Alt, James2; Lassen, David Dreyer4; Wehner, Joachim3
1 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet2 Department of Government, Harvard University3 Department of Government, London School of Economics and Political Science4 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet
Domestic politics, transparency and fiscal gimmickry in Europe
This article analyzes the political origins of differences in adherence to the fiscal framework of the European Union (EU). It shows how incentives to use fiscal policy for electoral purposes and limited budget transparency at the national level, combined with the need to respond to fiscal rules at the supranational level, interact to systematically undermine the Economic and Monetary Union through the employment of fiscal gimmicks or creative accounting. It also explains in detail how national accounts were manipulated to produce electoral cycles that were under the radar of the EU budget surveillance system, and concludes with new perspectives on the changes to (and challenges for) euro area fiscal rules.
British Journal of Political Science, 2014, Vol 44, Issue 4, p. 707-716