The Debt of Nations: Political Sources of Prudence and Profligacy

The fiscal condition of most OECD countries has deteriorated markedly in the last 30 years. But beyond this general weakening, there has been considerable variation in the fiscal performance of these countries. For example, Italy, Belgium, Japan and Ireland accumulated significant amounts of public debt whereas Finland, Norway, the UK and, until recently, Germany, implemented relatively conservative fiscal policies. Moreover, some countries, such as the US, Ireland and New Zealand, tightened fiscal policy in response to a deteriorating fiscal condition. Others, notably Japan and Belgium, have not.