English, Article, Journal or magazine article edition: Politicians and soft budget constraints Dalen, Dag Morten; Moen, Espen R.; Riis, Christian

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Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Politicians and soft budget constraints
Author
  • Dalen, Dag Morten
  • Moen, Espen R.
  • Riis, Christian
Physical Description
  • preprint
Notes
  • We study soft budget constraints from the perspective of political economics. A partly partisan government confronts a budget crisis in a politically important sector, e.g. like the health care sector. To what extent the government wants to make additional grants to the sector depends on economic conditions and on the preferences of the government, both unknown to the electorate. Thus, the government’s budget response gives a signal of its preferences, and may thereby influence the probability that the government is re-elected. As a result, the handeling of a budget crisis becomes inefficient even from an ex post point of view, in the sense that it does not react adequately to changing economic conditions.
  • Political economics; budget constraints; budget crisis
  • RePEc:hhs:oslohe:2001_002
Language
  • English
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