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As spending on welfare in the United States has increased over time, preferences for more spending have remained fairly stationary. Given that previous research shows that the public adjusts its welfare spending preference thermostatically in response to welfare spending, the over-time pattern of preferences implies that something must be producing an increase in public support, but what? We address this question, focusing on individuals' demographics and a set of aggregate economic variables, both macroeconomic and distributional. Results reveal that individual-level factors matter little to the temporal variation and aggregate economics matter a lot: there are pro-cyclical and counter-cyclical elements in spending preferences and a dampening effect of income inequality over time. The combination of these variables accounts for the underlying trend in welfare spending preferences in the US, and the method used to reveal these dynamics can be used to analyze preference evolution in other spending domains and countries.

Although the past decade has shown how populist governments may challenge the EU’s budgetary framework, we still lack an understanding of the circumstances under which populists are more likely to mobilize against EU-level decision-making in this field, and what this mobilization may look like. Combining the literature on populism as an ideology and EU decision-making, the article zooms in on the negotiations regarding the general regime of conditionality in EU budgetary politics and argues that economic and political factors have influenced populist mobilization. A qualitative comparison of the nine cases where populist parties feature in the government highlights that only two countries, Poland and Hungary, have actively opposed the introduction of the so-called rule-of-law conditionality. A closer look indicates that a combination of Euroscepticism, European Parliamentary affiliation, membership in the European Public Prosecutor’s Office, and the political power that populist parties possess at home, along with key macroeconomic indicators, have influenced populists in government to mobilize against the conditionality mechanism. In the second part of the analysis, the article showcases the actions of the Hungarian government, highlighting it as a specific example of populist mobilization. Viktor Orbán’s government has built a populist narrative around the issue, questioned the norm of the decision-making process, exerted a veto to block the agreement temporarily, and later challenged the regulation in court—in short, it engaged in unpolitics.

The literature on domestic debt default is sparse, as are the data. We compile a database on public debt that spans the nineteenth century to 2010. Our findings are as follows. First, domestic debt accounts for almost two-thirds of public debt. Second, the data help to explain the puzzle of why countries default on external debts at seemingly low debt thresholds. Third, domestic debt (which is often larger than the monetary base in the run-up to high inflation) has largely been ignored in the inflation literature. Last, the view that domestic residents are junior to external creditors does not find broad support.

This paper investigates the impact of elections on the level and composition of fiscal instruments using a sample of 19 high-income OECD democracies during the period 1972-1999. We find that elections shift public spending towards current expenditures at the cost of public investment. Although we find no evidence for an electoral cycle for government deficit and overall expenditures, we find a negative effect of elections on revenue attributed to a fall in direct taxation. Our results apply for predetermined electoral periods while endogenous elections seem to increase deficit and leave the composition of fiscal policy unaffected.

Fiscal watchdogs, so-called fiscal councils, have been proposed as a method to counter deficit bias of fiscal policy. The paper analyses theoretically what role fiscal councils could play and surveys empincally the activities of existing councils. Case studies of the Swedish Fiscal Policy Council and the UK Office for Budget Responsibility are done. It is concluded that fiscal councils should be advisory, rather than decision-making, and work as complements, rather than substitutes, to fiscal rules. Although no panacea, fiscal councils could play a useful role by at the same time strengthening fiscal discipline and allowing rules-based fiscal policy to be more flexible. A key issue is their political fragility and how their long-run viability should be secured. Three ways of guaranteeing their independence are suggested: (1) reputation-building; (2) formal national rules; and (3) international monitoring.

This paper attempts, for the first time, to assess the relationships between budget transparency, fiscal situation, and political turnout using a comparative international approach. With this aim, the authors build a comprehensive index of budget transparency encompassing 40 budget features based on international standards for a sample of 41 countries. They find a positive relationship between national government fiscal balance and budget transparency: The more information the budget discloses, the less the politicians can use fiscal deficits to achieve opportunistic goals. The univariate analysis shows a positive relationship between political turnout and transparency. This result gives some evidence of a positive answer to the question raised by James Alt and David Dreyer Lassen: Does transparency affect political outcomes such as turnout? To some extent, that the more transparent the budget reports are, the more incentives people have to vote. With respect to three variables—transparency, government fiscal balance, and electoral turnout—three clusters of countries arise: low transparency–fiscal imbalance, low transparency–small fiscal imbalance and high transparency–fiscal surplus.

Budgetary policy decisions in many Western countries are now overhung by anxiety about the growth of public debt. Substantial budget deficits are being run in these countries and in many of them public debt has recently grown not only in absolute terms but also as a proportion of GNP. A 'structural' deficit exists when a significant part of a budget deficit is not the result of the current recession and can be expected to remain if and when the recession is over unless the country changes its policies.   JEL Codes: H61, H62