eduardo Lora & Mauricio Olivera, 2006. "Public Debt and Social Expenditure: Friends or Foes?," IDB Publications (Working Papers) 43578, Inter-American Development Bank.
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