Year: 2006
Type: report
Abstract: Why do countries delay stabilizations of large and increasing budget deficits and inflation? And whatexplains the timing of reforms?We use the war of attrition model as a guidance for our empirical study on a vast sample of countries.We find that stabilizations are more likely to occur when time of crisis occur, at the beginning of term of office of a new government, in countries with "strong" governments (i.e.presidential systems and unified governments with a large majority of the party in office), and when the executive faces less constraints.The role of external inducements like IMF programs has at best a weak effect, but problem of reverse causality are possible.
DOI: 10.3386/w12049
Institutions: National Bureau of Economic Research, Harvard University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2162335486