TITLE:
Balanced Budget Provisions in Constitutions and Consensus: The Role of the Coherence of Electoral Law
AUTHORS:
Bruno Chiarini, Sara Lieto
KEYWORDS:
Political Consensus, Constitutionalization, Electoral Law, Fractionalization of Parties, Interest Groups
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.5,
October
31,
2022
ABSTRACT: Since governments are fragmented in their components,
are short-sighted and, therefore, are unwilling to undertake ways of
consolidation that alleviate the burden of
debt on future generations, constitutionalization makes economic sense. The problem, which does not seem to have
been adequately considered, is that if it is true that existing
electoral laws have led to the constitutionalization of the public budget, it
is equally true that this reform of the constitution necessarily entails an
adequate electoral law to avoid perennial political instability and effective
fiscal consolidation. We refer to the recent Italian case and present a simple
model of consensus and political stability that requires a budgetary imbalance.
All this implies that the constitutionaliation of the balanced budget necessarily
requires an appropriate electoral law.