Democracy
Catenarian fiscal discipline
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: January 4, 2014
Abstract:
Democratic governments tend to accumulate excessive debt. This column proposes a new rule – the ‘Catenarian Fiscal Discipline’ – which allows a fiscally disciplined incumbent to limit the debt-making of the next officeholder. This way, fiscal discipline today can lead to fiscal discipline in the future. Such a rule would require that we broaden our notion of representative democracy by recognising the fact that a current government already has various implicit ways of limiting what its elected successors can do.
Raising the bar for incumbents
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: January 3, 2012
Abstract:
Incumbent politicians have a host of advantages in US elections; members of the US Congress are typically re-elected about 90% of the time. This column argues that such a head start can often be bad for the country, with leaders focusing on short-term populist policies rather than the greater good. It suggests raising the bar for incumbent candidates.
“Triple-knot” fiscal safety for the Eurozone
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: September 8, 2011
Abstract:
Many economists are calling for new rules in European governance to put a stop to the Eurozone crisis, with some going so far as to suggest steps towards political union. This column outlines an institutional framework – a proposal the author calls “Reciprocal Parliamentary Approval” – that may help to restore the fiscal stability many see as vital to the survival of Europe’s single currency without states surrendering their sovereignty.
Vote-share bonds
Author: Hans Gersbach
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Date posted: November 14, 2010
Abstract:
How can excessive public debt be avoided? This column proposes a novel solution: “vote-share bonds”. These government bonds are tied to the share of the vote that the adoption of the underlying deficit has received in parliament. A bond with a higher vote-share is considered senior. Vote-share bonds inspire fiscal responsibility, while retaining the flexibility to stabilise negative macroeconomic shocks.
Government Debt-Threshold Contracts
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: September 7, 2010
Abstract:
The Eurozone crisis and debate over fiscal stimulus have emphasized the importance of responsible government debt management. CEPR DP 8001 develops a political economy model in which politicians prop up their reelection chances with debt-financed public projects but postpone the delivery of the projects until the next term. The author proposes to remedy this by instituting debt-threshold contracts which, if violated, would disqualify politicians from standing for reelection. He suggests that such contracts do not impede the stabilization of negative macroeconomic shocks.
Voting twice: A new approach to the limitation of government debt accumulation
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: June 17, 2009
Abstract:
How might we limit the accumulation of public debt by democratic governments? This column proposes “voting twice" – first for a deficit ceiling and second for a particular budget. Such a procedure might strike a balance between flexibility and the commitment to refrain from loading debt onto future generations.
Vote-Share Contracts and Democracy
Author: Hans Gersbach
external pageVoxEU articlecall_made
Date posted: September 26, 2007
Abstract:
Incumbents enjoy an electoral advantage that they have been known to exploit to the detriment of society. Recent theoretical research into “political contracts” suggests ways of mitigating the incumbency problem.
Incentive Contracts for Politicians and Binding Election Promises: Reform Ideas for Democracy
Author: Hans Gersbach
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Date posted: June 11, 2007
Abstract:
Although they would yield social benefit, many political projects are not implemented in democracy. The ongoing debate on reforms around the world provides prominent examples: The reform of the European labor market or the reduction plans for greenhouse gases are cases in point. We suggest a number of improvements which would make liberal democracy more efficient without altering its founding values.