Title: Why has the Stability and Growth Pact Failed?
Abstract: Abstract This paper evaluates the Stability and Growth Pact. After briefly examining the rules in place and the experience so far, the Pact is analysed from a political economy perspective, focusing on the choice of hard versus soft law and drawing inferences from characteristics of successful fiscal rules at the state level in the USA. The main argument of the paper is that the Pact's enforcement mechanisms are too weak. It is also argued that big countries are less likely to adhere to the fiscal policy rules in place. Reform of the Pact should aim at stricter, instead of more flexible, rules and should not rely on cyclically adjusted deficit estimates.
Publication Year: 2004
Publication Date: 2004-07-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 83
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot