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Fiscal politics in time: pathways to budget consolidation 1980-2000

Dellepiane Avellaneda, Sebastian and Hardiman, Niamh (2010) Fiscal politics in time: pathways to budget consolidation 1980-2000. Working paper. UCD Dublin European Institute.

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Abstract

The comparative study of debt and fiscal consolidation has acquired a new focus in the context of the current fiscal crisis. This leads us to re-evaluate the literature on fiscal consolidation that flourished during the 1980s and 1990s. The conventional approach segments episodes of fiscal change into discrete observations. We argue that this misses the dynamic features of government strategy, especially in the choices made between expenditure-based and revenue-based fiscal consolidation strategies. We propose a focus on pathways rather than episodes of adjustment, to recapture what Pierson terms ‘politics in time’. We draw on classical explanatory tools of comparative political economy, including structures of interest intermediation, the role of ideas in shaping the set of feasible policy choices, and the situation of national economies in the international political economy. We support our argument with qualitative data based on paired comparisons of Ireland and Britain, and Greece and Spain.