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Understanding Public Debt from a Political Economy Perspective

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  • Nouha Bougharriou

    (Faculty of Economics and Management of Sfax, Tunisia)

Abstract

This paper surveys the recent political economy literature on fiscal policy with a focus on public debt. We provide theoretical discussions on the political and institutional factors shaping fiscal policy. The literature suggests that the opportunistic and ideological behavior of politicians, the conflicts of interest among political parties, and the distribution of debt burden across governments and generations may all lead to excessive public debt. However, many studies emphasize the role of budgetary institutions in promoting fiscal discipline. More specifically, adopting fiscal rules, improving fiscal transparency, centralizing the budget process, and creating an independent fiscal authority are considered as institutional solutions to address excessive deficits and debts.

Suggested Citation

  • Nouha Bougharriou, 2017. "Understanding Public Debt from a Political Economy Perspective," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 379-389, September.
    • Handle: RePEc:nwe:eajour:y:2017:i:3:p:379-389
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    References listed on IDEAS

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    More about this item

    Keywords

    political economy; fiscal policy; Public debt;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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