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Fiscal policy in the face of long-term expenditure uncertainties

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  • Peter Heller
  • David Hauner

Abstract

A number of uncertainties about long-term expenditure commitments in industrial countries are examined: (i) the assumptions underlying the projections, (ii) the potential to further reduce non-age-related expenditures, (iii) the implicitly assumed absence of “shocks,” and (iv) the potential for raising revenue. This paper concludes that (i) there is scope, but within narrow limits, to reduce non-age-related expenditures; (ii) fiscal policy frameworks tend to understate risks; and (iii) prevailing tax rates leave little room for increasing taxation in the countries facing the strongest aging pressures. In sum, governments will have to adopt a much more ambitious fiscal policy stance to cope with aging populations. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Peter Heller & David Hauner, 2006. "Fiscal policy in the face of long-term expenditure uncertainties," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(4), pages 325-350, August.
    • Handle: RePEc:kap:itaxpf:v:13:y:2006:i:4:p:325-350
    DOI: 10.1007/s10797-006-8798-x
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    References listed on IDEAS

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    1. Tanzi,Vito & Schuknecht,Ludger, 2000. "Public Spending in the 20th Century," Cambridge Books, Cambridge University Press, number 9780521662918, September.
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    Cited by:

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    3. Mr. David Hauner & Ms. Annette J Kyobe, 2008. "Determinants of Government Efficiency," IMF Working Papers 2008/228, International Monetary Fund.
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    5. Hatra Voghouei & Mohammad Ali Jamali, 2018. "Determinants of government efficiency: does information technology play a role?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 285-298, September.

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