We develop a model of pork-barrel politics in which a government offi cial tries to improve her re-election chances by spending on targeted interest groups. The spending signals that she shares their concerns. We investigate the effect of such pandering on the public deficit. Pandering makes the deficit worse if either the offi cial’s overall spending propensity is known, or if it is unknown bu...

This paper evaluates the relevance of taxation for public spending efficiency in a sample OECD economies period 2003–2017. We start by computing data envelopment analysis (DEA) scores, and then we evaluate role tax structure explaining these using reduced-form panel regression specification. Our main findings are as follows: inputs could be theoretically lower approximately 32–34% expenditure i...

Health spending is expected to resume its rise as a share of gross domestic product (GDP) in the projection period, following 6 years of near stability, increasing from 13.5 percent in 1997 to an estimated 16.2 percent by 2008. This implies an approximate doubling of health spending, from $1.1 trillion in 1997 to $2.2 trillion by 2008. We anticipate a reversal in recent patterns of growth in pu...

The impact of fiscal stimulus depends not only on short-term tax and spending policies, but also on expectations about offsetting measures in the future. This paper analyzes the effects of an increase in government spending under a plausible debt-stabilizing policy that systematically reduces spending below trend over time, in response to rising public liabilities. Accounting for such spending ...

This paper presents a dynamic political economy theory of public spending, taxation, and debt. The theory builds on the well-known tax smoothing approach to fiscal policy pioneered by Robert Barro (1979). This approach predicts that governments will use budget surpluses and deficits as a buffer to prevent tax rates from changing too sharply. Thus, governments will run deficits in times of high ...