TY  - BOOK
AU  - Boyer, Pierre C.
AU  -  Esslinger, Christoph
AU  -  Roberson, Brian
TI  - Public Debt and the Political Economy of Reforms
SN  - 1945-7669
PB  - American Economic Journal: Microeconomics
KW  -  Macroeconomics
KW  -  Political Processes
KW  -  Sovereign Debt
KW  - Public Goods
N2  - How do electoral incentives influence the choice to experiment with a policy reform that generates uncertain future benefits? To answer this question, we examine a two-period model of redistributive politics with uncertain policy outcomes involving a mixture of private and public benefits. In equilibrium, we find that the intertemporal trade-off between current policy costs and future benefits creates an incentive for politicians to use public debt to smooth spending across periods. The higher the share of policy benefits that are in the form of a public good, the higher the level of available debt-related spending on targeted policies that is necessary
UR  - https://www.aeaweb.org/articles?id=10.1257/mic.20220238
ER  -