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Title: Is fiscal fatigue a threat to consolidation programmes?
Authors: Agnello, Luca
Castro, Vitor
Sousa, Ricardo M.
Keywords: Fiscal consolidation
Duration analysis
Weibull model
Duration dependence
Change points
Issue Date: 2015
Publisher: © SAGE
Citation: AGNELLO, L., CASTRO, V. and SOUSA, R.M., 2015. Is fiscal fatigue a threat to consolidation programmes? Environment and Planning C: Government and Policy, 33 (4), pp. 765-779.
Abstract: Building on a narrative approach to identify episodes of fiscal consolidation, data for a group of seventeen industrial countries over the period 1978–2009, and continuous-time duration models, we find evidence suggesting that the likelihood of a fiscal consolidation ending increases over time, but only for programmes that last fewer than six years. Additionally, fiscal consolidations tend to last longer in non-European than in European countries. Our results emphasize that chronic fiscal imbalances might lead to a vicious austerity cycle, while discipline in the behaviour of fiscal authorities is a means of achieving credible and shorter adjustment measures. Therefore, fiscal fatigue is likely to compromise the implementation and successfulness of fiscal consolidation programmes.
Description: This paper was accepted for publication in the journal Environment and Planning C: Government and Policy and the definitive published version is available at http://dx.doi.org/10.1177/0263774X15597391
Sponsor: Castro and Sousa acknowledge that this work has been financed by Operational Programme for Competitiveness Factors - COMPETE and by National Funds through the FCT - Portuguese Foundation for Science and Technology within the remit of the project “FCOMP-01-0124-FEDER-037268 (PEst-C/EGE/UI3182/2013)”.
Version: Accepted for publication
DOI: 10.1177/0263774X15597391
URI: https://dspace.lboro.ac.uk/2134/25014
Publisher Link: http://dx.doi.org/10.1177/0263774X15597391
ISSN: 0263-774X
Appears in Collections:Published Articles (Economics)

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