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Democracy, Political Competition and Public Debt

Transylvanian Review of Administrative Sciences

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Title Democracy, Political Competition and Public Debt
 
Creator CROITORU, Lucian; Senior Advisor to the Governor of the National Bank of Romania, Bucharest, Romania
 
Subject political right, political left, reputation, political competition, time preference, markets, social spending, public debt
 
Description There are two major preferences shaping political choices: one, regarding who should play the leading role in running the economy (mar-kets or politicians) and the other, concerning social spending. According to reputation, leftist parties assign the leading role to politicians (i.e. the state), whereas rightist parties entrust mar-kets with the central role in running the econo-my. Right-wing parties’ reputation of not favoring social spending is not backed by facts. Since both the left and the right display similar behav-iors vis-à-vis social spending, it is preferable that markets play the central role in running the econ-omy. Flexible markets help economic growth and employment, reducing the need for high social spending. The freedom of property and freedom from corruption indexes show that, in Romania, the market has never played the central role in running the economy. People’s prevailing con-cern over their wellbeing ‘now’ rather than ‘to-morrow’ generates competition among political right and left for higher social spending, leading to high public debt. Neither left, nor right can guarantee sustainable limits for social benef ts and public debt. Capping the share of public debt in GDP by means of the Constitution provides no guarantee for public debt sustainability, but is worth a try.
 
Publisher Babes Bolyai University
 
Contributor —
 
Date 2015-06-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://rtsa.ro/tras/index.php/tras/article/view/460
 
Source Transylvanian Review of Administrative Sciences; 2015: Issue No. 45 E/June; 26-40
18422845
 
Language eng
 
Relation http://rtsa.ro/tras/index.php/tras/article/view/460/449
 
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