کارایی دولت، نهادها و اثرات تثبیت مالی بر بدهی عمومی

We study the evolution of the ratio of public debt to GDP during 132 fiscal episodes in 21 OECD countries in 1981–2008. Our main focus is on debt dynamics during 40 consolidation periods. To define these periods we use data on the evolution of the underlying cyclically adjusted primary balance, and as such avoid biases that may be induced by one-off budgetary measures. The paper brings new evidence on the role of public sector efficiency for the success of fiscal consolidation. First, we confirm that consolidation programs imply a stronger reduction of the public debt ratio when they rely mainly on spending cuts, except public investment. Government wage bill cuts, however, only contribute to lower public debt ratios when public sector efficiency is low. Second, we find that a given consolidation program will be more effective in bringing down debt when it is adopted by a more efficient government apparatus. Third, more efficient governments adopt consolidation programs of better composition. As to other institutions, consolidation policies are more successful when they are accompanied by product market deregulation, and when they are adopted by left-wing governments. By contrast, simultaneous labor market deregulation may be counterproductive during consolidation periods.

The sharp increase in public debt ratios and growing concern about the sustainability of public finances since the recession in 2008–09 have imposed the need for a significant fiscal adjustment and credible debt reduction strategies in most OECD countries. Many countries have gained experience with fiscal consolidation programs in the past two or three decades. Analysis of the effects of fiscal consolidation has also been high on the agenda of many researchers since seminal works by Giavazzi and Pagano (1990) and Alesina and Perotti (1995). Most of these researchers have tried to explain the probability of success in debt or deficit reduction (e.g. Afonso and Jalles, 2012, Alesina and Ardagna, 1998, Ardagna, 2004, Guichard et al., 2007, Larch and Turrini, 2011, McDermott and Wescott, 1996, Schaltegger and Feld, 2009 and Tagkalakis, 2009). Others focus on the evolution of economic growth, private consumption, or private investment during and after consolidation periods (e.g. Alesina and Ardagna, 2012, Alesina et al., 2002, Ardagna, 2004, Giavazzi and Pagano, 1996, Hjelm, 2002 and IMF, 2010a).

The sharp increase in public debt ratios since 2008 imposes the need for a significant fiscal consolidation and credible debt reduction strategies in almost all OECD countries. Many countries have gained experience with fiscal consolidation programs in the past two or three decades. In this paper we focus on 21 OECD countries in 1981–2008. We define 132 fiscal episodes, including 40 consolidation periods. We contribute to the literature by studying directly the evolution of the ratio of public debt to GDP during, and up to two years after, these fiscal episodes. For the consolidation periods, the data reveal a wide range of outcomes, with the change in the public debt ratio varying between about − 25 and + 35 percentage points. Our aim is to explain these outcomes, and the enormous differences that one can observe. Only one study has focused directly on the evolution of the debt to GDP ratio before (see Heylen and Everaert, 2000).