This paper addresses the determinants of public expenditure policies, by reviewing theories and empirical investigations of what features explain the budget process and how the various attributes of actors— including politicians, bureaucrats, interest groups, and donors—and of institutions and political and economic governance environments affect the prioritization of public investments. It dra...

In a simple stochastic overlapping generation model, individuals work when young and retire when old, generations’ productivity is affected by a serially uncorrelated random shock, and fiat money and nominal public debt are the only storable assets. In this setting, we show that social security programs featured by a constant contribution rate and budget-balance in each period, as common in the...

We analyze effects of public debt in a basic endogenous growth model with productive public spending. We demonstrate that a discretionary policy violates the inter-temporal government budget constraint along a balanced growth path. A balanced government budget gives a unique saddle point stable growth path. With a rule based policy, two saddle point stable balanced growth paths can occur, depen...

After the Stability and Growth Pact suspension to face Covid-19 emergency subsequent financial crisis, a novel fiscal discipline must be designed for Euro Area. In this short paper, we formally analyze compare three budget rules their efficacy in pursuing reasonable public debt reduction target, explicitly envisaged by them. The refer are: (a) structural adjustment toward medium term objective,...

In this article, European public finances are analyzed by focusing on the EU budget and the influence of the EU on member states’ taxes and spending. Starting from the economic theory of federalism, the chapter surveys the development of EU revenue, spending and off-budget activities, discusses the redistributive impact of the EU budget on member states, budgetary decision-making procedures and...