|Mause I 59f
Government Debt/Political Economy: The usual New Political Economy explanation for excessive government debt leads the interaction of benefit-maximizing, short-sighted voters and benefit-maximizing, opportunistic politicians.
Voters: would demand redistribution and generous state benefits, but would not want to finance them through self-incriminating taxes;
Politicians: would like to increase government spending to increase their chances of re-election and would resort to borrowing as costs and burdens could then be easily disguised. In this way, the sovereign debt crisis is ultimately interpreted as a failure of the democratic system. (1)
Mause I 281f
Government Debt/Political Economy: Studies have shown that referendums can reduce spending levels (Feld and Matsusaka 2001). (2) It also became clear that referenda also reduced the level of new debt (Feld and Kirchgässner 2001). (3)
1. Cf. W.Streeck, The politics of public debt: Neoliberalism, capitalist development and the restructuring of the state. German Economic Review 15 2014 S. 143– 165.
2. Lars P. Feld & John G. Matsusaka. 2001. Budget referendums and government spending: Evidence from Swiss cantons. Journal of Public Economics 87: 2703– 2724.
3. Lars P. Feld & Gebhard Kirchgässner. 2001. Does direct democracy reduce public debt? Evidence from Swiss municipalities. Public Choice 109: 347– 370._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
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