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An experimental analysis of voting in the Stability and Growth Pact in the European Monetary Union

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  • Bernd Irlenbusch
  • Matthias Sutter

Abstract

The Stability and Growth Pact (SGP) in the European Monetary Union shall deter countries from running excessive deficits by the threat of punishment, executed conditional on the outcome of a multistage voting procedure. We examine voting behaviour in an experiment which closely resembles the SGP’s design and find that the SGP enables larger countries to block punishment more often than smaller countries. In addition, we study an institutional modification of the SGP by excluding countries with excessive deficits from voting on other ‘fiscal sinners’. Our findings clearly suggest that this innovation would give the SGP sharper teeth than it actually has in reality. Copyright Springer Science+Business Media B.V. 2006

Suggested Citation

  • Bernd Irlenbusch & Matthias Sutter, 2006. "An experimental analysis of voting in the Stability and Growth Pact in the European Monetary Union," Public Choice, Springer, vol. 129(3), pages 417-434, December.
    • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:417-434
    DOI: 10.1007/s11127-006-9064-6
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    Cited by:

    1. Klaus Abbink & Heike Hennig-Schmidt, 2006. "Neutral versus loaded instructions in a bribery experiment," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 103-121, June.
    2. Christoph March & Robert K. Weizsäcker, 2020. "Coordinating intergenerational redistribution and the repayment of public debt: an experimental test of Tabellini (1991)," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(2), pages 301-323, August.
    3. Christoph March & Robert K. von Weizsäcker & Robert K. von Weizsäcker, 2016. "Coordinating Intergenerational Redistribution and the Repayment of Public Debt," CESifo Working Paper Series 6075, CESifo.

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